The G7 finance ministers and central bank governors issued a statement today indicating that they believe, “Overall global growth remains and should continue to be solid although slowed by high and volatile oil prices.”

They noted that risks include rising protectionist sentiment, the possibility of increasing inflationary pressures and growing global imbalances, which have been exacerbated by high oil prices. “We are each taking steps to address these imbalances as we set out at our last meeting. But more vigorous, mutually reinforcing action is now needed from the G7 and other countries to accelerate this process in a way that maximizes sustained growth,” they said.

In the statement, the ministers reaffirm that exchange rates should reflect economic fundamentals, adding, “We expect that further flexible implementation of China’s currency system would improve the functioning and stability of the global economy and the international monetary system.”

They also noted that progress from the Doha Development Round by the end of 2006 is essential to enhancing global growth and reducing poverty.

And, they published a progress report concerning the continued fight against terrorist financing and financial crime, calling on the international standard setting bodies to cooperate fully with initiatives of the Financial Stability Forum on the codes and standards that underpin global financial markets and the process in relation to offshore centres established at its March meeting.