G20 leaders have agreed to boost their economies by a collective 2.1 percent by 2018 and said they will establish a global infrastructure hub to help reignite patchy world growth.
Citing risks to growth from financial markets and geopolitical tensions, the leaders said the development of the global economy is constrained by a lack of demand, according to a communique they issued after a two-day summit in Brisbane, Australia.
The leaders also supported decisive action to solve the problem of climate change, even after host Australian Prime Minister Tony Abbott sought to keep the meeting’s focus on growth and job creation.
“The global recovery is slow, uneven and not delivering the jobs needed,” the leaders said in the communique.
“We commit to work in partnership to lift growth, boost economic resilience and strengthen global institutions,” the communique said.
Collective action to boost growth comes as policies around the world are diverging, with the US tapering its monetary easing, while Europe and Japan add further stimulus to ward off deflation. The IMF last month cut its projection for world economic growth next year to 3.8 percent.
“Our monetary authorities have committed to support the recovery and address deflationary pressures when needed,” the G20 leaders said. “We will be mindful of the global impacts of our policies and cooperate to manage spillovers. We stand ready to use all policy levers to underpin confidence and the recovery.”
The group’s strategies to boost growth include measures to encourage trade by lowering costs, streamlining customs and reducing regulation, according to the communique.
“Lifting growth is hard and targeting specific numbers is even harder,” Richard Holden, a professor of economics at the University of New South Wales’ Business School, said ahead of the communique.
“More free-trade agreements and continued lowering of trade barriers is [are] both tangible and very important,” Holden said.
The G20 agreed to establish a global infrastructure hub based in Sydney with a mandate of four years that would encourage the exchange of information among governments, the private sector, development banks and other international organizations, according to the communique.
IMF reform to give emerging economies more equal representation remains a priority and leaders are “deeply disappointed” with delays in implementing changes agreed in 2010, according to the communique.
The group urged the US to ratify the changes and said that if that does not happen by the end of the year, it would ask the fund to provide other options, according to the communique.
Leaders of the BRICS nations — Brazil, Russia, India, China and South Africa — on Saturday said delays in the IMF reform are “unjustifiable” and urged the G20 to consider alternatives.
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