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Economic Worries Persist Despite Positive Reports


There are more indications the worst of the global recession may be over, but key economic officials from around the world are still worried.

The latest upbeat assessment comes from the Paris-based Organization for Economic Cooperation and Development (OECD), which said Thursday an economic recovery could come sooner and be stronger than first thought.

The OECD analyzes economic data for 30 of the world's leading industrialized countries and says economic growth for the top industrialized nations - the United States, Britain, Canada, France, Germany, Italy and Japan, also known as the Group of Seven - will contract just 3.7 percent this year - less than the 4.1-percent drop it forecast in June.

Still, OECD officials warn rising unemployment and weak housing markets are still a threat, while top officials in Europe and the United States are also urging caution.

European Central Bank (ECB) President Jean-Claude Trichet said Thursday the bank's benchmark interest rate would remain at a record-low one percent, warning an economic recovery will be gradual and uneven.

Low interest rates make it easier for companies and consumers to get the loans they need to pay employees and buy goods.

Meanwhile, Britain's Treasury chief, Alistair Darling, tells The Independent that governments around the world must continue spending money on economic stimulus packages.

Darling says the biggest risk to an economic recovery "is that people think the job is done." He warns ending stimulus programs now could plunge the global economy back into a deep recession.

On Wednesday, U.S. Treasury Secretary Timothy Geithner said the global economy has been pulled back from the edge of an "abyss" but that "we still have a long way to go."

Two new economic reports from Europe seem to support the idea of an uneven recovery.

The European Union Thursday said retail sales in the 16 countries that use the euro fell in July as consumers cut back on purchases of food, drinks and tobacco.

A separate index (Markit's Purchasing Managers' Index) found improved performance in the euro zone's manufacturing and service sectors in August.


Some information for this report was provided by AFP, AP and Reuters.

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