Leaders call for more fuel to cool global inflation

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By SHINICHI TERADA　Staff writer

TOYAKO, Hokkaido — The leaders of the Group of Eight nations addressed "strong concern" Tuesday about multiple transborder problems, including soaring energy and food prices, and urged the world's major energy producing states to increase output and refining to tame further price hikes.

They also agreed that the long-term outlook for the global economy is positive.

"We express our strong concern about elevated commodity prices, especially oil and food, since they pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable, and increase global inflationary pressure," the leaders said in their statement on economic issues.

"We are determined to continuously take appropriate actions, individually and collectively, to ensure stability and growth in our economies and globally," they said.

The G8 summit, with central bankers and financial chiefs absent, is taking place against a backdrop of oil reaching a record high above $147 a barrel last week.

However, the leaders were divided over the factors pushing up fuel and food prices.

"Some pointed out that demand is exceeding supply, while some cited speculative investment," a Japanese official said.

Soaring oil and food prices not only accelerate inflation but also batter global growth by hurting businesses and consumption, posing a serious threat to the poor.
Policymakers face the dilemma of trying to steer economic policies amid slowing growth and inflation.

Asian Development Bank President Haruhiko Kuroda said in Tokyo last week that global inflation is severe in Asia, where 1 billion people have to spend at least 60 percent of their income on food.

The Japan Times: Wednesday, July 9, 2008

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