Japan's sluggish economy is hampering growth and trade in the US and the rest of the world, US Federal Reserve Chairman Alan Greenspan said in Washington last night.
'You cannot have the second-largest economy in the world essentially stagnating without impacting the rest of us,' Greenspan said in a question and answer session before the Senate Finance Committee.
'The turgid performance of the Japanese economy in recent years has created a significant element of dampening in world economic activity and world economic trade and I should certainly hope that they can get their economy back on the track it had been on,' he added.
Meanwhile, US Treasury Secretary Paul O'Neill said he was optimistic about the US economy's long-term growth prospects, even with only modest levels of growth projected this year.
He was speaking as he left a meeting of Western Hemisphere finance ministers in Canada. Many of the ministers expressed concern over the world's largest economy's slowdown and its spill-over effects on their nations.
