G-20 fi­nance chiefs split over ways to re­vive world econ­omy

The Pak Banker - - FRONT PAGE -

Global fi­nance chiefs split over how best to re­vive the world econ­omy, risk­ing dis­ap­point­ment for in­vestors seek­ing a co­or­di­nated cam­paign. Dif­fer­ences were laid bare on Fri­day as cen­tral bankers and fi­nance min­is­ters from the Group of 20 de­vel­oped and emerg­ing mar­kets gath­ered for talks in Shang­hai.

Calls for in­creased govern­ment spend­ing to lift de­mand, which have em­anated from the U.S. and China, ran into op­po­si­tion from Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble, who said us­ing debt to fund growth just leads to "zomb­i­fy­ing" economies. Bank of Eng­land Gov­er­nor Mark Car­ney voiced skep­ti­cism over neg­a­tive in­ter­est rates, which have now been adopted in con­ti­nen­tal Europe and Ja­pan, and the head of the In­ter­na­tional Mon­e­tary Fund also warned about di­min­ish­ing ef­fec­tive­ness of mon­e­tary poli­cies. While Ja­pan's fi­nance min­is­ter said the G-20 will reaf­firm a pledge to avoid com­pet­i­tive de­val­u­a­tions, the lack of agree­ment on fis­cal or mon­e­tary ini­tia­tives from the group risks dis­ap­point­ing in­vestors who have urged some co­or­di­nated ac­tion to ad­dress stock de­clines and weak prospects for growth. Of­fer­ing some so­lace was clear sig­nals from China that the host na­tion will im­ple­ment fis­cal and mon­e­tary eas­ing.

"The chances of the G-20 agree­ing to any­thing spe­cific, and us be­ing able to re­port on more than an elo­quent state­ment on Mon­day are ex­tremely slim," wrote Es­ther Re­ichelt, a for­eignex­change strate­gist at Com­merzbank AG in Frank­furt.

The G-20 meet over din­ner Fri­day, with a com­mu­nique ex­pected at the con­clu­sion of ses­sions on Satur­day. Stocks in Asia rose af­ter Chi­nese cen­tral bank Gov­er­nor Zhou Xiaochuan said in Shang­hai that his coun­try has room for fur­ther mon­e­tary ac­tions if needed. Fi­nance Min­is­ter Lou Ji­wei said China also has room to loosen fis­cal pol­icy.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.