Leaders of the Group of  Eight countries warned today at their summit in Japan, that soaring oil and food prices pose a "serious challenge" to world economic growth and called for in increase in production capacity.

"The world economy is now facing uncertainty and downside risks persist," the G8 said in a joint statement.

"We express our strong concern about elevated commodity prices,  especially of oil and food, since they pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable and increase global inflationary pressure," the statement said.

"We are determined to continuously take appropriate actions,  individually and collectively, to ensure stability and growth in our  economies and globally,"' they added.

The statement said: "We have strong concerns about the sharp rise in oil prices, which poses risks to the global economy. Concerted efforts are needed to address the underlying causes for the benefit of all. On the supply side, production and refining capacities should be increased in the short term. Joint efforts are also necessary to expand upstream and downstream investment in the medium term. Oil-producing countries should ensure transparent and stable investment environments conducive to increasing the production capacity needed to meet rising global demand. On the demand side, it is important to make further efforts to improve energy efficiency as well as pursue energy diversification.

In reconfirming the shared interest and responsibility of energy producing and consuming countries in promoting global energy security, we will enhance further dialogue and partnership. In this regard, as a follow-up to the recent Jeddah Energy Meeting, we look forward to the meeting to be held in London later this year. Also, we encourage major countries that are not IEA (the International Energy Agency - adviser to 27 developed countries) members to deepen their dialogue with the IEA, including through active participation in IEA programs, as appropriate."

The leaders said that"to enhance energy security, we propose holding an energy forum to focus on energy efficiency and new technologies, which could also contribute to dialogue between producers and consumers.

Greater transparency will lead to better functioning energy markets and hence a better balance between supply and demand. Therefore, we need to improve collection and timely reporting of market data on oil and develop shared analysis of oil market trends and outlook. We therefore continue to strongly support the Joint Oil Data Initiative (JODI) as a significant contribution in the efforts for information sharing including on oil stocks among energy producers and consumers. We support the efforts of the JODI partner organizations including the International Energy Forum (IEF) to realize further progress of JODI in terms of quality, completeness and timeliness of information. We stress the importance of energy markets which send undistorted price signals and are free from any political pressure. We welcome the G8 Finance Ministers’ request to the IMF and the IEA to jointly carry out further analysis of real and financial factors behind the recent surge in oil and commodity prices, their volatility, and the effects on the global economy. We also welcome the efforts taken by relevant national authorities for increased transparency of commodity futures markets and encourage further cooperation between them."

There were no agreement on measures that could impact the commodity boom.

National Reports on Global Energy Security Principles and St. Petersburg Plan of Action

G8 countries: Canada; France; Germany; Italy; Japan; Russia. United Kingdom and United States.