WASHINGTON. Apr 25: The world's major Industrial power's are expressing widespread optimism about global economic prospects this year. But US officials concede that they failed to win any new commitments from Japan and Germany to make the hope of better times more of a reality, reports AP.

Finance officials of the so-called Group of Seven — the United States. Japan. Germany. Britain. France. Canada . and Italy — said they believed the world economy was heading for its best performance in five years despite such threats as rising interest rates and growing trade Imbalances.

"We thought, on the whole, things were very much better than they were 12 months ago. We were quite optimistic about the outlook." British Chancellor of the Exchequer Kenneth Clarke told reporters Sunday after five ours of closed-door meetings.

The meetings were held in advance of Monday's start of the annual spring meetings of the 178-nation International Monetary Fund and its sister lending organisation, the World Bank.

Canadian Finance Minister Paul Martin said the Group of Seven officials believed that current economic fundamentals were. •'very, very good" and would lead to strong growth this year

While also expressing optimism. US Treasury Secretary Lloyd Bentsen warned that countries such as Japan and Germany still needed to do more to lift their nations out of steep recessions.

“I've .been around long enough to know that some of the optimism I heard today can fade — and fade fast — unless It Is based on credible plans." Bem en mid reporters Sunday night. We mi. t wish growth to happen. We have to make it happen."

The United States would like to see faster interest-rate reductions in Germany and a

bigger government stimulus package in Japan, including more permanent consumer tax cuts.

But officials from both Japan and Germany, the world's second-and thlrd-largest economies after the United States, argued that they have already done a lot and cannot go further without fueling Inflationary pressures.

Japanese Finance Minister Hlrohisa Fujii, expected to continue in that post under the new prime minister, Tsutoma Hata, said Japan will continue seeking to spur domestic growth as a way of reducing its record trade surpluses. But he said other nations had to be more patient In looking for results.

While IMF economists are forecasting that the global economy in 1994 should turn in its best performance In five years, that is due primarily to unexpectedly strong growth in the United States. The IMF has cut its growth forecasts for both Japan and Germany due

to the deep recessions In those countries.

German Finance Minister Theo Waigel argued that the IMF's economic outlook for Germany was too pessimistic, a point also made by the Japanese about their economy.

One of the issues discussed was the Impact of the rapid rise In long-term Interest rates since early February when the US Federal Reserve began tightening credit .in the face of unexpectedly strong growth In the United States.

French ‘ Economics Minister Edmond Alphan'dry, voicing a view also held by US officials, argued that financial markets are over-reacting to Inflation fears and that mar-, kets should soon realize this and push long-term rates lower again.

In a chairman's statement summarizing the discussions that was clearly aimed at nervous financial markets. Bentsen said. "The bottom line was: We agreed the fundamentals are good, and we reiterated that inflation remains

under control."

■The finance officials also had discussions with Russian President Boris Yeltsin's economic team, led by Deputy Prime Minister Alexander' Shokhin.

Bentsen said the Western nations welcomed Russia's commitments to reduce Its budget deficit to no more than 7.5 per cent of the total economy this year, and to bring inflation down to a monthly rate of 7 per cent by year's end. Inflation had been rising by 20 per cent per month last year.

Russia's new economic goals won approval last week from the IMF for a long delayed 1.5 billion dollars loan. Bentsen and the other finance ministers held out hope that more aid would be forthcoming soon from both the World Bank and in the form of debt relief from the G-7 countries.

Shokhin told reporters he expected to begin negotiations next month on lowering Russia's debt payments to its official creditors this year.