Countries at an Asia-Pacific summit in Beijing pledged to pursue “flexible” fiscal policies to support the world economy and job creation, their finance ministers said in a joint statement on Wednesday.
Noting that current tepid global economic growth was not creating enough jobs around the world, the 21-member Asia-Pacific Economic Cooperation (APEC) bloc said they would advance structural reforms to unleash new sources of growth, Reuters reported.
“As the global economy still faces persistent weakness in demand, growth is uneven and remain below the pace necessary to generate needed jobs and downside risks have risen,” the statement said.
“We will continue to implement our fiscal policies flexibly, taking into account near-term economic conditions, so as to support economic growth and job creation, while ensuring fiscal sustainability,” it said.
APEC, which includes the United States, Japan, South Korea, Indonesia and Canada, groups countries which account for 40 percent of the world’s population, 54 percent of its economic output and 44 percent of trade.
US Deputy Treasury Secretary Sarah Bloom Raskin said in a separate statement that economic recovery in the United States had continued to strengthen and it was important for economies with the “space to do so” to take policy steps to boost demand.
“While there is still more work to do, the United States’ comprehensive response to the economic crisis has laid the foundation for strong growth,” Raskin said.
Exchange Rates
Wednesday’s APEC finance ministers’ meeting also reiterated a commitment to move towards market-determined exchange rates that are more flexible, reflect underlying fundamentals, and avoid persistent misalignment.
The APEC meeting came a day after data showed China’s economy, the world’s second largest, grew at its slowest rate in the third quarter since the 2008/09 global financial crisis, adding to worries that it was weighing on global growth.
Asia-Pacific economies need to recalibrate financial policies in the face of slowing global growth, Sarah Bloom Raskin said later.
“Global demand is slowing and it is going to be something that we as a group of countries are going to need to pay particular attention to,” Raskin said at a news conference following the final session of the preparatory meeting, also in Beijing.
The International Monetary Fund this month cut its forecast for global economic growth this year to 3.3 percent from 3.4 percent. Even so, the IMF now expects the US economy to grow 2.2 percent this year, up from its June forecast of 1.7 percent.
Emphasizing the importance of infrastructure to growth, the Asian Development Bank estimates that Asian countries need to spend $8 trillion on such projects between 2010 and 2020 to keep their economies humming.
