WASHINGTON (Kyodo) Finance chiefs from the Group of Seven industrial powers agreed Friday to continue to take every step possible to restore growth and prevent a recurrence of the crisis the world is now experiencing, while maintaining hope the economy will pick up later this year.

Finance ministers and central bankers from the G7, meeting in Washington, struck a somewhat optimistic note on the future, their first since last September, when the financial crisis exploded in their faces and crippled credit markets worldwide.

But they did not forget to warn the world that the global economy is still filled with downside risks.

“Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilization are emerging,” they said in a joint statement. “Economic activity should begin to recover later this year amid a continued weak outlook, and downside risks persist.”

After the one-day meeting, U.S. Treasury Secretary Timothy Geithner cautioned policymakers around the world against complacency.

“It’s too early to conclude that we are beginning to emerge from this remarkably challenging set of pressures,” Geithner, hosting a ministerial meeting for the first time, said at a news conference.

The finance chiefs underscored the importance of nailing down commitments made in London by leaders of the Group of 20 in early April.

“As our leaders underscored in London, we are committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again,” said the communique released by the chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States.

“We will take whatever actions are necessary to accelerate the return to trend growth, while preserving long-term fiscal sustainability,” it said.

These actions, they said, include restoring lending, offering liquidity help, injecting capital into struggling financial institutions, protecting savings and deposits, and dealing with impaired assets.

The G-7 assessed the global economic outlook, market developments and the actions taken so far, as well as discussing regulatory reform, to counter the crisis at a time when some positive signs in capital markets have also been noticed.

“The worst may be over. That’s my understanding” of what the statement “indirectly expressed” about the state of the world economy, Finance Minister Kaoru Yosano said at a news conference.

Still, the International Monetary Fund’s latest economic outlook report, released earlier this week, said the world economy is projected to contract 1.3 percent this year, against the previous estimate in January of 0.5 percent growth, which was already the worst pace since World War II.

The G-7 statement welcomed the progress being made to expand the role of the IMF in the global economy, such as the issue of tripling its leading resources to $750 billion, one of the central achievements of the London summit.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.