A world recession is unlikely thisyear as fiscal and monetary policy in most industrialized
countries is supporting the economy, Deutsche Bank AG &lt;DBKG.F>
management board joint spokesman Alfred Herrhausen said.
    But growth rates will be smaller than last year, with 1.5
to 2.5 pct likely in most industrialized countries, he told a
news conference.
    Herrhausen said he was confident private consumption would
support economic growth in West Germany this year, with net
income increases turning into purchasing power as long as
inflation did not revive.
    Herrhausen said he did not expect interest rates to rise in
West Germany this year, but there was little room for further
falls. Rates in the U.S. were however rising, as evidenced by
the latest prime rate moves, but this rise would be moderate.
    Herrhausen said he did not expect any major narrowing of
the U.S. Trade and budget deficits in the next few months.
    One success of the Paris agreement in February to foster
currency stability was that U.S. Officials have stopped talking
down the dollar, he noted.
    The recent stability would last until markets decided to
test the resolve of central banks, he said.
    He noted that central banks had spent some 10 billion dlrs
this week to stabilize the dollar against the yen in the first
such test.
    "A massive attack on the mark, which could come if we get
bad news out of the U.S., Would require a much higher
intervention amount, raising the danger of inflation," he said.
    Turning to the international debt problem, Herrhausen said
Brazil's unilateral debt moratorium had surprised banks.
    But the move showed that a real solution to debt problems
was only possible with the involvement of all parties.
 Reuter
