Finance officials from the world’s richest countries are in Washington for a meeting at which they are expected to offer reassurances that the world economy is not under threat from rising US mortgage defaults and high-risk hedge funds.
However, the G7 finance chiefs’ gathering could be stormy however with discord over hedge-fund regulation, currency rates and reform of the International Monetary fund.
IMF head Rodrigo Rato is upbeat. He said the global economy is poised to extend “one of the longest sustained periods of growth in the modern era.”
The UK is predicted to expand by the most in 2007 – 2.9%. The IMF’s forecast has Italy and Germany with the smallest growth among the G7 at just 1.8%.
The meeting takes place against a background of tensions over the huge trade imbalances between China and importers like the United States.
China has not send top level ministers to participate in this G7 session in Washington, but there are separate US-China talks on economic issues due to take place near the end of May.
There is likely to be spirited debate about currency rates among the finance chiefs over whether some countries are getting unfair benefits for their exports.
The European are particularly worried about that issue, with the euro at an all-time high against the yen and at its best level against the dollar in two years that is penalising euro-zone exporters.