US credit crisis getting better: Merrill Lynch CEO

MUMBAI, May 7 (Reuters) - The U.S. credit crisis is getting better and the risk in its housing market is dramatically lower than it was, but economic growth will remain under pressure over the next year, the chief executive of Merrill Lynch & Co Inc said on Wednesday.

"I believe the combination of falling home prices, rising food and energy prices and higher unemployment will result in a pull back on the economy in the next six to 12 months," John Thain said while on a visit to India to see the U.S. investment bank's operations in Asia's third-largest economy.

Merrill Lynch posted a $2 billion first-quarter loss last month, its third consecutive quarterly loss, amid losses in subprime mortgages, collateralised debt obligations and other risky investments.

Merrill Lynch has recorded more than $30 billion of write-downs since the third quarter, and Thain has said they were planning for slower, more difficult next few quarters, but that he was optimistic about fiscal year 2008. (Reporting by Rina Chandran; Editing by John Mair)

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