/ 11 June 2006

G8 ministers say global economy is strong

Finance ministers from the world’s most-industrialised nations were upbeat on Saturday about the state of the global economy, despite global jitters over rising interest rates and tumbling stock indices.

While the final statement issued by the Group of Eight ministers focused firmly on the dangers of galloping oil prices and ”widening” global imbalances, it made no mention of the recent declines on world markets and inflation-fighting interest hikes in several countries. Ministers later brushed aside fears of economic turbulence.

”As we look around the global economy today we see no major crises, no major economies in recession, we see strong growth, inflation well-contained, interest rates at the low end of the historic level and rising prosperity,” United States treasury secretary John Snow said at a news conference. ”That’s a commendable, commendable set of results.”

French Finance Minister Thierry Breton noted that inflation was ”clearly under control” and that recent European Central Bank interest-rate hikes were in fact a vote of confidence in the European economy.

”People might try to point up certain risks and say the glass is half-empty, but the fact is that the world-economic situation is very stable,” German Finance Minister Peer Steinbrueck said after the meetings.

Japanese Finance Minister Sadakazu Tanigaki sounded a note of caution, however. He warned that while recent stock price drops weren’t necessarily the result of sea changes in the global economy, the declines were nonetheless a ”major economic indicator”.

”We, of course, must watch the stock market carefully,” Tanigaki was quoted as saying by Dow Jones Newswires.

Ministers called for transparent and reliable energy market data and a global system for tracking supply and demand as a means for tackling ”high and volatile” oil prices. — Sapa-AP