Beijing, Sep 01: The prospects for recovery in the global economy have improved due to the high economic growth rates in Asian countries like China, signs of a rebound in the United States and better performances of European and Japanese economies, International Monetary Fund chief Horst Kohler said here today. The prospects for recovery in the global economy have improved as there are increasing signs of an economic rebound in the US, expectations of a pick-up in Europe have improved, and a tentative recovery also seems to be taking hold in Japan, Kohler said.

Addressing a luncheon hosted by the People's Bank of China, the country's central bank, Kohler said Asia remains a bright spot in the world economy, citing its Gross Domestic Product (GDP) growth of over six per cent in 2002.

Kohler called for advanced countries to tackle their deep-seated structural problems as part of the cooperative efforts to ensure a gradual and orderly correction of large global current account imbalances.

He said that greater exchange rate flexibility in Asia should also be part of a gradual process of reducing global current account imbalances.
Commenting on China's economy, he noted that China's strong growth, averaging about nine per cent per year over the last decade, and expanding trade have significant potential benefits for both the global and regional economies.

Bureau Report