"Deflation is a concern for the global economy, World Bank Chief Economist and Vice-President Justin Yifu Lin said Thursday. 'Of the two, deflation is a bigger concern,' Lin told a news briefing in Warsaw when asked if he saw inflation or deflation as a greater concern. He said that low capacity utilization, running at 50-60 percent in a number of large economies was an underlying reason. 'When capacity is underutilized deflation becomes a risk.'..." [Dow Jones/Factiva]

In a related story, Reuters reports that "...global trade may contract by more than 6 percent in 2009 but could return to positive growth next year, Lin said on Thursday. However, recent rises in world stock markets may point to the start of a global economic recovery, Lin told Reuters...in an interview...." [Reuters/Factiva]

Jornal do Commercio adds that "...when asked if global commerce could return to the blue in the next year, Lin said, 'Yes, there are encouraging signs, although there are still dangers and uncertainties.'... He added that in the past equity markets in the past tended to generally recover about 6 to 9 months before the real economy and that this could be the case now. 'There are concerns... but the world could recover still this year.'..." [Jornal do Commercio do Rio de Janeiro/Factiva]