Washington, March 25 (Bloomberg) -- Growth will accelerate around the world in coming months, as a faster-than-expected rebound in the U.S. lifts economies in Europe and Asia, economists and executives said. ``The worst is behind us and we are in the phase of recovery,'' said Dieter Zetsche, chief executive of DaimlerChrysler AG's Chrysler Group. The U.S. is projected to grow at a 3 percent annual rate in the coming quarter, after expanding at a 4.1 percent pace in the first three months of the year, according to a Bloomberg News survey of 36 economists. Following a 1.4 percent growth rate during the fourth quarter, that would mean the world's largest economy endured the ``mildest recession in U.S. history,'' said Philadelphia Federal Reserve Bank President Anthony Santomero. From the time the recession began last March, U.D. gross domestic product declined in only one quarter, at a 1.3 percent pace between July and September. The U.S. added 66,000 jobs in February, the first increase in seven months, and the unemployment rate unexpectedly fell to 5.5 percent. The good news on jobs gave a boost to consumer confidence, which paid off in increased retail sales. Wal-Mart Stores Inc., the world's largest retailer, said last week that fiscal first-quarter sales at stores open at least a year will be at the upper end of forecasts of an increase of 5 percent to 7 percent.

Fed Rate Expectations
On Tuesday, Fed policy makers dropped their 15-month view that weak growth is the biggest risk facing the U.S. economy, and the resurgence has investors anticipating the central bank will by midyear increase the benchmark overnight bank lending rate from a 40-year low of 1.75 percent. The implied yield on the fed funds futures contract for June, tied to expectations for the Fed's May 7 meeting, is 2.01 percent, a quarter percentage point above the current rate. A revitalized U.S. is proving to be good news for the rest of the world. Europe is growing again after its economy contracted in the fourth quarter for the first time since 1993. Americans are the No. 1 investors on the continent. ``The U.S. is enjoying a period of renewed growth,'' said Franco Arquati, chairman and chief executive officer of Italy's Arquati SpA, which makes household furnishings. ``It's a very important market for us.'' Confidence is rising among manufacturers in Germany, France and Italy, which account for more than 70 percent of the economy of the 12 countries that use the euro. French and Italian industrial production rose in January. Growth may reach as much as 2.5 percent in late 2002, according to the latest forecast from the European Central Bank.

`Robust' Recovery
``We have a recovery scenario that's pretty robust,'' ECB Vice President Christian Noyer said Friday. Companies from Spanish construction materials maker Uralita SA to Puma AG, Germany's second biggest sporting goods maker, have said they expect rising earnings as growth picks up. While the pace of Europe's rebound is expected to lag the U.S., European interest rates are expected to rise. The ECB is likely to begin pushing up its main refinance rate from 3.25 percent by August, according to the median forecast of 22 economists surveyed by Bloomberg News. Sweden's Riksbank last week became the first western central bank to raise interest rates this year, lifting its benchmark repurchase rate a quarter point to 4 percent. ``This is the first of many,'' Nick Kounis, an economist at Fortis Bank in Amsterdam said. ``The Bank of England could move in May, the Fed in June and the ECB at some point after,'' he said. Also last week, New Zealand's Reserve Bank increased the official cash rate, its benchmark, a quarter-point to 5 percent as growth in Asia accelerates. South Korea is already emerging from last year's slowdown and Taiwan is escaping its worst recession in 50 years.

Good News for Japan
That bodes well for Japan, in its third recession of the past decade. Japanese exports rose in January at their fastest pace in two years. To satisfy the demand, manufacturers, who have trimmed inventories to an 11-year low, predicted the biggest increase in production in 45 years for February. A 7.5 percent depreciation in the yen over the last year has also helped lift exports. Overseas sales, which make up a 10th of Japan's economy, rose 1.6 percent in February. That helped lead the government to raise its assessment of the economy in March, for the first time in 21 months. ``Exports, which have a relatively large impact on production, have stopped declining,'' the Bank of Japan said in its monthly report, released Friday.

Additional Contraction
Still, the world's second biggest economy will shrink 1.4 percent in the fiscal year that ends this month, and contract another 0.5 percent in the coming fiscal year, according the latest Bloomberg News survey. Prime Minister Junichiro Koizumi, who marks his one-year anniversary on April 26, has come under fire for doing too little to force banks to write off the 37.4 trillion yen in bad loans that is choking off credit, and to stop the nation's 2 1/2-year bout of deflation. Signs of recovery may prompt him to do even less, economists said. ``The rising tide of a global economic recovery appears to be lifting even that rusty, leaky, bucket known as the S.S. Japan Inc.,'' said Peter Morgan, chief economist at HSBC Securities Japan Ltd. ``The risk is the ship's captain will conclude all is well and retire to his cabin for a not-so-well-earned rest.''