May 11 (Bloomberg) -- European Central Bank President Jean- Claude Trichet, who chaired a meeting of global central bankers today, said policy makers see first signs of an economic recovery.

“As far as growth is concerned, we’re around the inflection point in the cycle, that’s the sentiment,” Trichet said today at a press conference at the Bank for International Settlements in Basel, Switzerland. A number of recent reports are “encouraging, but it’s no time for complacency.”

Central banks round the globe have aggressively lowered interest rates and governments have injected billions into their economies to stem the world’s worst recession since World War II. There are signs that the economic slump may be bottoming out. U.S. consumer confidence rose by the most in more than two years in April, a gauge of U.S. manufacturing activity had its biggest bounce since 2005 and German manufacturing orders increased for the first time in seven months in March.

Once global growth starts to pick up, central banks will have to scale back their support for the economy, Trichet said.

“Insistence is put on the exit strategy, on the medium- term path that permits us to go back to a normal situation, a sound and sustainable situation,” he said. At the same time, central banks will “do what is necessary in terms of extraordinary measures, as long as necessary,” he added.

Extraordinary Measures

The ECB last week lowered its benchmark rate to 1 percent, a record low, and announced it will buy 60 billion euros ($80 billion) of covered bonds as it steps up its efforts to revive lending.

The U.S. Federal Reserve, the Bank of England and Bank of Japan have lowered rates to close to zero and are already buying government and corporate bonds, effectively printing money to reflate their economies in a policy known as quantitative easing.

The International Monetary Fund said last month there were “tentative indications” that the rate of economic contraction is moderating around the world. The global economy will shrink 1.3 percent this year before recovering to expand 1.9 percent in 2010, the IMF said.

Trichet said financial markets have started to recover.

“There is a general sentiment, as regards a number of risk premia, a number of features such as spreads” that “we came back to the pre-Lehman situation,” he said. “It’s particularly true when you concentrate on money-market spreads.”

The London interbank offered rate, or Libor, for three- month loans in dollars declined two basis points to 0.92 percent today, the British Bankers’ Association said today. The Libor- OIS spread, a barometer of bank unwillingness to lend, fell two basis points to 72 basis points, the lowest level since July last year.

Trichet met in Basel with his counterparts from the world’s largest central banks, including Fed Vice Chairman Donald Kohn, Bank of Japan Governor Masaaki Shirakawa and China’s central bank governor, Zhou Xiaochuan.

To contact the reporters on this story: Christian Vits in Basel cvits@bloomberg.net; Gabi Thesing in Basel gthesing@bloomberg.net.

Last Updated: May 11, 2009 08:28 EDT