US Treasury Secretary Mr John Snow expects the US economy to grow by 3.3 per cent this year thanks to a huge stimulus package, a US Treasury official said as a Group of Seven meeting got under way in Paris last night.

The official said bilateral meetings between Mr Snow and his counterparts from France, Germany, Italy and Russia were dominated by the Europeans' questions about the US economic outlook and US President Bush's $674-billion (€626-billion) stimulus proposals. Mr Snow "made the point that by strengthening our... economic recovery, that since we are the world's largest economy we will boost the world's economy", US Treasury spokesman Mr Robert Nichols said.

"The US must lead by example," Mr Snow told his counterparts, according to Mr Nichols.

The G7 meeting comes as economies around the world struggle to cope with uncertainty caused by the threat of war in Iraq, which is weighing heavily on financial markets and consumer and business confidence.

The Treasury Secretary told his G7 partners that the US economy was "in recovery, and it's growing, but it's not growing fast enough." Mr Snow said earlier that lifting global growth should be the key focus of the meeting, hosted this weekend by France.

Iraq had also come up in the conversations in the context of the uncertainty about the situation, which was affecting both the economic outlook and oil prices.

But possible contingency plans for economic policy action in the event of war breaking out in Iraq were not discussed during the meetings, the official stressed.

In his bilateral meeting with French Finance Minister Mr Francis Mer, Mr Snow stressed there should not be an assumption that war with Iraq was inevitable, the US official said. Both Mr Mer and Mr Snow agreed that oil prices were not at alarming levels and should stabilise in time.

In talks with Mr Mer, Mr Snow also reaffirmed his support for a strong dollar policy.

Policymakers in Europe and Japan are growing increasingly concerned that the dollar's weakness could stall a recovery in their export-oriented economies as their products become more expensive on world markets.

Mr Mer had asked about Mr Snow's position on foreign exchange during an hour-and-a-half long meeting, and Mr Snow stood by the strong dollar policy.

Despite US insistence on the strong dollar policy, the dollar has fallen sharply against the euro and the yen on concerns about the swelling US current account deficit and the looming threat of US military strikes in Iraq.

Development and the struggle against the financing of terrorism topped the meeting's agenda, which continues today. The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States. Russia will also attend some meetings, turning them into G8 forums.