G7: The economy will see a slight recovery in the coming months The top priority is the elimination of bank"s toxic assets

Alina Vasiescu

The finance minister of G7 (the group of seven industrialized nations) predict a "slight economic recovery" in the coming months, as there are signs that the worst of the recession has passed.

"The economic activity should begin to recover towards the end of the year, even though the outlook is weak, and there is still a risk of further downturn", said the ministers of finance and bankers present at the reunion of the G7, at the end of a meeting held on Friday in Washington. They added: "Recent data suggests that the decline of our economies is slowing down and some signs of stabilization have appeared".

However, G7 officials are still cautious when it comes to predicting an end to the worst recession of the post WW2 period, as long as bank"s toxic assets prevent lending. G7 promised to take all the necessary steps needed for accelerating recovery, but did not announce any new measures.

Two months ago, the finance ministers of the G7 estimated that "the steep downward trend would continue". In the mean time however, the G7 economies have begun to show stability. According to official data presented last week, new home purchases in the US exceeded estimates in March, and the confidence of German businesspeople has recovered in April, up from its lowest levels in the last 26 years.

The finance ministers of the G7 concluded that the priority for the future should be the recovery of the banking system. "The number one issue is the rebuilding of the financial system", said Canadian Finance Minister, Jim Flaherty. In turn, British Finance Minister Alistair Darling, added: "If we do not solve the banks" problems, then the economy can"t recover".