MADRID: The U.S. economy looks set to pick up next year or early in 2010, although this scenario is by no means certain, the IMF Managing Director Dominique Strauss-Kahn said in a newspaper interview on Thursday.

"There is a reasonable probability of the U.S. economy starting to recover at the end of 2009 or the start of 2010," he told a Spanish newspaper.

He based this view on the likelihood that the housing market has touched a low point and as demand reacts to fiscal stimuli but added: "We recognize, however that the possibility of a recovery is plagued with uncertainty."

If the U.S. housing market continued to fall then deflation could not be ruled out, the former French finance minister said.

"We are faced with an abrupt fall in activity and we should use all instruments available with the aim of simultaneously tackling three aims, the first restoring the stability and confidence of national financial markets."

He reiterated that the IMF would cut its current 2.2 percent forecast for global growth next month and again criticized governments for not providing sufficient economic stimulus to lift consumer confidence.

The European Union's plan to spend the equivalent of 1.5 percent of the union's GDP was too timid, he said.

The IMF recommends global governments spend a combined 2 percent of global gross domestic product or $1.2 trillion to reduce the risk of a damaging global recession.