The US economy will recover by the end of 2002, but not without a prior, tumultuous period for equities, a prominent Irish investment manager has said.

According to Mr Eugene Kiernan, head of asset allocation with Irish Life Investment Managers, "the next six months will be a tough time to be an owner of equities", as the market goes through another two quarters of upheaval. At a risk conference in Galway yesterday, Mr Kiernan said revived fiscal spending in the US, when coupled with low energy prices, would lead to a "better economic picture" by the end of next year, possibly with growth of around 1 per cent. "At some stage, you get the benefit of lower interest rates and oil prices," he said.