Duisenberg sees recovery

February 25, 2002 Posted: 1306 GMT

LONDON (CNN) -- European Central Bank President Wim Duisenberg said on Monday he expected a "mild" recovery of the global economy this year.

The global economy has proved to be resilient after the September 11 terror attacks, Deuisenberg said. The ECB, which sets monetary policy for the 12-nation euro zone, has said before that the economy is set for a rebound this year.

Last week, the National Association for Business Economics said economists it polled in February think the first recession in the U.S., the world's biggest economy, is already over.

"A mild recovery (in the global economy) is generally expected to start in the course of 2002 and to accelerate in 2003," Duisenberg said in a speech given at the central bank of China in Beijing.

"While I am reasonably optimistic about the sustainability of the recovery that, we expect, will start this year, I am also aware of the remaining downside risks."

Duisenberg said the euro zone economy should hit its 2 to 2.5 percent trend growth level, and inflation would drop safely below 2 percent during this year and then remain there.

"At the end of the year, economic growth should reach a level close to potential growth," Duisenberg said. He added the ECB's frequently repeated warning that the timing and strength of the upturn remained uncertain.

Duisenberg mentioned some risks to the sustainability of the global upturn such as protracted current account deficits, and household and corporate indebtedness. In some industries there was overinvestment and some countries had a fragile financial sector, he said.

--Reuters contributed to this report