Business | Economy
Inflation adding to G7 concerns on market crisis
Persistent pressures are complicating the task for central bankers
- Reuters
- Published: 00:39 April 12, 2008
Washington: Fresh signs of budding inflation added urgency to a meeting of finance chiefs from rich nations yesterday that aims to agree on how to keep a credit crisis from dragging the global economy into recession.
Ahead of an afternoon meeting of Group of Seven (G7) finance ministers and central bankers, British fin-ance minister Alistair Darling urged unity in implementing proposals from a special study group that recommends tougher scrutiny of international banks' risk management activities.
"These are uncertain times," he warned. "I want to make the case for urgent action by the world's major economies to deal with what is the biggest economic shock since the Great Depression."
On Friday Japan reported the steepest rise in wholesale price inflation in 27 years in March, while the US said import and export prices surged - with petroleum import prices up a huge 60 per cent in the past year. The persistent inflation pressures are complicating the task for central bankers, who must balance efforts to keep growth on track with their desire to control prices.
German Finance Minister Peer Steinbrueck said soaring food prices threaten to create a serious future political issue, and the topic was likely to get a lot of attention as finance officials around the globe gather for meetings of the International Monetary Fund and World Bank over the weekend.
The more immediate problem for the G7 is how to handle a hefty set of recommendations from the Financial Stability Forum for tightening bank scrutiny and settling a markets crisis that may cost up to $1 trillion in losses.
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