MercoPress. South Atlantic News Agency

G 10: “Global recovery is confirmed”

Chairmen of the ten main Central Banks of the world, also known as G 10, said this Monday that the world economy continues to recover in the third quarter of 2004, including the emerging markets, in spite of the surge in oil prices.

"At global level I can say that we are confident that the global recovery is confirmed", but "a progressive orientation towards lower oil prices" is needed stressed Jean Claude Trichet president of the European Union Central Bank and spokesperson for the G-10 which is holding a meeting in the Bank for International Settlements, BIS, with seat in Basel, Switzerland.

The central banks of Canada, United Kingdom, France, Italy, Japan, Germany, United States, Belgium, Holland, Sweden and Switzerland make up the G 10. Mr. Trichet pointed out that current oil prices have not had the impact of the 1970's and 1980's oil crisis.

Among those reasons Mr. Trichet indicated the fact that hydrocarbons dependency for energy production has dropped dramatically, almost 50%, and the current price surge has been caused by a greater demand and not supply cuts as in previous occasions.

"Crude represents a very small share of total energy consumption globally", underlined Mr. Trichet who recommended a quick return to "oil market fundamentals".

However Mr. Trichet cautioned about inflation saying that "most indicators suggest some strengthening in the third quarter, confidence in maintaining price stability and vigilance remains of the essence".

Regarding emerging markets "prospects have continued to improve confirming a strong recovery" said Mr. Trichet who avoided mentioning specific countries. He only admitted that G-10 did address the US dollar-yuan fixed link which the President George Bush blames for the huge US trade deficit.