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G20 Vows to Boost Global Economic Growth by 1.8%

G20 Vows to Boost Global Economic Growth by 1.8%G20 Vows to Boost Global Economic Growth by 1.8%

The G20 finance summit ended Sunday in Cairns, Australia with a commitment to a 1.8 percent growth target designed to boost the world economy by $2 trillion.

The world's most powerful finance ministers announced plans to add 1.8 percent to their combined economic output, a move that will create millions of jobs, Xinhua reported Sunday.

Australian Treasurer Joe Hockey, who was chairing the G20 meeting, said the IMF and OECD have looked at over 900 measures put forward by countries, and estimated that these efforts could lift global GDP by 1.8 percent through to 2018.

"We want to create the environment for private sector-led growth, and provide our citizens with more jobs and better living standards," he said.

Hockey said investment in infrastructure was one of the core G20 growth strategies.

"We have focused on lifting investment in infrastructure because of its potential to address demand weakness. It is also a key driver for improving productivity," he said.

Initiative

"We have now agreed to progress a multi-year Global Infrastructure Initiative. This initiative consists of an integrated set of actions to increase quality infrastructure investment across the G20 and beyond.

"We have committed to developing a database of infrastructure projects to help match potential investors with projects."

Hockey said the G20 meeting agreed that monetary policy should continue to support the economic recovery, and that it should particularly address deflationary pressures where these are evident.

"Ministers and central bank governors are all too aware of the potential for a buildup in financial risks arising from prolonged, low interest rates," he said.

"All are committed to closely monitoring these risks and building even stronger economic policy frameworks, which are the ultimate defense against the damaging impact of renewed financial market volatility."

Hockey said the G20 was unified in its mission to modernize global tax rules and close gaps that have emerged in recent years.

These new tax rules are aimed at multi-national companies who are using legal loopholes to avoid paying tax.

Communique

In a communique they said preliminary analysis by the International Monetary Fund (IMF) and the Organization for Economic Cooperation Development (OECD) showed potential to deliver an extra 1.8 percent in "collective" Gross Domestic Product (GDP) through to 2018.

Referring to the planned summit of the 20 major world economies due in Brisbane in mid-November, they said they would "hold each other to account" in reaching goals.

Significant Progress

German Finance Minister Wolfgang Schauble said the G20 had come up with a broad consensus on ways to stabilize the world economy and ensure sustainable growth.

IMF chief Christine Lagarde said the announcement amounted to "significant progress" despite current geo-political tensions, such as those over Ukraine, which have arisen since ministers met in Sydney in February.

"Promoting economic policies that can contribute to a more robust and job-rich recovery is therefore critical at this stage," Lagarde added.

Earlier this week, the OECD downgraded its world growth forecasts amid a stalling eurozone recovery and weakening emerging economies.

 

Financialtribune.com