ADB sees 'mild recovery1 next year

AFP, Xusa Duo. Indonesia

The Asian Development Bank (ADB) called Monday for a fundamental "rebalancing” of regional economies in response to the global crisis, while predicting a "mild recovery"next year

Bank President Haruhiko Kuroda said the region would record only 3.4 percent growth this year but could expect a rebound to around 6.0 percent growth in 2010, as he opened the ADB's board of governors annual meeting in Bali.

"With strong national and regional efforts and a mild recovery expected in the global economy next year, developing Asia and the Pacific should bounce back to about 6.0 percent growth in 2010," he said.

"These are positive signs, therefore this should not be a time of despair."

He outlined a huge expansion in the ADB's lending plans to help stimulate developing economies across Asia, after shareholders agreed last week to triple the bank’s capital base in response to the global downturn.

The bank will increase its overall lending assistance by more than 10 billion dollars in 2009 and 2010, including three billion to meet "urgent needs stemming from the crisis," Kuroda said.

Fiat aims to create global car giant with GM tie up

AFP, Milan

Fiat chief executive Sergio Marchionne on Monday outlined a plan to create a new global car giant that would link up with General Motors' European operations after rescuing bankrupt Chrysler.

"From an engineering and industrial point of view, this is a marriage made in heaven," Marchionne told the Financial Times in an interview published Monday ahead of talks with German ministers on his proposal, which he wants completed by the end of May.

Fiat's share rose by more than six percent to 8.02 euros on the Milan stock exchange on Monday after news of the plan was released.

Opel of Germany forms the core of GM's European operations, which also include Vauxhall in Britain and Saab in Sweden, and Marchionne will need the backing of the German government for his ambitious plan.

The Fiat boss said the Italian carmaker and Opel would form a publicly traded company with revenues of about 80 billion euros (106 billion dollars) and sales of six or seven million vehicles a year -- putting it on a par with Volkswagen, the world's second biggest maker behind Toyota of Japan.

China Eastern sells two

Airbus jets to raise cash

AFP, Shanghai

China Eastern Airlines said Monday it had agreed to sell two Airbus A340 jets for 590 million yuan (86 million dollars) to improve its cash flow, but added it would lease the planes back.

The nation's third largest carrier by fleet size said it sold the two planes to China's Bank of Communications Financial Leasing Co Ltd, in a statement filed with the Shanghai Stock Exchange.

China Eastern said last month it hoped to receive more financial support from Beijing after receiving seven billion yuan in aid, but that the government had not yet made any commitments.

The airline said it intended to channel the proceeds from the sale of the aircraft into its operations.

It will pay about 17 million yuan for each aircraft per quarter to lease them back over the next five years, the carrier said.

China Eastern suffered a net loss of 15.3 billion yuan last year due to falling passenger numbers, rising fuel costs and bad bets on fuel hedging contracts.

German retail sales plunged 1.5pc in March

AFP, Frankfurt

German retail sales plunged by 1.0 percent in March from the previous month, figures released on Monday by the national statistics office showed, as rising unemployment hit consumer sentiment.

Analysts polled by Dow Jones Newswires had forecast a much more modest drop of 0.2 percent in Europe’s biggest economy,

On a 12-month basis, retail sales shed 1.5 percent, the Destatis statistics service said, even though March 2009 had two more working days than the same month a year earlier.

Among non-food products, German shoppers nonetheless picked up more cosmetics and pharmaceutical items, the data showed.

Mail-order and Internet sales were also stronger.

But the sharp drop increases the chances that the European Central Bank will cut its main interest rate to a record low of 1.0 percent on Thursday to give the recession-hit 16-nation eurozone ecbnomy a further boost.