O'Neill says U.S. 'on track' to resume as engine of world growth

WASHINGTON (AFX) - Treasury Secretary Paul O'Neill said monetary and fiscal policy actions in the U.S. should return its economy to a role as engine of global growth, while he called for similar policy action by Europe and Japan to boost their growth."In the U.S. we're on a track to make good on the idea that the U.S. could be a strong engine of growth for the world economy, and its my hope and expectation that others will do the same," O'Neill said in a press conference ahead of tomorrow's G7 finance ministers' meeting.O'Neill said: "I have confidence in the resiliency of the U.S. economy," noting the stronger-than-expected 2.0 pct GDP growth registered by the U.S. in the first quarter."Although the U.S. economy has slowed, its fundamentals -- productivity growth, the flexibility of our labor and capital markets, and low inflation -- remain strong," he added.Saying that all major economies are now operating below their potential growth, O'Neill stated: "I attach tremendous importance to strong and balanced growth in the context of interdependent U.S., European, and Japanese economies."However, he said: "I don't have a comment on what the ECB should be doing, " adding that he "never said" the ECB should cut interest rates, despite some market interpretations of his recent remarks that he was "mystified" at European claims that Europe would be unaffected by the U.S. slowdown.O'Neill said it was "particularly inappropriate for me" to give advice to foreign monetary authorities, given that he does not comment on the Federal Reserve's stance domestically.Regarding Japan, O'Neill said Japan has a potential growth rate of 3.0 pct, and has "high hopes (the new Japanese government) will create a solution to put (Japan) on a higher growth path."He added that he was unaware of news that Bank of Japan governor Masaru Hayami plans to resign following the G7 meeting, and had no comment. 

Related stock : (NIL)