World economic crisis

Signs of recovery in Asia and US economies - but not Europe

Article published on the 2009-03-26 Latest update 2009-03-26 15:37 TU

Taiwan's central bank left interest rates on hold at a record low of 1.25 percent on Thursday, its first pause after seven straight cuts
(Photo: Reuters)

Financial markets in Asia climbed on Thursday, following fledgling signs of recovery in the US economy. Stockmarkets rose by a fraction after US housing, car and aviation industries showed signs of growth for the first time in months. But figures published later in the day show the US economy has shrunk by 6.3 per cent in the fourth quarter with almost 650,000 jobs lost in February.

The small increase in Asian investor confidence has not been reflected in Europe.

Although the slight upturn in America suggests the worst may be over, the slowdown continues to cause distress in economies across the European continent.

According to the European Central Bank, growth in the eurozone money supply dropped in February and so did loans to the private sector.

Poor figures from Germany have helped to kill hopes of a swift recovery. Europe's biggest economy has been hit by falling exports and output and consumer confidence is dropping, according to a survey by the GfK institute.

Meanwhile, retail in the UK has fallen to its lowest point in 13 years. The fear of rising unemployment and a deepening recession is repelling shoppers.

Swedish budget clothing giant H+M reported increased sales but a slide in total net profits, blaming the krona's devaluation.

High hopes are pinned on next week’s London G20 summit, where leaders of the world's richest countries will come together and discuss ways out of the global financial mess.

But the US and Europe are in different frames of mind. The US is in favour of increased spending, whereas European leaders want to tighten financial controls.