Daily Management Review

Ultra-Easy Policy for Growth Not The Answer For World Economy Say The G20


Ultra-Easy Policy for Growth Not The Answer For World Economy Say The G20
It was necessary to look beyond ultra-low interest rates and printing money to shake the global economy out of its torpor said the world's top economies declared on Saturday while renewing their focus on structural reform to spark activity.
A series of risks were flagged to world growth, including volatile capital flows, a sharp fall in commodity prices and the potential "shock" of a British exit from the EU in a communique from the Group of 20 (G20) finance ministers and central bankers.
"The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth. Monetary policies will continue to support economic activity and ensure price stability ... but monetary policy alone cannot lead to balanced growth," said the communique, issued at the end of a two-day meeting in Shanghai.
The statement noted concerns over escalating geopolitical tensions and Europe's refugee crisis adding that faltering growth and market turbulence have exacerbated policy frictions between major economies in recent months.
According a senior official who had seen various drafts, the reference to "Brexit" had not been included in earlier versions of the textbut was added after British officials pressed for it.
Britons will vote in June 23 referendum on whether to remain in the European Union.
"Our view is that it's in the national security and economic security of the United Kingdom, of Europe and of the United States for the United Kingdom to stay in the European Union," U.S. Treasury Secretary Jack Lew said after the meeting.
With the aim of reaching the group's economic goals, the G20 ministers agreed to use "all policy tools – monetary, fiscal and structural – individually and collectively".
Warning that without it there was a risk that the recovery could derail, Christine Lagarde, managing director of the International Monetary Fund, said she sensed renewed urgency among the group's members for collective action.
As some investors had been hoping after markets nosedived at the start of 2016, there was however no plan for specific coordinated stimulus spending to spark activity. Policymakers made clear the divergence of views on the way forward while he spoke over the course of the two-day meeting in Shanghai.
The communiqué draft said that the finance chiefs had agreed that "the magnitude of recent market volatility has not reflected the underlying fundamentals of the global economy".
The communiqué further stated that faster progress on structural reforms "should bolster potential growth in the medium term and make our economies more innovative, flexible and resilient" to pep up the global economy.
"We are committed to further enhancing the structural reform agenda," it added.
Issues like the use of negative interest rates by some central banks, such as in Japan and the reliance on debt to drive growth had saw divisions emerging among major economies.
The debt-financed growth model had reached its limits, said German Finance Minister Wolfgang Schaeuble while the country made it clear it was not keen on new stimulus.
"It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy," he said.

Science & Technology

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

Over 270,000 Account Globally Banned From Twitter For Promotion Of Terrorism

Device Capable Of Hearing The Inner Voice Developed By Researchers

New mobile technologies will warn about natural disasters

The brewing industry welcomes blockchain

Asset-Sharing App Of Ryder Is Meant For Commercial Vehicles

Credit Suisse: China will become the leader in AI sphere

Five new technologies that will change the world

World Politics

World & Politics

Debates over Google are heating as a new EU directive is about to be introduced

Will Merkel accept Macron's plans for Europe?

USA and China are pushing North Korea to denuclearization

Germany's dilemma: Will the atomic energy win?

A Forceful Response To Syria Attack Will Be Given By U.S.: Trump

Is Trump’s Maximum Pressure Tactic On North Korea Succeeding Because Of China?

Why are Turkey-EU relations moving back?

Record-Breaking $39 Million raised for Rare Cancer Research in 2018 by Cycle for Survival