Bank of Canada head: higher growth goal should be seen as aspirational

Sat Feb 22, 2014 12:03am EST
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By Louise Egan

SYDNEY (Reuters) - Setting a higher goal for global growth is a good idea to try to build momentum in the world economy, but it should be seen as aspirational rather than a hard target, Bank of Canada Governor Stephen Poloz said on Saturday.

Poloz, in Sydney for a meeting Group of 20 finance ministers and central bank chiefs, also said he hoped the worst of the volatility that has hammered some major emerging markets this year had passed.

"What's emerging is a sense that this thing (global economy) isn't quite ticking over as rapidly as we'd hoped. So I think in that context it is good to develop, nurture a sense of common purpose, of aspiration, I think is a good term," he told Reuters.

Support seems to be growing among the world's top developed and emerging countries to adopt a target of lifting growth by 0.5 percentage points per year for five years, though there would not be targets for individual countries.

Another theme ahead of the Sydney meeting has been emerging markets' view that they have been sideswiped by volatility caused by the U.S. Federal Reserve's tapering of its stimulus, and their call for greater policy coordination.

"All things considered, I do think that emerging markets have managed it reasonably well," Poloz said.

"I'm hopeful that to the extent volatility reflects more perceptions than reality, that a lot of it has been washed through. That's my hope."

Poloz said some of the volatility, which hit hard economies including Brazil and Turkey, reflected domestic policy problems. Other officials from developed economies have taken a similar line this week.   Continued...

Bank of Canada Governor Stephen Poloz speaks during a news conference upon the release of the Monetary Policy Report in Ottawa January 22, 2014. REUTERS/Chris Wattie