Reply #36: Trichet Says Recession Probably Over, Economy May Grow in 2010 [View All]

Sept. 3 (Bloomberg) -- European Central Bank President Jean-Claude Trichet said the euro region’s recession has probably ended and boosted its economic forecasts for this year and next.

“There are signs the contraction of economic activity has come to an end and is followed by period of stabilization and very gradual recovery,” he told reporters in Frankfurt after the ECB kept the benchmark rate at a record low of 1 percent. The bank now expects the economy to expand around 0.2 percent in 2010 after forecasting a contraction of 0.3 percent in June.

The revised forecasts are the latest to paint a better picture of the economy, with the Organization for Economic Co- operation and Development earlier today forecasting a “modest” global recovery. Trichet is nevertheless wary of nipping the euro-region recovery in the bud by tightening policy too soon as rising unemployment and the expiry of government rescue packages may damp expansion next year.

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