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. Last Updated: 07/27/2016

Wealthy Countries See Bright Future

FUKUOKA, Japan -- If G-7 pride comes before a fall, a hard landing for the world economy can't be far away.

At a pre-summit meeting this weekend in the southern Japanese city of Fukuoka, finance ministers from the Group of Seven industrial nations vied with each other to paint the most glowing picture of global growth prospects.

"This is probably an upbeat a G-7 meeting as I have been to in a long time," said Canada's Paul Martin. "Essentially, we think that we're really onto a sustainable period of growth."

Canadian growth had strong momentum, while recent figures had instilled confidence that the red-hot U.S. economy was cooling down f but not too quickly.

France's Laurent Fabius said most economies were in good, in some respects even "brilliant," shape. Confidence in France, he noted, was at its strongest in a quarter century.

Germany's Hans Eichel said, "Growth in the euro zone is extraordinarily robust and strong," he said. "If growth in the United States pulls back, I see a chance for the European Union to take over as the locomotive as world growth."

Even Japan's Kiichi Miyazawa, whose country is struggling to shake off a decade of stagnation, was able to be less gloomy after a string of data showing rising output and investment plus growing optimism among major manufacturers.

"Mr. Miyazawa indicated a certain degree of confidence that I have not seen before in terms of where Japan was going," Martin said.

Of course it is the job of the G-7 to act as a cheerleader for the world economy, but the worries about global imbalances and overvalued stocks that weighed heavily on the last G-7 meeting in Japan, in Tokyo on Jan. 22, were conspicuous by their absence.

The record U.S. current account deficit, still running at more than 4 percent of gross domestic product, was not mentioned. Nor was the risk of a stock market crash, even though Wall Street is only 5 percent lower than it was then.

Ministers, it seemed, were happy with Treasury Secretary Lawrence Summers' judgement that the U.S. economy is indeed gliding to the hoped-for soft landing.

Many private economists suspect the United States is not out of the woods yet and that further interest rate rises could still rattle markets, with unpredictable consequences for the dollar.

In Japan, the heated debate about whether the central bank should drop its 16-month-old emergency policy of zero interest rates mirrors doubts about the sustainability of the fledgling recovery in the absence of a pick-up in private consumption.

As for Europe, economists fret that politicians are still dragging their feet over the structural changes needed to sustain growth once the present cyclical upturn runs out of steam.

For example, the International Monetary Fund warned Germany last week that a parliamentary deadlock over tax-cutting reforms would seriously dent confidence and jeopardize growth.