G-8 ministers upbeat on global growth

ST PETERSBURG: The Group of Eight finance ministers said that global economic growth remains strong but high energy prices and global imbalances pose continuing dangers. US treasury secretary John Snow said the US was upbeat on the state of the world economy. “We see no major crises, no major economies in recession, we see strong growth and inflation well-contained,” he said at a news conference. “That’s a commendable set of results.”

The finance ministers from the world’s most industrialised nations, meeting ahead of next month’s summit of G-8 leaders, said global growth “is gradually becoming more broadly based,” but risks from “high and volatile energy prices and widening global imbalances” remain.

The ministers’ statement did not refer to the inflationary pressures that led several central banks around the globe to raise interest rates this week but, at a news conference after the meetings, French finance minister Thierry Breton said that inflation was “clearly under control.”

Russia, which is leading the G-8 for the first time, has been resisting European Union pressure to ratify the Energy Charter, a pact designed to provide a mechanism for crafting predictable market conditions for producers and consumers. The document will require Russia to open its export pipeline network and other energy assets to foreign investors. Russian finance minister Alexei Kudrin reiterated Russia’s call for the charter to be overhauled.

Russia’s push for accession into the World Trade Organisation has been stymied by disputes with the US over financial market liberalisation and other issues. But Mr Snow said on Saturday that progress had been made and the two nations could reach a deal by next month’s summit.

Russia, whose export-oriented industries stand to profit handsomely from the freer access to Western markets that WTO membership would bring, has been negotiating to join the 149-member global commerce body since 1994. It has had to embark on a major set of legislative reforms to fall in line with WTO rules, including producing a new customs code.

Russia is eager to flex financial muscles that have been buffed by billions of dollars in oil money at a time of record world prices. It is the world’s second largest oil exporter, after Saudi Arabia.

This week, Russia gained Australia’s support for its campaign to join the WTO. It previously signed agreements with the EU, China and Japan. The other G-8 members are Japan, Britain, Italy and Canada.