--George: G10 sees slower, but more sustainable global growth
--G10's George says Fed easing was a welcome, timely action
--G10's George: Euro-zone growth slowdown moderate, short-lived
--G10 George: No evident pressure on euro-zone earnings, wages
--G10 George: Global equity market exaggerations now eased
--George says G10 expects US growth at 2-3% in 2001
By BridgeNews
Basle, Switzerland--Jan. 8--The Chairman of the Group of Ten central banks, Eddie George, said Monday that while the U.S. economy could experience a "bumpy" ride in the first half of 2001, it was likely to achieve a soft landing from previous high levels of expansion. George--also Bank of England Governor-- said the G10 expected U.S. growth to ease from 2000 and reach 2-3% for the whole of the current year. * * * Speaking to reporters after Monday's regular meeting of G10 central bank governors, George said: "The best bet is that it will be a soft landing (for the U.S. economy)." George said that "nobody around the (G10) table was projecting recession in the U.S. or global economies. All in all, there could be short-term bumpiness, but if we look beyond the first half of this year, the situation is for sustained, moderate growth. "Talk of a slump, or a recession, is in no way justified," he added. George welcomed the recent decision of the Fed to cut its key interest rates, saying it was a "timely and aggressive move," and added it was an entirely appropriate response, and should help avert a U.S. hard landing. George said the Fed easing reduced inflationary pressures and allowed more room for policy maneuver, concluding it was possible to sustain U.S. and euro- zone growth with low inflation. "There is an economic slowdown, but it is a slowdown to a more sustainable rate, and therefore a rather positive thing," George said. Recent U.S. growth has been so strong, that people have become used to that, and now we are experiencing something slower, he said. Nevertheless U.S Fed officials emphasized today that improvement in productivity is expected to continue, and that the slowdown had taken some of the exaggeration out of equity markets, particularly in the "dotcom" sector. George said the G10 governors recognized the dangers of going from one extreme to "explore the other." As far as the euro zone is concerned, George said the G10 saw positive prospects, with "a moderate and short-lived" slowdown, and with growth expected to reach around 3% in 2001. George added there were no evident euro-zone pressures on earnings or wages, and there is evidence of emerging consumer confidence, helped by lower oil prices and the recent euro recovery. George said Japan's report to today's meeting was less encouraging, but there was a perception that the gradual recovery, driven by business spending, is likely to be maintained. George said there was no suggestion of Japanese growth slowing to zero, and that the 1.5-2% growth in 2000 was likely to continue this year. The Asian export slowdown to the U.S. was generally welcomed as an indicator that the U.S. economy was slowing to a sustainable rate, and was not causing any anxiety as long as the U.S. landing was soft as expected.