As G8 leaders implicitly recognised that a small elite can no longer tackle the global downturn, the International Monetary Fund warned of a weak economic recovery and forecast a slightly steeper 1.4 percent contraction of the world economy in its latest outlook, though predicting 2.5 percent growth next year.

During talks on Thursday, a breakthrough on trade seemed to be within reach as leaders vowed to conclude the Doha round of trade talks aimed at liberalising global markets by next year, a draft declaration said.
Leaders in L’Aquila also agreed to refrain from competitive currency devaluations and promote a stable international financial system. Chinese officials stressed the need for a more diversified currency system in the wake of the financial crisis.

Chinese President Hu Jintao was not present at the talks after hurrying back home in the wake of deadly riots in the north-western Xinjiang province, where officials say 156 people were killed in ethnic clashes in the main city of Urumqi.

Iran crackdown

The summit also addressed the post-electoral violence in Iran, where security forces have cracked down on demonstrations in the wake of the disputed June 12 presidential election which handed President Mahmoud Ahmadinejad a second term.

G8 members issued a joint declaration expressing “serious concern about the recent events in Iran,” but fell short of taking any concrete steps against the country.

On the nuclear front, French President Nicolas Sarkozy said the world’s richest nations would give Iran until September to accept negotiations over its nuclear programme or face tougher sanctions.

On the margins of the global get-together in the earthquake-struck Italian town, the French president also called for the “immediate” release of a young French academic held in Iran on charges of espionage.