TRICHET SAYS CENTRAL BANKS HAVE UNITY OF PURPOSE ON INFLATION

Brussels, March 9- European Central Bank President Jean-Claude Trichet, speaking on behalf of the world’s major central bankers, comments on inflation threats, economic growth and global imbalances.

He made the remarks after chairing the Global Economy Meeting at the Bank for International Settlements in Basel, Switzerland, today.

On inflation:

“There is, amongst central bankers, solid unity of purpose -this is not new- to continue to solidly anchor inflation expectations and this is an element, which is considered by all of us that this is important”.

“There is a unity of purpose. And this is crystallizing in solidly anchoring inflation expectations”.

“What is clear is that it is in the emerging economies you see strong signs of inflationary threat, that is absolutely clear”.

“In the advanced economies we are all looking at avoiding second-round effects and anchoring inflation expectations”.

“We will continue to solidly anchor inflation expectations. That doesn’t mean we take the same decisions”.

“We see clearly that there are inflation threats that are particularly visible in the emerging countries. There you really have an issue of inflationary threats. Colleagues are all very keen to anchor inflation expectation, which for all central banks is of the essence”.

“We will consolidate confidence of the economic agents, of households and all those taking decisions”.

On oil prices:

“We concentrated on the prices themselves and the evolution of prices. It was the angle of supply and demand. We are in an environment where we have a spike in the price of oil, commodities and food. That’s something that’s not new but under the present circumstances more acute. But we didn’t address directly the issue of geopolitical phenomena that are unfolding”.

“The additional tensions that have been observed particularly in the prices of oil and energy are adding importance to the message we had in January. That’s true for the global economy as a whole”.

On global growth:

“In the view of the Global Economy Meeting, growth is confirmed. The recovery is confirmed at a relatively robust pace. Growth remains largely driven by emerging countries’ growth, which is dynamic, and by the confirmation of recovery at the level of advanced economies. Emerging Asia is especially dynamic. It is clear that at the level of the global economy that we see this feature, but uncertainty remains”.

On fiscal policy:

“We consider it important that fiscal policies remain sound”.

On reducing global imbalances:

“We all consider that in the medium- to long-term perspective, it is very important that we have a rebalancing of macroeconomic imbalances”.

“Of course, it’s work in progress. We consider that the efforts of the various economies should continue”.

“We should not lose momentum and continue to work very, very actively in the medium term to reduce these imbalances in line with global diagnosis”.

“It is very important not to lose momentum. It is one of the preconditions for sustainable growth and job creation at the global level”.

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