G8 to paint rosier view of economy

Group of Eight finance ministers will probably present a rosier view of the global economy when they gather over the weekend in Italy, a senior Japanese official said Wednesday.

The Finance Ministry official, speaking on condition of anonymity, said it is likely the assessment will “not back away” from the expression used in a joint statement released in April by Group of Seven finance chiefs in Washington, citing recent positive signs in economic indicators.

But he said it is still unclear how the economic situation will be described in the upcoming joint communique.

The April G7 statement said: “Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilization are emerging.

“Economic activity should begin to recover later this year amid a continued weak outlook, and downside risks persist,” the statement by the G7 — Britain, Canada, France, Germany, Italy, Japan and the United States — also said.

The G8, comprising the seven powers plus Russia, will agree to continue to take necessary steps to make sustained growth possible, while pointing out that many uncertainties still exist for the world economy, the official said.

Once the economy stabilizes, “We have to think about exit strategies from unusual measures” taken so far to fight the global economic crisis, he said, adding that the issue will likely be taken up at the meeting Friday and Saturday in Lecce, Italy.

In this context, Finance Minister Kaoru Yosano will probably brief his G8 partners about Tokyo’s renewed commitment to improve fiscal discipline, the official said.

He said the recent rise in long-term interest rates will probably not be a major topic at the meeting, although it may be discussed to some extent in a macroeconomic context.