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Last Updated: Saturday, 3 September 2005, 13:31 GMT 14:31 UK
US economy 'safe' from hurricane

By Guto Harri
BBC North America business correspondent

A flooded New Orleans grocery store.
The reconstruction of New Orleans will take months
The financial impact of Hurricane Katrina may not be as bad as first feared, US officials have said.

Treasury Secretary John Snow said he had discussed the disaster with Federal Reserve Chairman Alan Greenspan.

He said both men felt it would not have a significant long-term effect on the US economy, although growth would be slowed for a short period.

Much of the pressure on oil supplies has been relieved by the release of 60m barrels from emergency supplies.

Challenging time

Major towns and cities lie in ruins, dozens of oil rigs and refineries have been damaged, and some experts have put a price tag of $100bn on the hurricane.

Mr Snow - who cut short his summer holiday in the UK to return to Washington - described the impact of the hurricane as mind-boggling and acknowledged that the US economy was facing a challenging time.

But its inherent strength, he said, meant that economic growth would only be hit for three to four months.

Mr Snow and his government colleagues in Washington are pleased that the International Energy Agency has agreed to release 60 million barrels of emergency oil and petroleum reserves.

Half of that will be provided by the US itself but European countries will help by shipping refined products which could start arriving here in about 10 days' time.


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