Chancellor optimistic over future
He also told a conference of business leaders in Edinburgh that the forthcoming Budget would focus on growth.
The UK officially emerged from recession last month with growth of 0.1 per cent and Mr Darling said he was confident this trend would continue.
Advertisement
Hide AdAdvertisement
Hide Ad"If you look at the immediate problems we face, then public spending in our country and most other countries has stopped this recession from being being much deeper than it would otherwise be, and maybe even turning into a depression," he said.
Despite confidence returning, Mr Darling said there had yet to be any "significant increase" in private sector investment.
"I think we will start to see stronger growth. We'll see 1-1.5 (per cent) this year and we'll see growth picking up again next year."
The role of Government would be "critical" in helping recovery.
Advertisement
Hide AdAdvertisement
Hide Ad"While the private sector slowly recovers, it is only Government that can do what needs to be done now: supporting the economy, helping business, keeping people in work and in their homes," Mr Darling said.
"We are now out of recession but there are still risks ahead of us, as the economy gradually recovers."