More signs of improvement in economies but IMF sees sluggish recovery

China's economy slowed in the first quarter. AFP/CNA reports:

China announced its slowest economic growth in at least a decade on Thursday, with the worldwide downturn cooling expansion to just 6.1 per cent in the first quarter of the year.

But economists are counting on government stimulus for recovery.

Urban fixed asset investments rose 28.6 per cent in the first quarter, while in March alone the increase was 30.3 per cent year-on-year, the bureau said.

The figure is a measure of government spending on infrastructure, which got a huge boost in November with a four-trillion-yuan (US$580-billion) package aimed at warding off the effects of the global economic crisis.

"It looks like we've already started to gain some forward momentum," said Stephen Green, a China economist with Standard Chartered.

Meanwhile, in the US, there were more signs on Thursday that the economy is stabilising. Bloomberg reports:

Initial jobless claims decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January, the Labor Department said today in Washington. Builders broke ground on 358,000 single-family homes at an annual rate, unchanged from the prior month...

The Fed Bank of Philadelphia’s general economic index increased to minus 24.4 this month from minus 35 in March as orders dropped at a slower pace, the bank said...

But gloomy numbers are still coming out of Europe. From Bloomberg:

Industrial production...in the euro region fell 18.4 percent from the year- earlier month, the biggest drop since the data series began in 1986, after a revised 16 percent decline in January, the European Union’s statistics office in Luxembourg said today. Economists expected production to fall 18 percent in February, according to the median of 16 estimates in a Bloomberg survey. Inflation slowed in March to 0.6 percent, a record low, the office said in a separate report.

Furthermore, the IMF is not optimistic about the prospects for recovery. Bloomberg reports:

The global economy is in the grip of a “severe” recession with “worrisome parallels” to the Great Depression and a recovery will probably be weak, according to a report by the International Monetary Fund.

“The downturn is likely to be unusually severe, and the recovery is expected to be sluggish,” the Washington-based lender said in a portion of its World Economic Outlook released today in a briefing. “The current downturn is highly synchronized and associated with a deep financial crisis, a rare combination in the postwar period.”