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Thursday, 19 March 2009

'Moderate recovery' in 2010

PARIS - ECB head Jean-Claude Trichet joined the chief of the US central bank on Wednesday in forecasting that the global economic crisis would give way to recovery next year.

Mr Trichet saw 'moderate' recovery in 2010.

Ben Bernanke, the head of the US Federal Reserve said in a television interview on Sunday that he could already see the 'green shoots' of recovery in 2010. Signs are also emerging that the German economy might be in sight of an end to the crisis.

Mr Trichet said in an interview that there was 'a fairly general consensus ... that 2010 could be the year of a moderate recovery for growth' in the world economy as long as governments, companies and consumers regain confidence.

'I insist that what's important now is to regain confidence,' Mr Trichet said on France's Europe 1 radio, adding that the year ahead would be 'very difficult' and that the current economic situation was 'very uncertain.'

In separate remarks to the Fondation Robert Schuman, Mr Trichet also said that 'the eurozone is extremely solid.' And he was confident in the ability of eurozone countries to carry out their responsibilities in the single currency area 'including in the area of budgets,' a reference to concern that big public deficits in some countries are rising even further as a result of government spending to fight the crisis.

Mr Trichet, in his radio remarks, said that following a cut in eurozone interest rates to a record low point earlier this month, 'the economy is expected to gradually recover' next year.

Mr Bernanke had said in his interview with CBS television on Sunday that 'green shoots' of economic revival were already visible and that confidence was returning to the markets.

There are also tentative signs of improvement in recession-hit Germany too, where a rise in investor confidence reported on Tuesday offered hope that the outlook for Europe's biggest economy and the world's largest exporter is brightening.

'The bottom of the recession is likely to be reached this summer,' Wolfgang Franz, head of the ZEW institute compiling the confidence index, said on Tuesday.

'The economic situation is extremely bad but there are the first signs of hope. They should not be played down,' Mr Franz said. -- AFP

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