The decision “adds to the uncertainty” for the global economy, economic leaders from the world’s 20 largest economies said following the two-day summit in China.
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They will also call on all of the members of the G20 to put into action a strategy agreed last February to use monetary, fiscal and structural policies to boost confidence and growth without relying to heavily on cheap money from central banks.
Chancellor Philip Hammond said Brexit had come up “a great deal” at the G20.
Before the meeting the International Monetary Fund (IMF) downgraded its forecasts for global growth this year and next by 0.1 percentage point, to 3.1 percent and 3.4 percent respectively.
“Not only Brexit but various risks of low growth remain, and there was a lot of debate on the need of monitoring developments including terrorism, geopolitical risks and refugees”, said a Japanese finance ministry official.
“The recovery continues but remains weaker than desirable”.
Sunday’s statement promised to use “any and all policy instruments” to achieve “strong, sustainable, balanced and inclusive growth objectives”.
But Chad Bown, former World Bank economist and a senior fellow at the Peterson Institute economics think-tank, said policies needed to spread the benefits of growth more equitably will vary widely between countries, making it very hard to achieve.
U.S. Treasury Secretary Jack Lew stressed the importance of avoiding competitive currency devaluations in a meeting with Finance Minister Taro Aso in Chengdu, China, on Saturday, according to U.S. Treasury officials.
Lew said commitments by G20 members to refrain from competitive currency devaluations have helped sustain economic confidence, according to a USA statement summarising discussions between the two finance chiefs.
“This is a meeting of finance ministers and central bank governors and, as you would expect, they are very much focused on the economic challenges and the economic prizes available”.
Data out of Britain on Friday seemed to bear out fears, with a business activity index posted its biggest drop in its 20-year history. “The sooner the better so this generates a new equilibrium”, Italian Economy Minister Pier Carlo Padoan told Reuters.
German Finance Minister Wolfgang Schaeuble speaks at the G20 High-Level Tax Symposium in Chengdu, capital of southwest China’s Sichuan Province, July 23, 2016. “We say that not to put undue pressure on the British authorities but because I believe that is what everyone – all observers and the markets – need”.
Group of 20 host Beijing pushed hard to get structural reform high on the agenda at the meeting of finance ministers and central bankers from rich and developing nations that ended Sunday, hoping to use global support to fend off domestic opposition to reform. Hammond has said that he could ease the fiscal policy in the autumn if more help is needed. Markets are hypothesizing about an additional growth of the Bank of Japan’s enormous stimulus program at a July 28-29 policy evaluation, with the yen’s strength this year hitting exports and undermining efforts to escape deflation.
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“We will oppose all forms of protectionism”, the statement said.
