G7 Financial Meeting Eases Worry About US Economy

"Although global growth this year is likely to be somewhat slower than we expected, the basic factors that have supported sustained growth in many of the major industrial economies remains in place," said the statement released Saturday following a meeting of the Group of Seven (G7) finance ministers and central bank governors in Palermo, Sicily.

Worries that the abrupt US slowdown could have ripple effects on the rest of the world were the key issue at the meeting.

However, new American Finance Minister Paul O' Neill expressed optimism about the economy. "The world has only seen the beginning of the golden era of the economy, fruit of the great progress of the technology and therefore there is potential of growth for all, " he told a press conference.

But Italian Central Bank Governor Antonio Fazio said at a news conference that the International Monetary Fund (IMF) has slashed its forecast for economic growth in the United States this year to 1.7 percent.

The forecast, circulated at the G7 financial meeting, is well below the IMF's last official forecast of 3.2 percent published in October and below the Federal Reserve's official estimate of 2 to 2.5 percent issued last week.

The G7 consists of the United States, Germany, Japan, Britain, France, Italy and Canada. Italy is current G7 chairman.

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