[DEBATE] : Global economic growth 'robust', says ECB

[Riaz K Tayob]

Global economic growth 'robust', says ECB Basel, Switzerland

07 January 2008 03:20

Global economic growth is "robust" but inflation risks remain as markets 
absorb the impact of the United States subprime crisis and higher food 
prices, European Central Bank (ECB) chief Jean-Claude Trichet said on 
Monday.

"Food is a very big problem" stoking inflationary pressures, along with 
higher energy costs, stock-market corrections and the risks of 
protectionist trade policies, Trichet said in his role as spokesperson 
for the G10 group of central bankers meeting in Switzerland.

He also said that "we have to look very carefully at the business model 
of banks" in the wake of the billions of dollars in losses incurred by 
some of the world's leading financial institutions due to their exposure 
to the high-risk US mortgage sector.

Despite the downside risks, "at the global level we see confirmation 
that growth is continuing at a pace that is quite robust", he said.

The ECB head added that coordinated actions by central banks such as his 
own, the US Federal Reserve, the Swiss National Bank and the Bank of 
Japan to inject much-needed liquidity into the financial markets had 
been "efficient".

He stressed that the booming economies of developing nations such as 
China and India have proved thus far resilient in the face of the 
subprime crisis.

"The emerging world is not touched," he said.

"Emerging markets have very impressive dynamics. There is no evidence 
that there is significant influence from the market correction, which 
has been observed in the industrial world," Trichet said. -- AFP

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