WASHINGTON (AP) – World finance officials sought on Friday to project a feeling of confidence that the global economy will not be derailed by risks that range from soaring trade deficits and high energy prices to a slumping U.S. housing market.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke presided over talks with their counterparts from the world’s seven leading industrial countries – the United States, Japan, Germany, France, Britain, Canada and Italy.

The G-7 meetings were the prelude to discussions over the weekend among a broader group of finance ministers attending the spring meetings of the 185-nation International Monetary Fund and World Bank.

While those sessions were expected to focus on poverty relief and proposed changes to the operation of the IMF, all of the agenda items were being overshadowed by controversy over World Bank President Paul Wolfowitz and his involvement in a huge pay raise awarded to a close female friend.

The disclosures triggered calls for Wolfowitz to resign. The Bush administration signaled that it was standing by Wolfowitz, a former deputy defense secretary and one of the architects of Bush’s Iraq war strategy.

The finance discussions were occurring at a time when the global economy, according to the IMF’s new forecast, is expected to grow at a sizzling pace of 4.9 percent both this year and in 2008.

Growth in the United States, the world’s largest economy, is projected to slow to just 2.2 percent this year, the weakest showing since 2002, when the country was pulling out of a recession.

IMF economists warned that the prospects for global growth could be derailed if the slowdown in the United States becomes more severe or if other potential threats such as another spike in global oil prices or further financial market instability occurs.

In late February, stock markets around the world were rattled when investors became worried that rising mortgage delinquencies in the United States could worsen the U.S. housing slump.

U.S. officials, however, said they told their G-7 counterparts that the U.S. economy should be able to withstand the slowdown in housing, helped by low unemployment and continued solid job creation.

Deputy finance ministers from the G-7 countries were scheduled to meet on Sunday with representatives of leading hedge funds, the loosely regulated pools of capital favored by very wealthy individuals.

Those discussions are part of an effort being pushed by Germany to increase hedge fund transparency. The United States and some other G-7 countries have raised questions about the German proposal.

German Chancellor Angela Merkel wants to include improved hedge fund regulation on the agenda for this year’s leaders summit of G-8 countries taking place in Heiligendamm, Germany, in June. The G-8 includes the G-7 countries and Russia.

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On the Net:

Treasury Department: http://www.federalreserve.gov

IMF: http://www.imf.org

World Bank: http://www.worldbank.org

AP-ES-04-13-07 1725EDT