G8 says high oil prices threaten economic growth

July 8th, 2008 - 5:27 pm ICT by IANS  

Toyako (Japan), July 8 (DPA) The Group of Eight (G8) leaders warned Tuesday that spiralling oil prices were threatening global economic growth. Meeting in the northern island of Hokkaido, the heads of state and government of the world’s most industrialized countries called for “concrete steps” to reduce the imbalance between supply and demand and agreed to hold a special energy forum to focus on energy efficiency and new technologies.

“We have strong concerns about the sharp rise in oil prices, which poses risks to the global economy,” the leaders said in a statement issued during the second day of their summit.

While the long-term outlook of their economies remained “positive,” they said the global economy as a whole was currently facing a period of “uncertainty” and that “downside risks persist.”

High food and oil prices posed “a serious challenge to stable growth worldwide” and had “serious implications for the most vulnerable” while also adding to “global inflationary pressure.”

The summit in Toyako was taking place amid oil prices of around $140 per barrel, twice as much as what a barrel cost when G8 leaders met in Germany last year.

High petrol prices have been blamed for a sharp rise in inflation, particularly in Europe, and prompted a majority of G8 leaders in Toyako to call for expanding the use of commercial nuclear energy.

Other proposed solutions included boosting short-term production and refining capacities and greater market transparency to avoid speculation. On the demand side, countries should reduce their dependance on hydrocarbons and improve energy efficiency.

The G8 leaders said that despite the slowing down of their economies, growth in emerging market economies remained strong.

They vowed to “resist protectionist pressures” and called for a “balanced and comprehensive” trade agreement in the Doha rounds trade talks under the World Trade Organisation.

While financial market conditions had “improved somewhat,” serious strains sparked by last year’s subprime mortgage crisis continued, they said.

The G8 comprises Britain, Canada, France, Germany, Italy, Japan, the United States and Russia.

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