G20 predicts modest growth in 2012

Monday, February 27, 2012

Mexican City - Finance ministers and central bank governors of the Group of 20 (G20) nations expect modest growth this year as downside risks continue to threaten the global economy.

While the world economy is slowly recovering, uncertainties remain with volatile international financial markets, soaring oil prices and high unemployment rates in many countries, they cautioned in a communiqu, issued on Sunday after wrapping up a two-day meeting held in Mexico.

"The international economic environment has continued to be characterised by an uneven performance, with weak growth in advanced economies and a stronger, albeit slowing, expansion in emerging markets," said the document.

"Structural problems, insufficient global rebalancing, a persistent development gap and high levels of public and private indebtedness and uncertainty continue weighing on medium-term global growth prospects."

The communiqu, calls for implementing the Cannes Action Plan for growth and jobs and supervise each country's implementation process of policies concerning finance, currency and exchange rate. A similar document would be developed in Los Cabos where the G20 heads of state are scheduled to meet in June, it said.

Encouraged by the progress made in addressing the European debt crisis, participants said the international community should ensure the International Monetary Fund (IMF) has enough resources and the Eurozone nations should do more to build its firewall and promote structural reforms.

The meeting also called for a speedy implementation of IMF's 2010 quota reform plan, which would not only shift more quotas to the emerging economies, but also enhance their representation inside the IMF.

Headed by Chinese central bank governor Zhou Xiaochuan, the Chinese delegation said G20 members should put maintaining financial market stability and promoting economic recovery and growth right on top of their agenda.

All G20 parities should also work hard to solve global economic problems, including the Eurozone debt crisis, rising oil prices and unrestricted flow of capital, according to the Chinese delegation.