Stimulate growth, US tells G7

By Andrew Walker
BBC World Service economics correspondent

Mr Snow says the US is doing its bit for world economic growth

Finance ministers from the group of seven leading powers and Russia are meeting in Deauville in northern France.

They are gathering against a background of a weak global economy and the host, French Finance Minister Francis Mer, says that boosting growth will be the main focus of the talks.

The US Treasury Secretary John Snow said ahead of the meeting that other members of the G7 should immediately take steps to spur growth and create jobs.

The US is growing at a modest pace. But the other members of the group are in worse shape.

Doing worse

New economic data published in the past few days shows Germany in recession and Japan registering no growth at all.

And the divergence could become more pronounced. The decline in the dollar in recent months has made American companies more competitive, but firms in Germany and Japan will find it harder to sell abroad.

The new figures for those two countries showed that exporters were already doing worse.

But Mr Snow talked down the prospect of any concerted G7 action to reverse the dollar's fall.

Worry

Some economists think that the falling dollar suits the US very well.

There is a very large deficit in US trade with the rest of the world. A lower dollar may correct that.

And by making imports more expensive it reduces the risk of deflation - or falling prices.

It is a problem that US central bank officials have started to worry about. It can cause severe economic damage, as it has in Japan in the past decade.