World Economy

G7 Will Use “Policy Mix” to Achieve Balanced Growth

G7 Will Use “Policy Mix” to Achieve Balanced Growth G7 Will Use “Policy Mix” to Achieve Balanced Growth

The leaders of the G7 group have said the world economy is an urgent priority and cautioned that a British vote to leave the European Union would seriously threaten global growth.

In a statement following a two-day summit in the Japanese resort of Ise-Shima, the world's seven leading industrial nations pledged to "collectively tackle" major risks to global growth and committed to a cooperative approach in beefing up policies to stimulate their sluggish economies, Aljazeera reported.

"Global growth remains moderate and below potential, while risks of weak growth persist," the G7 leaders said in their final 32-page declaration on Friday.

"Taking into account country-specific circumstances, we commit to strengthening our economic policy responses in a cooperative manner and to employing a more forceful and balanced policy mix, in order to swiftly achieve a strong, sustainable and balanced growth pattern," the G7 statement said.

Last month, the International Monetary Fund cut its global economic growth outlook for this year to 3.2%, compared with a forecast of 3.4% in January.

For 2017, the IMF said the global economy would grow 3.5%, down 0.1 percentage point from its January projection.

The leaders also committed to avoiding "competitive devaluation" of their currencies, while warning against wild exchange-rate moves, DW reported.

This represents a compromise between Tokyo, which has threatened to intervene to block sharp rises in its yen currency, and Washington, which generally opposes market intervention.

Brexit a Disaster

The G7—made up of Britain, Germany, Canada, France, Italy, Japan and the United States—also warned that a British secession from the EU in next month's referendum could have disastrous economic consequences.

"A UK exit from the EU would reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth," they said.

The comments highlight international concern over the possibility of so-called Brexit, as UK voters prepare for a June 23 referendum to decide whether to leave the 28-country bloc.

"This summit is sending the signal that all of us hope that Great Britain remains a member of the European Union," German Chancellor Angela Merkel said.

South China Sea

Rising maritime tensions in Asia are a cause for concern and disputes should be resolved legally and peacefully, the leaders said, PTI reported.

Though no individual countries were mentioned, the contents of the declaration appeared to be directed at China.

Beijing's claim to nearly the entire South China Sea has angered some of its Southeast Asian neighbors and sparked fears over threats to freedom of navigation in the body of water that encompasses key global shipping lanes.

The Philippines, along with Brunei, Malaysia and Vietnam also have competing claims in the expansive maritime area.

"We are concerned about the situation in the East and South China Seas, and emphasize the fundamental importance of peaceful management and settlement of disputes," G7 leaders said.

Tackling Steel Glut

G7 leaders pledged to tackle a global glut in steel, though their statement did not single out China, which produces half of the world's steel and is blamed by many countries for flooding markets with cheap steel, Reuters reported.

China insists that its steel exports do not violate trade rules nor are its policies designed to encourage mills to sell overseas. It also says it has sought to reduce tax rebates on exported steel.

But with steel mills from Australia to Britain under threat of closure, pressure is mounting on Beijing to cut capacity after output hit a record high earlier this year.

"We recognize the negative impact of global excess capacity across industrial sectors, especially steel, on our economies, trade and workers," said the statement.

"We are committed to moving quickly in taking steps to address this issue by enhancing market function, including through coordinated actions that identify and seek to eliminate ... subsidies and support," it added.

Challenge of Immigration  

Separately, the G7 called large-scale immigration and migration a major challenge. It pledged to increase global aid for the immediate and long-term needs of refugees and displaced people.

"The G7 recognizes the ongoing large-scale movements of migrants and refugees as a global challenge which requires a global response," the leaders said.

They said they would "commit to increase global assistance to meet immediate and longer-term needs of refugees ... as well as their host communities".