Finance Ministers from the United States and Japan say their troubled economies will recover. The comments from leaders of the world's two biggest economies came as a meeting of the 21-nation Asia Pacific Economic Cooperation (APEC) forum wrapped up in China, with a commitment to take steps to shore up the struggling world economy. Economic officials have been trying to figure out how to reverse the global economic downturn.
U.S. Treasury Secretary Paul O'Neill says the recent flood of bad economic news that sparked a decline in U.S. stock markets will get better soon. "I continue to be optimistic, not Polyannish," said the American official. "And there is no doubt that we are not running at a very good rate right now. We are still positive, but certainly not close to our economic potential rate," he said.
Speaking to reporters at the end of the APEC Finance Ministers meeting, Mr. O'Neill repeated his prediction that there will be measurable economic improvements in the next couple of months, and that by next year, economic growth will rise from its current stall to above three percent. Many private economists are predicting lower growth rates.
U.S. economic performance is under close scrutiny, after a big decline in stock markets and Friday's report of a jump in U.S. unemployment.
APEC officials say the economic slowdown in the United States makes it harder to export things to the huge U.S. market, which hurts most of APEC's already fragile export-oriented economies.
The American Treasury Secretary heads for Japan later this week for meetings with top officials on economic issues.
Economists say Japan's economic performance is being hurt by a huge number of loans to troubled companies that are unlikely to be repaid. Mr. O'Neill and other APEC Finance Ministers urged Tokyo to do more to implement financial and corporate reforms to facilitate growth.
Japan's finance minister, Masajuro Shiokawa, says some reforms are planned over the next few years. He said Japan's economy is basically sound. "We believe our fundamentals are solid and firm, and we still have a very firm and solid potential capability as well," emphasized the Japanese official.
However, recent figures show Japan's economy has been shrinking, rather than growing lately. Minister Shiokawa says that is a transitory problem that he hopes will be corrected soon.