Washington – Finance officials from the world’s biggest industrial powers said Friday that soaring energy prices pose a risk to global economic activity and they pledged to do all they can to limit the fallout.
The energy situation was a key agenda item in discussions among finance ministers and central bank presidents from the Group of Seven countries. The United States, Japan, Germany, France, Britain, Italy and Canada make up the group.
“Higher energy prices … have increased the risks to the outlook,” the financial officials said in a joint statement.
The finance ministers encouraged countries and producers to boost investment to increase the supply of oil, and they urged countries to explore alternative sources of energy and to improve conservation efforts.
The G-7 countries also pressed for more timely and accurate information about the oil market, which officials said could help control price fluctuations and make companies more willing to expand oil and gas production.
The finance officials met as fears grow about increasing energy prices – catapulted by Hurricane Katrina that ripped though the Gulf Coast in late August.
Energy prices could be pushed even higher by approaching Hurricane Rita, which was expected to make landfall Saturday on the Texas Gulf Coast, home to the nation’s biggest collection of oil refineries.
In another matter, finance officials called for the speedy enactment of a plan to erase billions of dollars in debt that poor countries owe the World Bank and other lending institutions.
The G-7 countries called upon members of the World Bank, the International Monetary Fund and the African Development Fund to “expeditiously complete this historic and crucial initiative.” The plan initially calls for cancelling $40 billion in debt that 18 poor countries owe to the World Bank, the IMF and the African Development Fund.
High energy prices are weighing on global economic activity. The IMF has projected the world economy will grow by only 4.3 percent this year and next, a slowdown from the 5.1 percent increase registered in 2004.
