Read these words then come back read again same time next year!

TREASURY boss Martin Parkinson said ratings agencies were trying to overcompensate for past mistakes.

''They are becoming mechanistic and excessively simplistic, running the risk of moving from excessive optimism to excessive pessimism every time they look at a country or firm. If you've got a small checklist of indicators and you bang through it, you never really understand the circumstances.''

China was succeeding in slowing its economy without a hard landing. ''I am not worried about it,'' Dr Parkinson said. ''The more we can get them to start to use proper instruments of monetary policy rather than direct lending controls, the better we will all be.''

Europe would almost certainly enter recession next year. The only question was about how deep it would be and how long it would last.

''Our assessment is that if everything goes well, the recession could be shallow and over soon,'' he said. ''If it doesn't, it could be protracted indeed.''

Greece in particular was in a vicious circle. Every time it reassessed its economic situation, it revised down growth and wound back its budget, pushing down economic growth further. Its economy was now expected to sink 8 per cent over two years and the budget would need to shrink almost 25 per cent over three years.

Fortunes in the US appear to have turned, but the failure of the congressional committee to find budget savings has triggered automatic spending cuts that are likely to cut US GDP by up to 0.75 percentage points in 2013, ''a potentially significant shock to what was still likely to be only a still modest recovery''.