‘No sign’ of world recession

Press, 10 February 1988, Page 39

‘No sign’ of world recession

NZPA-Reuter Basle Central bankers from leading industrial countries say they see no sign that October’s sharemarket crash will trigger a world recession, despite recent falls in American economic indicators.

“No country has noted it is suffering any deterioration since the crash,” one governor told journalists after a meeting with fellow central bankers from the Group of 10 countries at the Bank for International Settlements in Basle. Like others attending the regular monthly gathering, the governor spoke on condition that he was not identified.

Fears that falling stock prices could drag the “real economy” down with them had intensified after the recent report that the US index of leading economic indicators had fallen for the third month in a row. i

"It is not easy to interpret the index due to the high level of inventories,” one central banker said. “There is not necessarily a case of production exceeding consumption. The figures may be showing some accumulation of imports.”

. Central bankers described the meeting as routine, a sharp contrast to initial “postcrash” meetings at the Swiss headquarters of the BIS, which acts as a central bank for the world’s leading central banks.