World economy lurches toward recovery
- Source: Global Times
- [00:52 September 03 2009]
- Comments
The world economy got a big boost in the right direction yesterday, even as fears lingered on financial markets.
Australia announced a surprising jump in growth in the second quarter, US manufacturing expanded, European economies continued their gradual emergence from the crisis and company results showed an upturn.
The worst of the financial crisis is "over for the time being," Jean-Claude Juncker, head of the Eurogroup of finance ministers, told reporters as he arrived for a meeting in Brussels.
"The global economy is not out of the woods yet by a long stretch," Australian Prime Minister Kevin Rudd said, despite data showing his country's economy grew 0.6 percent in the second quarter – the best result among developed countries.
In the United States, President Barack Obama said Tuesday that the growth in US manufacturing in August for the first time in 19 months was "a sign that we are on the path to economic recovery."
The Institute of Supply Management said its index of the factory sector, also known as the purchasing managers index, jumped to 52.9 percent in August, up from 48.9 percent in July. Any number above 50 indicates growth.
Analysts at Dutch bank ING said in a research note to clients, however, that US "economic activity remains exceedingly weak."
"The good news is that the recovery in the US manufacturing and housing sectors appears to be gathering pace. The bad news is that it is still not creating any extra jobs," said Paul Dales from Capital Economics in London.
Stock markets have also shrugged off the upbeat economic data, tumbling around the world this week as traders rush to cash in on quick profits.
London's benchmark FTSE 100 index was down 0.36 percent in mid-day trading.
"Compared with last month's optimism, investors seem afraid of fear itself, more than anything else," said Daniel Roy, an equities analyst at Newedge brokers. "Among market players, it is generally accepted that a correction is due on equity markets" after strong recent gains.
The trend "reflects the nervousness of investors about the sustainability of a global economic recovery," Barclays Capital analysts wrote to clients.
AFP
