British Prime Minister Tony Blair ( standing L) Russian President Vladimir Putin, French President Nicolas Sarkozy, Canadian Prime Minister Stephen Harper, Japanese Prime Minister Shinzo Abe, EU Commission President Jose Manuel Baroso, Italian Prime Minister Romano Prodi, U.S. President George W. Bush and German Chancellor Angela Merkel (counterclockwise from L) take their seats to begin the first working session at the G8 summit in Heiligendamm June 7, 2007. The leaders of the G8 nations are holding their annual summit in the historic Heiligendamm sea resort on June 6-8, 2007. (Xinhua/Reuters Photo)     Photo Gallery>>>

French President Nicolas Sarkozy, Canadian Prime Minister Stephen Harper, Japanese Prime Minister Shinzo Abe, EU Commission President Jose Manuel Baroso, Italian Prime Minister Romano Prodi, British Prime Minister Tony Blair, U.S. President George W. Bush, German Chancellor Angela Merkel and Russian President Vladimir Putin, (counterclockwise from L) are seated at a table to begin the first working session at the G8 summit in Heiligendamm June 7, 2007. The leaders of the G8 nations are holding their annual summit in the historic Heiligendamm sea resort on June 6-8, 2007. (Xinhua/Reuters Photo)     Photo Gallery>>>

Japanese Prime Minister Shinzo Abe, Canadian Prime Minister Stephen Harper, French President Nicolas Sarkozy, Russian President Vladimir Putin, German Chancellor Angela Merkel, U.S. President George W. Bush, British Prime Minister Tony Blair, Italian Prime Minister Romano Prodi and European Commission President Jose Manuel Barroso (L-R) sit in an oversized beach chair in Heiligendamm June 7, 2007. Leaders from the world's major industrialised nations meet in the Baltic resort of Heiligendamm on June 6-8 for a Group of Eight (G8) summit. (Xinhua/Reuters Photo)     Photo Gallery>>>

U.S. President George W. Bush (L) meets with British Prime Minister Tony Blair at the G8 summit in Heiligendamm, June 7, 2007. (Xinhua/Reuters Photo)     Photo Gallery>>>

    HEILIGENDAMM, Germany, June 7 (Xinhua) -- More efforts should be made to adjust global imbalances when the world economy is in good shape, leaders from the Group of Eight (G8) major industrialized nations said on Thursday.

    The G8 leaders appeared upbeat about the world economy as they entered their second-day meeting in Germany's Baltic sea resort of Heiligendamm.

    "We note that the world economy is in good condition," the G8 leaders said in a statement.

    "Growth is now more balanced across regions, as it has moderated to a more sustainable pace in the United States, while domestic demand has strengthened in Europe and remains supported by robust investment in Japan," the statement said.

    The United States, the world's largest economy, is targeting the elimination of its federal budget deficit by 2012, which has lent support to its national savings.

    Robert Kimmitt, Deputy U.S. Treasury Secretary, said last month that the U.S. economy is "making the transition to a sustainable growth path."

    The European Union, which comprises four G8 members, last year registered the best performance since the turn of this century, thanks to strong domestic demands and exports. And the positive trend is set to continue in the following years.

    As to Japan, another economic powerhouse, strenuous reform efforts and fiscal consolidation has helped the economy on the upswing.

    The G8 comprises the United States, Britain, Germany, France, Italy, Japan, Canada and Russia. Altogether, the eight industrialized countries account for 63 percent of world gross domestic product (GDP) and 50 percent of worldwide trade in goods.

    Outside the G8 group, a number of countries in emerging Asia are doing even better.

    While noting that the world economy is in good shape, leaders of the world's most powerful economies said further efforts should be made to redress the global imbalances, a key issue taken by G8 nations as a main challenge to the world economy.

    The statement said it would be more favorable to make an adjustment now than in the past.

    "The economic environment has developed in a direction which favors the adjustment of global imbalances," the statement said, adding that global imbalances have been showing signs of stabilization more recently and deficits have been relatively easily financed.

    The G8 leaders pledged to go on with their domestic policies to promote adjustment of global imbalances.

    However, global imbalances took a long time to build, so their unwinding is likely to be a gradual process, entailing a medium-term rebalancing of demand growth across countries, the statement said.

    The topic of global imbalances has become a heated issue as the United States registered a huge trade deficit on one side, and on the other side some emerging countries' surpluses were enlarging, which led to their mounting foreign exchange reserves.

    The G8 leaders also called on the emerging market countries to make a contribution towards reducing imbalances.

    As to emerging economies with large and growing current account surpluses, the G8 leaders said it is crucial that their effective exchange rates move so that necessary adjustments will occur.

    Oil-producing countries should continue accelerating investment in capacity and economic diversification, the statement said.

    The G8 leaders kicked off their three-day summit on Wednesday. Under the theme of growth and responsibility, global imbalances, among other economic issues, took center stage as the talks entered the second day.