G7 Gives Brighter Outlook, Vows Economic Cooperation

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G7 Gives Brighter Outlook, Vows Economic Cooperation
By: Reuters | 24 Apr 2009 | 05:56 PM ET

Finance chiefs from the G7 powers said on Friday the downturn in their economies was easing although recovery was not yet assured, and they pledged to make certain big financial firms are sound.

Group of Seven finance ministers and central bankers said after an afternoon meeting that economic activity should begin to recover later this year, although the outlook remained weak and there was a risk that the global economy may still worsen.  "We are right to be somewhat encouraged, but we would be wrong to conclude that we are close to emerging from the darkness that descended on the global economy early last fall," U.S. Treasury Secretary Timothy Geithner said in a statement.

It was a somewhat more upbeat message than the G7 delivered at its last official gathering in February, when leaders warned that the severe downturn would persist through most of 2009 and made no mention of promising signs of stability.  "Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilization are emerging," the G7 said in a closing communique.  "We will continue to act, as needed, to restore lending, provide liquidity support, inject capital into financial institutions, protect savings and deposits and address impaired assets. We reaffirm our commitment to take all necessary actions to ensure the soundness of systemically important institutions," the statement said.

The G7 has been under growing pressure to speed up efforts to rid banks of bad assets that have constricted the flow of credit and plunged the global economy into its deepest recession since World War Two.

The International Monetary Fund urged rich nations to make repairing the financial sector a priority because the world economy cannot fully recover unless credit is flowing.

The G7, which comprises the United States, Britain, Canada, France, Germany, Italy and Japan, met a day before the IMF and World Bank begin their twice-yearly meetings. The larger G20 group, which includes emerging economies such as China and India, meets later on Friday, although no official statement is expected.

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