IMF's Lagarde, G20 finance VIPs urge action on reforms

SHANGHAI - Officials at a global finance meeting Friday in Shanghai urged governments to speed up promised job-creating reforms instead of relying on stimulus to perk up slackening growth.

See Full Article

Governments have tried to squelch expectations the Group of 20 gathering of finance ministers and central bankers from the United States, China, Japan, Germany and other major rich and emerging economies will produce specific growth plans. But they face pressure to reassure nervous financial markets.

Christine Lagarde, the managing director of the International Monetary Fund, said governments should act faster on reforms promised at a G-20 meeting in 2014. That list included some 800 commitments meant to simplify regulations and boost trade, investment and technology development, but many have yet to be carried out.

"Policymakers do not need to invent yet another trick, but they need to deliver steadily on the commitments they have made," Lagarde said at an event organized by the Washington-based Institute of International Finance alongside the Shanghai meeting.

Referring to monetary and fiscal policy and structural reforms, Lagarde said, "There has to be action on all fronts."

Others at the meeting include U.S. Treasury Secretary Jacob Lew and Federal Reserve Chairwoman Janet Yellen; China's finance minister, Lou Jiwei, and central bank governor, Zhou Xiaochuan; Mario Draghi of the European Central Bank and their counterparts from Europe, South Korea, India and South Africa.

Global growth is at its lowest in two years and forecasters say the danger of recession is rising. The IMF cut this year's global growth forecast by 0.2 percentage points last month to 3.4 per cent. It said another downgrade is likely in April.

Central banks still have room to use interest rate cuts and other stimulus but need governments to follow through with promised economic changes, said Mark Carney, head of the Bank of England.

"Global growth has disappointed because the innovation and ambition of global monetary policy has not been matched by structural measures," said Carney at the IIF event. "In most advanced economies, difficult structural reforms have been deferred."

Germany's finance minister, Wolfgang Schauble, said fiscal stimulus has "reached its limit" and his government will not agree to more co-ordinated spending in the event of further deterioration in the global economy. He urged other countries to deliver on reforms instead.

"We are not lacking in policy proposals," he said. "We are lacking in policy implementation."

Also Friday, China's central bank chief promised to avoid weakening its yuan to boost sagging exports as he tried to reassure nervous financial markets about his government's handling of its economy and currency.

The Chinese hosts hoped to use the meeting to promote their campaign for a bigger voice in managing global trade and finance. Instead, the communist government is scrambling to defend its reputation for economic competence following stock market and currency turmoil.

A key worry, despite repeated Chinese denials, is that Beijing will allow its yuan to decline to support struggling exporters. That expectation has driven an outflow of capital from China that spiked to a record $135 billion in December.

"We will not resort to competitive depreciation to boost our advantage in exports," said Zhou Xiaochuan, governor of the People's Bank of China, at a news conference.

Zhou said the meeting should focus on global demand, economic reforms and promoting "sustainable and balanced" growth.

The foreign view of China's economic health was shaken last year by a stock market collapse that wiped out $5 trillion in paper wealth. Its main market index fell by an unusually large daily margin of 6.4 per cent on Thursday but gained almost 1 per cent on Friday.

At the G-20 opening ceremony, Zhou tried to reassure his audience the Chinese economy is robust after growth slowed to a 25-year low of 7.3 per cent last year. He noted that it still was among the world's strongest performances.

"China's economic fundamentals remain strong and supportive of growth," he said. "The Chinese economy will continue to grow at a moderate-to-high pace."

-----

AP Business Writer Joe McDonald and researcher Dong Tongjian in Beijing and AP Writer Erika Kinetz in Shanghai contributed.



Advertisements

Latest Economic News

  • Bombardier may lay off hundreds at its Quebec railway plant if no orders come in

    Economic CBC News
    The railway division of Bombardier Inc. says losing out on a large electric train contract in Montreal may force it to lay off workers this fall at its plant in La Pocatiere, Que., unless it wins some new contracts. Source
  • B.C. launches challenges of Alberta's ban on wine

    Economic CTV News
    VANCOUVER - The British Columbia government has launched a formal challenge against Alberta's ban on its wines. B.C. says it has notified Alberta that it is formally requesting consultations under the Canadian free trade agreement's dispute settlement process. Source
  • Bombardier may lay off hundreds at its Quebec railway plant

    Economic CTV News
    MONTREAL -- The railway division of Bombardier Inc. says losing out on a large electric train contract in Montreal may force it to lay off workers this fall at its plant in La Pocatiere, Que. Source
  • Feathers fly as chicken shortage shuts KFCs across Britain

    Economic CTV News
    LONDON - Fast-food chain KFC has been forced to close most of its 900 outlets in Britain and Ireland because of a shortage of chicken The company is blaming "teething problems" with its new delivery partner, DHL. Source
  • N.L. unveils 12-year plan for offshore oil, gas development

    Economic CTV News
    ST. JOHN'S, N.L. -- Cash-strapped Newfoundland and Labrador has announced a 12-year plan to speed and enhance development of its offshore oil and gas resources. The province will review regulations and advance tie-back technology to allow more extraction at existing sites with less cost. Source
  • N.L. unveils plan to double oil production by 2030

    Economic CBC News
    The Newfoundland and Labrador government launched a new plan on Monday for growing its oil and gas sector. Highlights of Advance 2030 include doubling offshore oil production by 2030 through reducing development time for projects. Targets for the plan include drilling more than 100 new exploration wells, and tapping into multiple basins to produce more than 650,000 barrels of oil per day from new and existing projects, as well as commercial natural gas production. Source
  • Your auto insurance will be cheaper if you sign up in this month: LowestRates.ca

    Economic CTV News
    Your auto insurance rate is cheaper if you sign up when the weather is warm. That’s the key takeaway from a two-year price analysis by LowestRates.ca. The financial product comparison website found that rates quoted in Ontario were at their lowest between July and October, dipping by as much as six per cent in August 2017 from the annual average. Source
  • Canadian lumber producers buoyant about 2018 with high hopes for duties

    Economic CTV News
    MONTREAL - Softwood lumber duties aren't dampening the spirits of Canadian lumber producers as strong demand from rising U.S. housing starts and tight supply is expected to keep prices high throughout 2018. The number of U.S. Source
  • Markets rise as investors' jitters ease

    Economic CTV News
    SEOUL, Korea, Republic Of - Asian markets were higher on Monday following Wall Street gains last week, as investors' jitters showed signs of easing. Many major markets were closed on holidays. KEEPING SCORE: Japan's Nikkei 225 jumped 2 per cent to 22,149.21. Source
  • European shares drift lower as traders take a breather

    Economic CTV News
    LONDON -- European shares drifted lower Monday as investors paused for breath following a sizeable rally last week. Despite the move lower, there are few signs of the turmoil that gripped stock markets earlier this month. Source