Chinese Premier
Wen Jiabao “’ admits
to increasing downward
economic pressure
New York, USA — 08 June 2012 – Monetary policy-makers from around the world are being pressed into action to shore up a global economy that is suffering its steepest slowdown since the recession ended in 2009 “’ a trend that has been underlined by the world’s leading mining companies cutting back on expansion programmes and new projects.

Bloomberg News reports that on the heels of a June 5 interest-rate cut by Australia, China has unveiled its first reduction in borrowing costs in more than three years to counter what Premier Wen Jiabao has called increasing downward economic pressure.

European Central Bank (ECB) president Mario Draghi left the door to a rate cut open at a June 6 press conference while highlighting the limitations of the ECB’s tools in countering the region’s financial turmoil.

And US Federal Reserve chairman Ben S. Bernanke told a congressional committee this week that policy makers will discuss later this month whether to do more to spur growth, although he said the steps they could take may have diminishing returns.

“Across the board, we’re seeing the central banks being galvanised into action by weak growth around the world,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts.

The global economy will grow 1.7% this quarter and 2% next, after expanding at an annual pace of 2.5% in the final quarter of 2011, economists at JPMorgan Chase & Co. in New York said in a June 1 report. The result is “an extended soft patch as weak as anything experienced in the past two decades outside the Great Recession,” they wrote.

Source: Bloomberg News. For more information, click here.