02/09/2008, 00.00
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G7 ministers: the global economy is slowing

The mortgage crisis in the United States, inflation, and general uncertainty lead to pessimism among the seven most industrialised countries, at least for the short term. There is a generic commitment to work together for financial stability, but concrete proposals are lacking. "Recommendations" for oil producers and for China.

Tokyo (AsiaNews/Agencies) - The finance ministers of the seven most industrialised countries, meeting in Tokyo today, say they believe that global economic growth could slow down even further, although the foundations of the system remain solid.  They have not, however, proposed any specific countermeasures. 

In a statement, G7 ministers and central bank officials say that the worldwide economic situation is more "difficult and uncertain" compared to its condition at their most recent meeting last October. "In all our economies, to varying degrees, growth is expected to slow somewhat in the short-term, reflecting wider global economic and financial developments".  They indicate among the main causes a possible "further deterioration of the US residential housing markets", deterioration of credit markets, and the expectations for high inflation in some countries.

The subprime mortgage crisis in the United States has led to serious losses for many financial companies - especially banks - above all in the United States and Europe, which invested very heavily in this sector.  Last week, the International Monetary Fund made a downward revision to its forecast for world economic growth: from 4.4% to 4.1%, the lowest level in five years.

The finance ministers of United States, Japan, Germany, Great Britain, France, Italy, and Canada say they "stand ready to take any further action necessary to enhance stability in the financial market",  but they are not announcing any immediate coordinated action, for example in the economic sphere or in the stock market.  The approach of Britain's finance minister, Alistair Darling, has prevailed - he observes that "conditions in different countries are not the same", and he therefore believes that each one should act according to its own needs.

The measures indicated are already well known: the recommendation that oil producers increase production in order to keep prices under control, as well as the request that Beijing permit an adequate revaluation of the yuan.

Japan has advised the adoption of mechanisms to require banks and financial institutions to be more transparent in their operations.

While all of the G7 countries have experienced slow growth in recent years, the economies of China, India, and east and southeast Asia have grown rapidly.  But there is concern that the crisis in the United States could also strike Asia, whose industry is highly dependent on exports to the U.S., and on foreign investment.

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Credit crisis “Made in China”
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