MercoPress. South Atlantic News Agency

Central bankers forecast world economy could be at “pick up” point

EU Central Bank head Jean-Claude Trichet

The global economy may soon see signs of improvement, according to the heads of the world's major central banks. European Central Bank head Jean-Claude Trichet said that the world economy could be approaching a “pick-up” point.

Mr Trichet noted positives such as lower oil prices and government stimulus packages, though he noted the world economy would still slow in 2009.

He was chairing a meeting of the Bank of International Settlements, which groups the world's central banks.

“We are identifying a number of elements in the global economy that are expansionary undoubtedly,” Mr Trichet said. He also heads a group composed of central banks from the Group of 10 industrialised nations.

“We have a number of elements that are suggesting that we are approaching the moment where you would have a pick-up,” Mr Trichet said.

He said most institutions were predicting growth this year in industrialised countries to decline, with flat global growth, before a rebound in 2010. “I would not say that the central bankers would depart from this,” Mr Trichet added.

The world economy will shrink for the first time this year since World War II, the World Bank has said, with trade possibly recording the biggest decline in 80 years.

Central banks, including the ECB, the Bank of England and the US Federal Reserve, have cut rates to historic lows and governments are enacting major spending packages in a bid to revive the ailing global economy.

Last week, the ECB cut Euro-zone rates to 1.5% from 2%.