G-7 sees no overarching remedy for markets

TOKYO -- The world's top economies on Saturday promised coordinated action to restore confidence in global markets as financial turmoil slows U.S. growth, but with each country having different priorities, they didn't offer a specific remedy.

The Group of Seven industrialized countries warned of risks in the troubled American economy and housing sector, but leavened that with assurances that the world's biggest economy would grow this year, albeit at a slower pace.

World financial markets have been battered amid worries about a possible U.S. recession and uncertainty about the subprime mortgage crisis that has led to billions in losses at major banks. A main thrust of Saturday's meeting was to reassure the world that the U.S. wasn't in recession.

"I believe that we're going to keep growing," said U.S. Treasury Secretary Henry Paulson. "If you're growing, you're not in recession."

The officials — from the United States, Japan, Germany, France, Britain, Italy and Canada — pledged to take actions on their own and together to "secure stability and growth in our economies," without outlining specifics.

The G-7 had faced calls for increased coordinated action to deal with the U.S. housing problems in subprime mortgage loans, financial market turmoil, heightened inflation expectations, and high oil and commodity prices.

Paulson, however, dismissed speculation that Washington had encouraged its trading partners to follow the U.S. lead to boost demand by cutting interest rates and offering tax rebates.

"Every country's different ... and every country needs to focus on their own economic situation," he told reporters after the meeting. "The discussion was on really how do we minimize the spillover from what's going on in the capital markets to the broader global economy."

Congress on Thursday passed a $168 billion stimulus package of tax rebates for American consumers, business tax write-offs and other measures. The Federal Reserve lowered a key interest rate to 3% late last month after a series of cuts totaling 1.25 points.