ECB warns of delayed world economic recovery
ECB warns of delayed world economic recovery
The Jakarta Post, Jakarta
The European Central Bank (ECB) expressed concern that a turn
around in the world economy would take longer than many may have
expected due to various uncertainties.
Many international economists have predicted that the global
economy -- which has slowed down in the last two years --- would
start to bounce back in the second half of the year.
However, while calling the prediction a solid analysis,
visiting ECB's executive board member Tommaso Padoa-Schioppa told
The Jakarta Post recently he was concerned the recovery would be
delayed again.
"It's true that the expectation of a pick up was already there
a year ago and did not occur. So, we are all concerned that the
recovery, a pick up, may be delayed as it has been delayed so
far," Tommaso said in an interview.
After the terrorist bomb attacks on the U.S. World Trade
Center almost two years ago, which shattered economic confidence
worldwide, many had forecasted the world economy would rebound in
the second half of 2002 on the back of a recovery in the U.S. and
Japanese economies.
But it turned out to be just wishful thinking as the global
economy has had to weather the storm of new uncertainties,
resulting from a number of tragic events across the globe.
The deadly terrorist attacks on Indonesia's resort island of
Bali, the Iraq war and the outbreak of SARS, to mention a few,
all proved to have further derailed the world's economic
recovery.
Tommaso said that, based on those challenges the world
currently faces -- in what he called extra uncertainties after
Sept. 11 -- the expectation of a pick up "is more subject to a
negative than a positive risk."
"And finally it's also true that the exceptionally high growth
rates of the 90s are unlikely to be repeated in the near future.
"But I think that the economic analysis that underlies the
projection of a pick up is a solid analysis and should not be
discarded too readily. I do hope it proves to be true," he added.