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Saturday, Jan. 1, 2011

'World economy to maintain growth'

Kyodo News

The world economy is likely to maintain moderate growth in 2011 even though industrial countries remain plagued by various problems, Japanese Bankers Association Chairman Masayuki Oku said in a recent interview.

"Overall, growth will remain moderate," said Oku, also president of Sumitomo Mitsui Banking Corp.

"The United States is unlikely to achieve a full-fledged economic recovery before the second half of 2011 as housing prices have yet to turn upward, while employment problems still weigh on the economy," he said. "Europe, meanwhile, still faces financial concerns."

But Asian emerging countries and Brazil are expected to make significant contributions to world economic growth on the strength of massive infrastructure development projects, he said.

Japan's growth may slow in 2011 after a fairly good pace in 2010 on the back of policy measures, including subsidies for environmentally friendly cars, that ended in September, Oku said.

While indicating concern over the yen's appreciation against the dollar, Oku said he sees no strong factors to push the yen down or up in the short term. The dollar may remain in the ¥80 to ¥85 range in the first half of 2011, he said.

Oku said Japanese banks will focus on faster-growing regions in Asia as demand for funds remains weak domestically.

"We're willing to assist Japanese companies going out of slower-growing Japan to emerging countries," he said.

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