L-R: British Chancellor of the Exchequer Gordon Brown, US Treasury Secretary John Snow and German Finance Minister Hans Eichel attend the G7 meeting in Washington, DC.(Xinhua/AFP Photo)

    WASHINGTON, April 16 (Xinhuanet) -- The Group of Seven (G7) countries said on Saturday that the world economy is posting "solid growth" in 2005 but high oil prices and global imbalances pose a threat to the global economic growth.

    "Since our meeting in February the global expansion has remained robust and the outlook continues to point to solid growth for 2005," G7 financial ministers said in a statement issued after their meeting.

    "But challenges remain. Higher oil prices are a headwind and the expansion is less balanced than before," the statement said. "We welcome efforts to improve oil market data, increase medium-term energy supply and efficiency."

    The statement also said that "Vigorous action is needed to address global imbalances and foster growth: fiscal consolidation in the United States, further structural reforms in Europe, and further structural reforms including fiscal consolidation in Japan."

    On currencies, the ministers said that "exchange rates should reflect economic fundamentals".

    "Excess volatility and disorderly movements in exchange rates are undesirable for economic growth," the statement said. "In this context, we emphasize that more flexibility is desirable for major economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms."

    The statement was issued after the meeting of finance ministers and central bank governors from G7 countries and G7 consists of the United States, Japan, Germany, France, Britain, Italy and Canada. Enditem