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US economy 'set to gain momentum'

WASHINGTON: US Treasury Secretary Henry Paulson said yesterday the US economy was set to pick up steam later this year, and pledged to fight any effort at trade protectionism that could slow growth.

"We are committed to keeping the US economy open to trade and investment, which underpins our economic strength, and to opposing protectionism whenever and wherever it arises," Paulson told a meeting of the International Monetary Fund.

Paulson said US economic prospects were good and played down the impact of a recent slowdown.

"While economic activity slowed below potential in late 2006, we expect GDP growth to rebound to three per cent by the end of this year," he said.

He said IMF-sponsored talks over the past several months on how to reduce global imbalances - principally big US deficits and corresponding surpluses in Asia and elsewhere - had been useful and said they weren't designed to be binding.

"While these consultations were never intended to produce joint policy commitments, they still contributed importantly to improved understanding about the participants' shared responsibilities for promoting adjustment of imbalances," he said.

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