Finance chiefs from the world's rich nations were gathering today to offer assurances the global economy has enough vigour to overcome a US slowdown provided that trade protectionism is resisted.
"We have always wanted the world economy to fly on more than one wing," British Chancellor of the Exchequer Gordon Brown told reporters.
He pointed to strong growth in Europe, China and India, and said problems with rising US mortgage defaults were not spilling over into the broader global economy.
"It's not a worldwide phenomenon," Mr Brown said. The Group of Seven finance chiefs begin meeting officially in mid-afternoon amid predictions the global economy will grow 4.9 per cent this year and again in 2008 after expanding 5.4 per cent in 2006 - on its best pace since the 1970s.
The G7 meeting, to be followed by semi-annual sessions of the International Monetary Fund and World Bank over the weekend, threatened to be overshadowed by a controversy involving World Bank President Paul Wolfowitz.
The Bank's board of directors was considering whether to take action against him over a well-paid promotion for his girlfriend. One influential newspaper, the Financial Times, called for the former Pentagon deputy to resign from his position leading an institution that aims to fight poverty.
US officials said ahead of the G7 meeting that they understood other countries wondered whether US mortgage defaults risked turning an economic slowdown in the world's largest economy into something worse.
But US Treasury Secretary Henry Paulson will tell other G7 members that "by mid-2007 the worst should be behind us" on housing, Treasury Under Secretary Tim Adams said yesterday.
Essentially, the message will be that global growth is rebalancing successfully as Europe and other areas pick up speed, while US growth slows.