The Group of 20 major economies, including India, today vowed to deploy all policy tools to foster confidence and boost global environment for growth, which they said was “challenging” and uncertain after UK’s decision to exit the world’s largest single market, the EU. The spectre of protectionism, highlighted by U.S. Republican presidential candidate Donald Trump’s “America First” rhetoric and talk of reworking or quitting trade agreements, will also hang over the meeting.
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At a family photo on Sunday, Hammond was seated in the front row, but spent most of the event conversing only with one of his neighbours, World Bank president Jim Yong Kim. Japan is in the midst of compiling an extra budget, with calls from some lawmakers for support for lower-income households. “There is now broad consensus that what the global economy needs is growth – not austerity – and the discussions here have focused on how best to achieve that outcome”. The need for inclusive growth was given prominence in the second paragraph of the G20 communique.
But participants said Brexit was at the forefront of concerns at the meeting in Chengdu, the last before the G20 summit in September. “Further trade liberalization is also crucial to bolster productivity and global growth, while taking steps to ensure the gains from trade are shared widely”.
“The Chinese renminbi is moving a little bit over time but I don’t think it’s really something that.bugs G20 policymakers at the moment”, said Frederic Neumann, Co-Head Of Asian Economic Research at HSBC in Hong Kong. Many countries are anxious that a long delay could add to uncertainties that are dragging on the world economy.
However, new figures on United Kingdom companies in the three months to the end of June have raised concerns about the health of the economy before the Brexit vote. Canada is adding C$11 billion (RM34 billion) in annual spending for the fiscal year that began April 1 and will run deficits totalling nearly C$120 billion over six years.
Although he is little known to many other finance ministers, Hammond is no stranger to worldwide gatherings, having served as Britain’s defence and transport minister as well as its foreign minister for the past two years.
“All forms of protectionism” will be resisted, the G20 said.
The British vote “increased global economic uncertainty”, said a joint statement by the officials, who were meeting in Chengdu in western China.
” Not only Brexit but different dangers of low growth stay, and there was a great deal of dispute on the need of monitoring advancements including terrorism, geopolitical dangers and refugees”, stated a Japanese financing ministry official.
Following the meeting in the Chinese city of Chengdu, the G20 group said it had the tools to cope with the potential economic and financial consequences from the referendum result.
Christine Lagarde, managing director of the International Monetary Fund, stressed the role that structural reform can play amid rising political uncertainty from the Brexit vote and continued financial market volatility.
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“This will help us objectively measure the overall economic and social effects of the reforms in each country”.
