Saturday, April 25, 2009

Economic decay easing - Geithner

The severe decay in the global economy is easing but serious problems still loom, Treasury Secretary Tim Geithner said Friday.

The pace of deterioration in economic activity and global trade has lessened, he said.

"But it is too early to say risks have receded," he said. "And it is too early to conclude that we're beginning to emerge from this remarkably challenging set of pressures still working its way through the financial system and global economy."

Geithner met with finance chiefs and central bankers from the G-7 countries who have convened in Washington to talk about their continued efforts to stimulate economies.

Since a high-profile G-20 meeting in London earlier this month attended by President Obama and other world leaders, several countries -- particularly Japan -- have boosted their economic recovery programs, Geithner said.

In addition, Poland and Colombia have said they will join Mexico to apply for backstop financing from the International Monetary Fund, a global agency charged with helping countries facing economic distress.

Geithner hammered home the need for nations to work together because of the complex links among national economies.

"I think we all recognize that the recovery of the world depends on recovery of the United States," he said. "Recovery in the United States depends on recovery in the financial systems. But our recovery, in part, will depend on the strength of what we see happening around the world."

For its part, the G-7 ministers and central bankers said Friday that the global economy will "begin to recover later this year" and vowed to continue to act in concert.

"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," the G-7 officials said in a joint statement.

In a Thursday briefing preceding the G-7 meeting, a top Treasury official acknowledged that banks' troubled assets pose the biggest challenge to getting the markets moving again in the United States and globally.

The G-7 is made up of United States, United Kingdom, Japan, Germany, France, Canada and Italy.

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