World financial news

The principal risk posed by the global financial crisis has moved from a credit crunch set off by subprime mortgages to economic slowdown, the finance ministers of the 21-member Asia-Pacific Economic Cooperation said.

APEC countries, which account for 60 percent of the world's gross domestic product, will respond “quickly'' to the changing crisis by taking the necessary steps to support economic activity, the ministers said in a statement released today in Trujillo, Peru, where the group's finance ministers are meeting.

The International Monetary Fund forecast global economic growth will slow to 2.2 percent next year from an expected 3.7 percent in 2008. Policy makers around the world are cutting rates, pumping cash into the banking system and stepping up public spending in a bid to limit the affects of the crisis.

“The focus of global financial market risk now appears to have shifted from losses due to U.S. subprime mortgage defaults and the associated seizure in credit markets, to the adverse impact from a more generalized slowdown in global economic activity,'' the ministers said in their joint statement payday advance loan.

The 21 member-economies plan to keep their public spending unchanged next year even if slower economic growth leads to a reduction on revenues, Luis Valdivieso, Peru's finance minister, said. Peru is willing to narrow its budget surplus to help sustain economic growth, while other APEC economies may need to run “small deficits'' in a bid to spur expansion, he said.

“Fortunately the APEC region has a relatively strong position to face these difficulties,'' Valdivieso said. “Those needing to run small deficits have the ability to borrow and finance them.''

The biggest member economies in APEC are U.S., Japan, and China. Other members are Australia, Brunei, Canada, Chile, Hong Kong, Indonesia, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

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