Sun, Apr 14, 2019 - Page 16 News List

G20 agrees on need for timely action


The G20 agreed on the need to take timely policy action to ensure that heightening risks do not prolong a global economic slowdown, Bank of Japan Governor Haruhiko Kuroda said on Friday.

While the global economy is likely to rebound in the latter half of this year, the risks of a further downturn were rising due to uncertainty over issues such as a US-China trade dispute, Kuroda said.

“There was a shared understanding among the G20 members that each country needs to take timely policy action,” Kuroda told a news conference after the end of a two-day meeting of G20 finance leaders and central bank chiefs in Washington.

“We need to be mindful of the risks to global growth. G20 countries must ensure they don’t take steps that heighten risks, and instead take steps to lessen them,” he said.

Japanese Minister of Finance Taro Aso also said that the balance of risks to the global economic outlook were skewed to the downside due to the possibility of escalating trade tensions and lingering political risks.

“We recognize the risk that growth prospects might deteriorate if weakening in key economies feed into each other, given the heightened uncertainties across the global economy,” Aso told the news conference.

Excessive global imbalances have posed risks to the global economy and need to be addressed multilaterally, rather than on a bilateral basis, Aso said.

As the chair country of this year’s G20 gatherings, Japan wants to deepen talks on global imbalances, an effort to divert Washington’s attention from bilateral trade imbalances and stave off US pressure to negotiate two-way trade deals.

The G20 countries did not issue a communique after their gathering, which was held on the sidelines of the IMF and World Bank spring meetings.

German Federal Minister of Finance Olaf Scholz, speaking at an event on the sidelines of the meetings in Washington, said the rules-based order of multilateralism is increasingly under threat and leaders must uphold international cooperation.

Scholz called on the US to overcome trade differences with Europe, which erupted again this week when US President Donald Trump threatened to impose tariffs on US$11 billion of EU products, including commercial aircraft.

“I believe this is a matter of principle; it’s not just about achieving some short-term economic gain. It’s not about the art of the deal,” Scholz said in reference to Trump’s best-selling business advice book.

Scholz’s consternation is understandable given that the global downshift in growth is most evident at the moment in Europe, where the outlook has been further clouded by the uncertainty over Britain’s departure from the EU.

An internal European Central Bank model presented to policymakers on Wednesday indicates that eurozone growth was just above 0.2 percent in the first three months of the year and could be somewhat weaker in the second quarter, two sources told reporters on Friday.

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