BASEL, May 9: Top central bankers left unchanged on Monday their forecast for modest growth in the global economy, citing the dampening effect of high oil prices. “There is no reason to change the perspective,” said Jean-Claude Trichet, who chairs the G10 group of central bankers, after they met in the Swiss city of Basel.
“There are indicators and figures that are going in both directions and that is particularly true in the US,” Trichet told journalists. “But all taken into account the global perspective has not changed.”
At current rates, economic growth this year will reach about four per cent, said Trichet, who also heads the European Central Bank. That matches the G10 forecast given at the past two of its meetings, in January and March.
“Growth this year is lower than in 2004 and the price of oil played a role in this,” Trichet said.
“All things being equal, a price of oil of over $50 has had a depressing effect on the global economy,” he added.
If oil prices decline, this would have a favourable impact on global growth, he said. He welcomed indications from Saudi Arabia that it is ready to increase oil output.
Trichet said that global inflation was still well under control despite the oil price rise. “As regards inflationary expectations, our understanding of what is observed at a global level again is that they are pretty well anchored,” he said.
The G10 groups 11 central banks from Britain, Canada, France, Germany, Italy, Japan, the United States, as well as Belgium, the Netherlands, Sweden and Switzerland. Its members gather regularly at the Swiss-based Bank for International Settlements, which is known as the “central bankers’ central bank.”—AFP
