G20 worried by 'modest' global growth, commodities weakness

Fri Apr 15, 2016 7:41pm EDT
 
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By David Lawder and Jason Lange

WASHINGTON (Reuters) - Financial leaders from the Group of 20 nations said on Friday they were heartened by a recent recovery in financial markets, but warned that global growth was "modest and uneven" and threatened by weakness in commodities-based economies.

In a communique issued after their meeting in Washington, G20 finance ministers and central bank governors repeated their pledge to refrain from competitive currency devaluations, but offered no new initiatives to keep growth from stalling.

The G20 officials took a slightly more positive view on financial markets, which they said had mostly recovered from sharp selloffs earlier this year and were in better shape since they last met in Shanghai in February.

"However, growth remains modest and uneven, and downside risks and uncertainties to the global outlook persist against the backdrop of continued financial volatility, challenges faced by commodity exporters and low inflation," they said.

The communique also pointed to Britain's possible exit from the European Union, geopolitical conflicts, terrorism and refugee flows as complications for the global economic landscape.

The statement repeated G20 pledges to "use fiscal policy flexibly" to strengthen growth, job creation and confidence. It kept language that member countries "will continue to explore policy options," adding that they would be "tailored to country circumstances."

"There's not a one-size-fits-all answer" to boost growth, U.S. Treasury Secretary Jack Lew told a news conference, adding that each country needed to decide for itself how best to apply structural reforms, monetary policy and fiscal spending.

But he emphasized that it was important for Japan and China to pursue structural reforms - China to reduce excess industrial capacity and Japan to reform agriculture and other key sectors. Both of these would require some social spending to support displaced workers, Lew added.   Continued...

 
International Monetary Fund Managing Director Christine Lagarde participates in a news conference during the spring meetings of the IMF and the World Bank in Washington April 14, 2016. REUTERS/Joshua Roberts