Mr Alan Greenspan former chairman of US Federal Reserve last week said chairman said that there is more than a 50% chance the US could go into recession although it has yet not entered recessionary state despite marked by sharp falls in orders, strong rises in unemployment and intensive weakening of the economy.

He said that "We would have to see signs of this intensification. There are some, but not many yet. Therefore I would not describe the situation we are in as a recession, although the chances that we will have one are more than 50%."

He added that "This period is going to be much more difficult, from the point of view of monetary policy, than the period during which I was chairman of the Federal Reserve.”

A sharp downturn in the US housing market has led to a full-blown credit crisis that has reverberated throughout the US financial system.