BASF CEO Hambrecht warns against euphoria on 2011 economic growth

27 January 2011 15:12  [Source: ICIS news]

TORONTO (ICIS)--BASF CEO Jurgen Hambrecht said on Thursday that global economic growth would continue this year, but he also warned against being too euphoric over the outlook.

“We shouldn’t exaggerate,” Hambrecht told German business TV in an interview from the World Economic Forum in Davos, Switzerland.

Last year’s strong growth reflected a “catch-up economy” after the sharp decline in 2009, he said.

Therefore, 2011 growth rates would be lower than in 2010 “but growth will be positive”, not only in China but also in Europe and the US, he said.

The biggest risks for chemical and other producers this year were raw material costs and currency stability, said Hambrecht.

“We should not underestimate [the risks] from currencies, and I hope we will be successful in keeping the euro stable,” he said.

Germany’s economics minister, Rainer Bruderle, also speaking from Davos, said rising raw material prices were due to the stronger global economy, as well as the huge increase in global liquidity during the crisis.

Central banks would be challenged to reduce that huge liquidity in coming years to a “normal measure” because that liquidity could become the basis of a new bubble, he said.

Bruderle said the actual extent of the liquidity increase was unknown, but he pointed to an estimate of $16,000bn (€11,700bn) by a US financial news service.

Germany’s government has forecast 2011 growth at 2.3%. The increase this year would come after 3.6% growth in 2010 and a 4.7% decline in 2009 from 2008.

In Germany’s chemical industry, production is expected to grow by 2.5% in 2011. This would compare with 11% growth in 2010, and a 10% decline in production in 2009 from 2008.

However, chemical employers trade group BAVC said this month that Germany’s chemical production was still 2% below pre-crisis levels and chemical firms’ investment plans continued to be marked by uncertainty over the future economic situation.

BASF is due to release its 2010 full-year results and outlook on 24 February.

($1 = €0.73)

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By: Stefan Baumgarten
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