A drop in Japanese bank lending as capital markets recover, a slower pace of decline in the OECD economic outlook and a White House forecast of 600,000 jobs created or saved in coming months offered further signs on Monday that recession was easing in several nations.
Concerns about recovery still remain, with World Bank President Robert Zoellick saying on Monday in Montreal that it is not clear where demand will come from to fuel global recovery. But he also said he saw no need to build additional stimulus into the global economy one more sign the economy is stabilising after the worst crisis in six decades.
The slowing of growth in Japanese bank lending to a seven-month low of 3.1 percent in May signalled that firms were finding it easier to obtain funds via the capital markets, which froze when the global financial crisis hit.
And a survey by the Paris-based Organisation for Economic Co-operation and Development, a grouping of 30 developed nations, said its economic outlook declined at a slower pace in April and there were stronger indications that the downturn may have hit bottom in Canada, France, Italy and Britain.
"While it is still too early to assess whether it is a temporary or a more durable turning point, OECD composite leading indicators (CLIs) for April 2009 point to a reduced pace of deterioration in most of the OECD economies," the OECD said.
In Japan, Germany and the United States, positive signals were also emerging, the OECD said, although the leading indicators still pointed to a slowdown.
Canadian Finance Minister Jim Flaherty said on Monday that positive signs in financial markets are giving cautious optimism that a global economic recovery may not be far behind.
Friday's U.S. May jobs data, showing the fewest job losses since September, helped lift Japanese shares to an eight-month closing high. European shares fell as investors focused on whether recent gains were too far, too fast while U.S. stocks were little changed.
McDonald's Corp. warned on Monday that second quarter profit may be hurt by currency swings while May sales at restaurants open at least a year were lighter-than-expected.
But President Barack Obama's announcement on Monday that 10 major projects funded by a huge stimulus package that Congress passed in February will be expedited and help save or create jobs over the next 100 days did help mute negative sentiment.
"We will not grow complacent or rest. Surely and steadily, we will turn this economy around," Obama said.
But a U.S. Supreme Court justice on Monday granted a request to put on hold the sale of bankrupt automaker Chrysler LLC to a group led by Italian carmaker Fiat SpA, putting Chrysler's survival, and the jobs of its employees, at risk.
JAPAN RISING?
In other positive economic news from around the world, the rate of Japanese corporate bankruptcies fell year-on-year in May for the first time in 12 months and service sector sentiment rose to a one-year high.
China's growth slowed to 6.1 percent in the first quarter of 2009, the lowest on record, but the government is optimistic about hitting its 8 percent growth target for the year.
In Britain, one of the worst-hit developed nations due to its long housing and credit booms and reliance on the financial services sector, 11 out of 20 economists surveyed by the Financial Times thought the economy had stopped contracting in June and would start growing in coming months.
European Union finance ministers believe their bank support schemes have helped stabilise the sector but more recapitalisation or balance sheet clean-ups may be necessary.
But there there is also no room for fiscal stimulus in the European Union and governments should now shift to budget consolidation as the economy recovers, finance ministers are due to tell EU leaders in 10 days.
Separately, European Central Bank Governing Council member Axel Weber said the ECB can and will exit quickly from policies providing extra liquidity when the economy rebounds.
In the British banking sector, Lloyds Banking Group said on Monday it had raised just under 3.5 billion pounds ($5.56 billion) from shareholders which it will use to pay back some of the money injected by the British government last year.
In the United States, the U.S. Federal Reserve is expected to say Goldman Sachs Group Inc, JPMorgan Chase & Co and perhaps a few other banks will be allowed to repay money to the Troubled Asset Relief Program, The Wall Street Journal said on Monday, without saying where it got the information.
But there was also bad news. Standard and Poor's cut Ireland's sovereign credit rating again on Monday and said it could fall further. Ireland is now rated at "AA" with a negative outlook.
Britain and Austria could be the European countries whose sovereign credit ratings are most likely to be cut next.
Tue Jun 9, 2009 8:54am IST
No comments:
Post a Comment