Paulson: US, global economies can cope with turmoil

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Friday that the U.S. and global economies were in good shape to cope with threat they face from financial market turmoil.

"We confront these current challenges against the backdrop of a strong economy -- not just in the U.S., but globally," Paulson said in prepared remarks for delivery at a news conference following a meeting of Group of Seven finance ministers and central bankers.

Paulson said a U.S. housing market slump "is still unfolding and I view it as the most significant current risk to our economy." The longer that housing prices remain stagnant or fall, the greater the "penalty" to future growth, he added.

The global economic outlook for the remainder of this year and for 2008 "remains quite healthy," largely because emerging-market economies like China's are performing strongly, he said.