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World must not rely on US consumers: Snow
Dubai, Sept 25: US treasury secretary John Snow warned it is unhealthy for the global economy if countries depend on US consumers for growth, saying other nations need to foster home-grown expansion.
Dubai, Sept 25: US treasury secretary John Snow warned it is unhealthy for the global economy if countries depend on US consumers for growth, saying other nations need to foster home-grown expansion.
As he prepared to head back to Washington after a 10-day swing through the Middle East and a weekend meeting of Group of Seven finance ministers in Dubai, Snow said too many countries are relying on export-led growth. “While export growth can serve a useful purpose, you can’t have a successful world economy if everybody relies on the export sector,” he said. “Then, you build in imbalances.”
“So there’s increasing acceptance that particularly the major economies of the world need to focus on their demand-led growth, take steps to put in place reform policies that allow their domestic economies to perform well.”
Snow claimed there was growing acceptance among the G7, the US, Britain, Canada, France, Germany, Italy and Japan about the need to get growth on a faster track. He said a G7 statement issued saying the ministers agreed on an agenda for growth that committed each country to take all steps necessary to boost economic activity was a solid achievement.
“I’m really pleased that the communique hit the nail on the head on that one and recognised that, clearly, the US can’t be the only real engine of growth for the world,” Snow said. “That’s destabilising for the world economy.”
The US has been posting huge trade and current account deficits, partly because countries like Japan and China target America’s booming consumer markets for their products. One of Snow’s goals has been to persuade China to let its yuan currency float more freely so its products are priced in response to market forces. Bureau Report
“So there’s increasing acceptance that particularly the major economies of the world need to focus on their demand-led growth, take steps to put in place reform policies that allow their domestic economies to perform well.”
Snow claimed there was growing acceptance among the G7, the US, Britain, Canada, France, Germany, Italy and Japan about the need to get growth on a faster track. He said a G7 statement issued saying the ministers agreed on an agenda for growth that committed each country to take all steps necessary to boost economic activity was a solid achievement.
“I’m really pleased that the communique hit the nail on the head on that one and recognised that, clearly, the US can’t be the only real engine of growth for the world,” Snow said. “That’s destabilising for the world economy.”
The US has been posting huge trade and current account deficits, partly because countries like Japan and China target America’s booming consumer markets for their products. One of Snow’s goals has been to persuade China to let its yuan currency float more freely so its products are priced in response to market forces. Bureau Report