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

Scientists Discover Largest Ever Under Water Volcanic Eruption Near New Zealand

Bitcoin craze increased load on the power grid to the maximum

PC And Server Performance Slows Down Due To Security Patches For Chip Flaws, Says Microsoft

Cybersecurity Firm Claims Cryptocurrency Monero Might Be Getting Funneled To North Korea University

The Way We Travel Will Be Changed by The Colorless, Odorless Gas - Hydrogen

EU's Big Change In Data Protection Rules Makes Businesses To Get Ready For It

Artificial Intelligence Helps NASA Find An 8th Planet In Orbit Of A Distant Star

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

World Politics

World & Politics

2017 Was Second Warmest Year Since Records Were Kept And It Had No El Nino Effect

France and Germany want to reform the eurozone

Take and go away: new approach to refugees in Europe

Both The Korean Countries Will Come Together In Olympic Talks

Parties of Germany agreed on the migrants problem

Munich Re: Natural disasters caused record damage in 2017

High-Level Talks To Be Held Between North And South Korea In Over Two Years

Sexually Abusing Children Interests An Estimated 20,000 British Men, Shows Police Monitoring Of Chat Sites