The Group of Seven major economies said on Friday that they expected global economic activity to begin to recover later this year after the worst global slump in decades.
"Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilization are emerging," a G7 statement said. "Economic activity should begin to recover later this year amid a continued weak outlook and downside risks persist."
The G7 -- Britain, Canada, France, Germany, Italy, Japan and the United States -- said they were "committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again."
As part of efforts to tackle the crisis, the G7 said they would continue to provide and increase resources for the International Monetary Fund and other multilateral institutions to ensure they could help restore global financial stability.
"We will take whatever actions are necessary to accelerate the return to trend growth rates while preserving long-term fiscal sustainability," the G7 said, apparently referring to concerns that governments are taking on too much debt to fund economic stimulus programs.
They also agreed to continue, "as needed, to restore lending, provide liquidity support, inject capital into financial institutions, protect savings and deposits and address impaired assets."
The current crisis was "the deepest and most widespread economic downturn and financial stress witnessed in decades," the G7 said, saying they "have acted resolutely to support growth and restore confidence in the financial system and the flow of credit."
The crisis was sparked by a credit boom based on the US subprime or higher risk home loan market which collapsed in mid-2007 as weaker borrowers could not keep up payments when the economy began to slow.
Many banks were heavily exposed and in order to limit their losses, cut lending, setting off a chain reaction through the US and then global financial systems which saw many lenders and other companies fail for want of cash.
The resulting credit crunch plunged the global economy into the worst recession in more than 60 years, with the IMF expecting a contraction of 1.3 percent this year and growth of just 1.9 percent in 2010.
The G7 agreed on the need to avoid new barriers to trade or investment and welcomed China's continued commitment to a flexible exchange rate system which should help promote more "balanced growth in China and the world economy."
The United States has long complained that its domestic market has been far too open to countries, such as China, which have largely built their economy around export industries, with domestic consumption secondary.
Additionally, the G7 "reaffirmed our shared interest in a strong and stable international financial system," with volatility and disorderly foreign exchange moves harmful and so to be monitored closely.
Part of the US complaint against countries such as China is that they keep their currencies artificially weak so as to boost exports.
The G7 statement concluded with the need to boost financial sector regulation, "to include all systemically important institutions, markets and instruments" so as to avoid a repeat of the crisis.
Clary
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