Bankers upbeat over global economy

Leading central bankers have concluded that global economic growth prospects remain "encouraging" but stress that the real estate market should be kept under watch.

    Trichet chaired the top central bank governors' meeting

    Jean-Claude Trichet, the European Central Bank chief, said on Monday that the upbeat forecast that the bankers had made in January still held.

    "We have the same sentiment on global growth," said Trichet, who chaired a meeting of the G10 group of top central bank governors in Basel, Switzerland.

    "Global growth is there and it is encouraging."

    Two months ago, at its last bi-monthly review meeting on the world economy, the G10 had said that global growth was "dynamic".

    It said that growth was likely to be slightly higher in 2006 than the 4% target that the group had set out in 2005, and that the globe had weathered a sharp rise in oil prices to record levels last year.

    Substantial growth

    "We had a little meditation on real estate and the feeling is that we need close monitoring. There is no reason to be alarmed"

    Jean-Claude Trichet, 
    European Central Bank chief

    Trichet said on Monday that the world's financial markets had "well absorbed" interest rate increases in the European Union, Japan and the United States.

    Rate increases do "not risk slowing growth, on the contrary they are paving the way for substantial growth", he said.

    However, Trichet noted that overheating real estate markets could become a concern.

    "We had a little meditation on real estate and the feeling is that we need close monitoring. There is no reason to be alarmed," he said.

    "The situation is different from country to country," he said, concluding that "monetary policy nevertheless plays its part".

    SOURCE: AFP


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