A look at economic developments around the globe

AP News
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Posted: Nov 19, 2009 2:38 PM

A look at economic developments and activity in major stock markets around the world Thursday:

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PARIS _ Recovery in developed economies will accelerate next year due to "substantial improvements" in financial markets and fast-growing Asian countries, but is likely to remain fragile, the Organization for Economic Cooperation and Development said as it doubled its 2010 growth forecast.

The Paris-based watchdog's chief economist, Jorgen Elmeskov, told a news conference that the recovery has been mostly driven by government stimulus measures and interest rate cuts.

Still, the recovery will remain modest next year, with the U.S. and Japan outpacing Europe, the OECD report said.

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LONDON _ U.K. retail sales rose in October but lending conditions remained tight.

The 3 percent rise in retail sales was the best figure since August of last year and due largely to a 3.9 percent boost to food sales, the Office for National Statistics said.

However, separate figures showed the flow of credit in the British economy had not yet recovered from the credit crunch and threatened any rebound in growth.

The Bank of England said lending to British businesses shrank by 4.6 percent in September, driving the 12-month growth rate to a record low of minus 6 percent.

Major banks expect subdued demand for new lending through the fourth quarter, the Bank said.

In European trading, the FTSE 100 index of leading British shares closed down 1.4 percent, Germany's DAX fell 1.5 percent and the CAC-40 in France ended 1.8 percent lower.

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TOKYO _ Asian stock markets were mixed. Japan's Nikkei 225 stock average lost 1.3 percent _ its seventh straight day of decline as investors succumbed to jitters about a possible glut of new bank shares after Mitsubishi UFJ announced plans to raise capital. Hong Kong's Hang Seng fell 0.9 percent, while Taiwan's benchmark shed 0.1 percent and Indonesia's market was 0.6 percent lower.

Other markets fared better: South Korea's Kospi added 1 percent to lead the region, China's Shanghai index rose 0.5 percent and shares in Singapore closed up 0.6 percent.

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PARIS _ France risks attracting the ire of its European neighbors when it unveils plans to raise tens of billions of euros in new borrowing just as its EU partners are being urged to begin reining in the stimulus packages that caused deficits and debts to skyrocket.

Electric cars, wind power and broadband Internet are among the industries already lining up for their share of France's so-called "Big Loan" program, a euro35 billion ($52 billion) public spending plan dreamt up by President Nicolas Sarkozy as a way to fuel France's long-term economic growth.

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FRANKFURT _ German employment fell slightly in the third quarter compared with the prior three months and from a year earlier, the Federal Statistical Office said.

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SINGAPORE _ Singapore said its economy would expand as little as 3 percent in 2010, well below the high growth rates of past years because of a sluggish recovery in the U.S. and other developed countries.

Meanwhile, the city-state said gross domestic product expanded an annualized 14.2 percent in the third quarter following a jump of 21.7 percent the previous quarter.

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AMSTERDAM _ The Dutch government announced a new euro4.4 billion ($6.5 billion) bailout package for nationalized bank ABN Amro, intended to help the bank restructure and return to a strong financial position ahead of an eventual sale or return to the stock market.

The bailout comes on top of a euro2.4 billion cash injection in June and the euro16.8 billion the state paid to buy the banks' Dutch businesses to save them from an impending bankruptcy in October 2008.

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LONDON _ The British government proposed tough new banking laws that would give the country's main financial watchdog the power to claw back bonuses that breach internationally agreed rules, among other powers.

The heavy-hitting proposals reflect an increased effort by Prime Minister Gordon Brown's ruling Labour Party to tackle banking reform ahead of a general election next year.

The bill will be debated on Nov. 26 and lawmakers in the House of Commons may vote on it as early as next month.

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OSLO _ Norway's largest financial group, DnB NOR ASA, said shareholders approved a 14 billion kroner ($2.5 billion) rights issue to offset losses suffered during the financial crisis.

The rights issue is being underwritten by a syndicate of banks, including Morgan Stanley, and supported by DnB NOR's largest shareholders, among them the Norwegian government with a 34 percent stake.