'I believe that we are going to keep growing. If you are growing, you are not in recession, right? We all know that,' Mr Paulson said after a meeting in Tokyo of finance chiefs from the Group of Seven rich nations.

The G7 meeting's statement had warned that 'risks have become more skewed to the downside' in the United States amid slowing output and job creation.

The US economy has been hit by rising defaults by 'subprime' or high-risk customers, raising fears of a global credit crunch that will sap growth.

But Mr Paulson said the overall economy was healthy despite the housing problems.

'I am confident in the long-term health of the United States economy and I expect that it will continue to grow in 2008,' Mr Paulson said.

He added, however, that 'the housing correction, high energy prices and capital market turmoil have combined to weigh on near-term growth'.

Mr Paulson also played down talks of a rift between the United States and the other members of the G7 - Britain, Canada, France, Germany, Italy and Japan - over measures to boost the global economy.

Asked if he had asked other nations to push ahead with stimulus packages, Mr Paulson said: 'No, that never occurred to me.' 'Every country is different and every country has a different economic situation,' he said.

'Fellow ministers were interested to hear about what we have done,' he said.

The US government has prepared a 150-billion-dollar package (S$212 billion) to stimulate its flagging economy, while the Federal Reserve has slashed interest rates several times since last September.

But analysts say other G7 members have more limited room for measures to stimulate demand, particularly Japan, the world's second-largest economy, which has huge national debts and interest rates of just 0.5 per cent. -- AFP