The global economy is slowing down, but relief might be in sight soon, says European Central Bank President Jean-Claude Trichet.
"We're approaching a moment where we might have a pickup," said Trichet in a meeting of the Bank for International Settlements in Basel, Switzerland, reported in The Wall Street Journal.
The rebound in the corporate bond markets, although just a modest one, is a good signal of a turnaround in the near term, he said.
The humongous packages to stimulate the economy, lower energy prices, and interest rates should boost growth, Trichet said.
Trichet said investors may not fully comprehend the magnitude of the investments being made by governments worldwide.
Efforts by policy makers to prevent the collapse of major institutions, for instance, could be overlooked by investors, who have pushed U.S. stocks to 12-year lows.
This "may not be fully priced in by the market,” he said.
China’s efforts to spark a rebound could be working. People's Bank of China Vice Governor Yi Gang said the country’s fiscal-stimulus measures are “fine.”
"At this point, I think the current package of the fiscal stimulus is sound, and it seems already effective," Yi told reporters in Switzerland.
However, Dominique Strauss-Kahn, the head of the International Monetary Fund, warned on French television that the world economy is headed for “a Great Recession.”
Strauss-Kahn said economic data has not gotten better since January.
The IMF had predicted global growth in gross domestic product of 0.5 percent in 2009 in January.
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