G20 summit this year to contribute to global economic governance
As the world economy continues to face new and tough challenges in 2016, experts envision this year’s G20 summit, scheduled for September in Hangzhou, China, will play a key role in boosting world economic growth and improving global economic governance.
WORLD ECONOMY FACES CHALLENGES
The super easy monetary policies implemented in some Western countries in recent years have stagnated their reforms and stalled their economic growth. Italy, one of the G20 members, is plagued this year by new and old problems, such as a sluggish growth, heavy debt, high unemployment, and a severe crisis in the banking sector.
Currently, Italy’s debt totals US2.63trillion (F$5.45tr), and its unemployment rate rose to 12 per cent last year from 8.4 per cent in 2010. Meanwhile, Britain’s and Germany’s economic growth are hampered by their domestic political or social problems. Britain will hold a referendum to decide whether it will remain within the European Union (EU) or not; the uncertain outcome of the referendum undermines confidence in Britain’s, and even Europe’s, economic growth. And the refugee crisis has become the toughest problem facing Germany’s economic growth, and analysts say that Germany’s economic growth would suffer a further setback if the problem is not tackled properly. The economy of the United States, a key member of the G20, is recovering, but this does not benefit all Americans. Ordinary Americans’ incomes have been dropping and the wealth gap in the country is widening further.
According to statistics, real incomes of US households have slid over the past 15 years, and the labor force participation rate has reached record lows over the past decades. A sustainable growth of the U.S. economy, experts say, is not guaranteed. Meanwhile, some developing members in the G20 are seeing a reduction in imports and a shrinking manufacturing sector, because of historical factors or economic slowdowns in developed countries. And the depreciation pressure on their currencies is mounting amid an anticipated interest rate hike by the US Federal Reserve. For example, Argentina is facing a depreciation pressure as its foreign reserves slump due to sliding commodity prices on the market. Argentina is also experiencing an increasing fiscal deficit and swelling inflation because of its expansive fiscal policies and money supply. Xinhua