European Central Bank chief Jean-Claude Trichet has said world economic growth is 'robust' but inflation risks remain as markets absorb the impact of the US sub-prime crisis and higher food prices.
'Food is a very big problem' stoking inflationary pressures, along with higher energy costs, stock market corrections and the risks of protectionist trade policies, Trichet said in his role as spokesman for the G10 group of central bankers meeting in the Swiss city of Basel.
He also said central banks needed to look 'very carefully' at banks' business models in the wake of the billions of dollars in losses incurred by some of the world's leading financial institutions due to their exposure to the high-risk US mortgage sector.
The ECB head added that co-ordinated actions by central banks such as his own and the US Federal Reserve to inject much-needed liquidity into the financial markets had been 'efficient'.
He stressed that the booming economies of developing nations such as China and India had proved resilient so far in the face of the sub-prime crisis.
