"I explained that we are going through a period of reassessing risk and that will take time and we will experience volatility along the way," Paulson said in a statement released at the conclusion of a two-day meeting of the Group of 20 mostly industrialized and emerging economies.
KLEINMOND, South Africa (Reuters) - Financial market turmoil may last some time, but U.S. Treasury Secretary Henry Paulson told G20 members on Sunday he was confident that the U.S. economy will keep growing.
"I explained that we are going through a period of reassessing risk and that will take time and we will experience volatility along the way," Paulson said in a statement released at the conclusion of a two-day meeting of the Group of 20 mostly industrialized and emerging economies.
Finance ministers and central bank chiefs met for talks as massive currency imbalances, oil prices near $100 a barrel <CLc1> and a global credit crunch stemming from the U.S. housing market's subprime mortgage crisis, threaten economic stability.
Paulson told his G20 counterparts that the United States faced a further downturn in its housing market.
!ADVERTISEMENT!"In discussions on the decline in the U.S. housing market, I noted it is still unfolding and I view it as the most significant current risk to our economy," Paulson said.
But Paulson said he was confident that the U.S. economy will keep growing despite the housing strains.
The U.S. economy growth at a surprisingly brisk 3.9 percent annual rate in the third quarter of the year, despite a battered housing sector that has hurt consumer confidence.
The U.S. Treasury chief's statement though made no mention of discussions that other participants said took place at the G20 about global foreign exchange moves.
Going into the meetings concern had been expressed that the U.S. dollar's fall to record lows <.DXY> was making it hard for other G20 members to maintain their share of world exports, at the same time as driving the oil price spike.
The U.S. Treasury chief is on a five-day tour of Africa that began in Tanzania and takes him to Ghana on Sunday, before returning to Washington on Monday.
Paulson said that he had urged the G20 countries, many of which are highly reliant on agricultural products, to step up efforts to revive Doha trade talks that aim to break down barriers to trade and help poor countries export more.
He said that reform of international financial institutions like the International Monetary Fund and World Bank had been "a major focus" of the G20 talks.
Paulson said the G20 could offer powerful backing for reforming the institutions and urged them to "energize" the bid to make their roles more suited to currency surveillance and to play a bigger role in more dynamic global financial markets.
Paulson said G20 members had also offered support for a U.S. proposal to develop a "best practices" code for sovereign wealth funds that have ballooned in recent years.
Countries including China, Russia and Saudi Arabia are estimated to control more than $2 trillion between them as they have racked up huge trade and oil revenues, stoking fears that the funds pose risks to financial market stability and fuelling worries about investment transparency.
(Reporting by Glenn Somerville; Editing by Nick Edwards)
