G-7 officials confident in global economy
WASHINGTON — Finance officials from the world’s wealthiest countries expressed confidence Friday that the global economy will experience strong growth despite risks.
“Although risks remain, the global economy is having its strongest sustained expansion in more than 30 years and is becoming more balanced,” the finance ministers and central bank presidents said in a joint statement.
The officials from the world’s seven leading industrial countries — the United States, Japan, Germany, Britain, France, Italy and Canada — projected confidence that various troubles such as soaring trade deficits, jittery financial markets and a slumping housing market in the United States will not be enough to derail growth.
The G-7 finance officials pledged to resist growing protectionist pressures in their countries, a movement being spawned by soaring trade imbalances such as the fifth consecutive year of a record trade gap in the United States.
They pledged to make structural reforms in their own economies to reduce the yawning trade gaps and called on China to do more to introduce flexibility into its currency system, which American manufacturers believe is necessary to curb China’s huge trade surpluses.
“We remain aware of the risks to the world economy,” Treasury Secretary Henry Paulson said in comments to reporters after the meetings. “Fuel prices remain high and volatile. Protectionist pressures are rising. Global financial markets are vulnerable to reversals, as we saw earlier this year.”
The discussions, which were led by Paulson and Federal Reserve Chairman Ben Bernanke, took place in advance of weekend meetings of the 185-nation International Monetary Fund and World Bank.
The finance discussions were occurring at a time when the global economy, according to the IMF’s new forecast, is expected to grow at a sizzling pace of 4.9 percent both this year and in 2008.
Growth in the United States, the world’s largest economy, is projected to slow to just 2.2 percent this year, the weakest showing since 2002, when the country was pulling out of a recession.
IMF economists warned that the prospects for global growth could be derailed if the slowdown in the United States becomes more severe or if other potential threats occur.