Wed | Jan 23, 2019

Finance ministers determined to sustain recovery

Published:Sunday | October 12, 2014 | 12:00 AM
Finance ministers and central bank governors of the Group of Twenty nations gather for photo at the International Monetary Fund and World Bank meetings in Washington, last Friday.-AP

WASHINGTON (AP):Finance ministers from the world's largest economies conveyed their determination yesterday to pursue policies that will prevent a slide into another global recession but at the same time expressed frustration that not all nations were pursuing the correct approaches.

Speaking to the policy-setting panel of the 188-nation International Monetary Fund (IMF), British Chancellor of the Exchequer George Osborne took note of the recent downgrades to global growth forecasts and said there was a need, "for further progress by policymakers to deliver a strong and sustainable global recovery."

Brazil's finance minister, Guido Mantega, told the IMF group that the global recovery "continues to create a sense of disillusionment". He said the IMF had demonstrated, "an entrenched propensity to overstate prospects" for growth in the world's largest economies.

Governments failing

In his remarks, United States Treasury Secretary Jacob Lew pointedly complained that governments in Europe, Japan and China were failing to deliver needed support.

"European leaders should focus on recalibrating policies to address persistent demand weakness," Lew said.

He said Japan's outlook was uncertain with growth projected to remain weak this year and next, and the country should "move decisively to implement requisite growth-boosting structural reforms".

Lew did not mention Germany by name, but it was clear that his remarks on Europe focused on that nation's reluctance to do more to stimulate growth. "Countries with external surpluses and fiscal flexibility" needed to do more to boost growth, he said. Germany, Europe's largest economy, ran a large trade surplus last year.

Even some of Germany's European partners have said countries in the 18-nation Eurozone should shift away from the deficit-cutting policies Germany has championed and boost investment spending to avoid being stuck in Japanese- style stagnation.

It was against that background that G-20 finance ministers and central bank presidents met for two days of talks that wrapped up last Friday in advance of the IMF-World Bank meetings.

After those discussions, the ministers unveiled plans for a global initiative to build roads, ports, railways and other infrastructure projects to help boost world growth by $2 trillion over the next five years and create millions of jobs.