US storms to have economic effects

STORMS battering the US Gulf Coast will soften the immediate economic outlook but rebuilding will boost growth, US Treasury Secretary John Snow told an international financial conference.

The outlook is favourable for global growth as well, but higher oil prices and persistent imbalances are risks to expansion, he said at semiannual meetings of the International Monetary Fund and World Bank.

The United States is committed to reducing its budget deficit in spite of emergency spending needed to rebuild from Hurricanes Katrina and Rita, Mr Snow said.