G-20 sees global tension as risk to growth

Global finance chiefs are set to warn that the broadest and strongest economic expansion since the turn of the decade would be thrown into jeopardy if governments turn inward.

In the draft of a statement that finance ministers and central bankers will discuss during talks in Buenos Aires beginning Monday, the Group of 20 repeated a pledge to refrain from unfair trade practices.

How loyal they are to that commitment is up for question as US President Donald Trump risks sparking a global trade war by imposing tariffs on imported steel and aluminum. The draft made no mention of a united fight against protectionism.

Trump’s decision will likely dominate the G-20’s two days of discussions as foreign governments lobby for exemptions and threaten retaliation. Bloomberg Economics estimates a full-blown trade war could wipe $470 billion off global gross domestic product by 2020.

Geopolitical tensions and an unexpectedly swift end to easy credit were identified as other risks to the global upswing. The Organisation for Economic Cooperation and Development this week raised its forecasts to show the world economy growing 3.9 per cent this year and next.

The G-20 draft communique also promised members would avoid competitive devaluations and stressed the importance of international trade as an engine of growth.

It did sound alarm bells over crypto-assets by worrying they could enable tax evasion, money-laundering and terrorist financing. It suggested that they should be monitored with an eye to a possible multilateral response.