MANILA – China’s central bank surprised the economy by slashing interest rates on Friday in order to re-energize their economy prompting analysts to include them in the list of major economies that are growing despite global slowdown.
The head of the European Central Bank noted that he was ready to prompt motivation for the 18-country eurozone economy wherein growth is currently on the low and unemployment is on the rise. The same move made by Japan’s government last week paved the way for increased in purchase of government bonds and other assets.
China’s latest act and ECB’s hints of further stimulus allowed a surge in stock markets, especially in Europe. DAX of Germany increased by 2.6 percent, while Dow Jones rose 0.5 percent. There are also Asian stocks that moved after China’s announcements. Likewise, the United States of America has showed steady growth.
According to Jay Bryson, a global economist at Wells Fargo Securities, the US is “relatively insulated” from overseas improvements.
Recently, the slowdown in global growth has become the primary concern of many policymakers. Japan confirmed this week that it is currently going through recession and is planning to delay tax increase to motivate consumers to spend.
“We will do what we must to raise inflation and inflation expectations as fast as possible,” said ECB president Mario Draghi during his speech in Frankfurt.