G20 leaders meet in China this week
BEIJING: G20 leaders will meet in China this weekend in a climate of economic uncertainty and sluggish global growth – but the absence of an urgent crisis means the forum will be short on breakthroughs, analysts say.
summit in Washington, when countries coordinated a response has set a modest agenda for the Hangzhou gathering – focusing on making the world economy “innovative, invigorated, interconnected, and inclusive”.
needs diverge – the US is mulling a rate hike, Japan is toying with fresh easing, Germany is skeptical of fiscal stimulus, Chinese overcapacity remains huge, and action are dim.
not a lot of common overlap professor of economics at Peking told AFP.
The G20 is made up of the and emerging economies, which together account for 85 percent of and two-thirds of its population.
the credibility of future promises.
Compliance with vows made in 2015 has fallen to a low of 63 percent, according to analysis by the University of Toronto.
Disappointing growth
“Ongoing economic malaise has been accompanied by the unwillingness of G20 members to sustain their commitment to the structural reforms needed to meet the growth pledge,” said Tristram Sainsbury and Hannah Wurf of the G20 Institute in a report.
Despite repeated promises to strong, sustainable, balanced growth, members are “not achieving any of those three terms”, Sainsbury told AFP.
Every year since 2011 the IMF has revised downwards its economic forecasts made at the beginning of the year as hopes for recovery have disappointed.
This summer it again cut its forecast for global growth in 2016 to 3.1 percent.
It is a far cry from the sunny Plan two years ago, when G20 leaders set a goal of lifting collective GDP an extra 2.1 percent beyond baseline IMF predictions by 2018.
doing so would add $ 2 trillion world economy.
“The best way to think of the forum is a dinner party that happens to include leaders of 85 percent of the world economy around the table making pledges,” said Sainsbury.
“People can go and make statements, but then they go home, enforcing a commitment.”
was useful, he added, as it provides a platform for leaders to coordinate financial policies, bolster market confidence, and reach agreements on matters such as tax havens.
“What we often say is, if the G20 to invent it.”
Introspection
has seen some areas of agreement, in February helping bring a measure of stability to volatile markets that were hit by concerns about - tion of its yuan currency.
While global growth remains - term agreements on lower- key matters at the G20 that support its domestic goals.
Among them are financing its campaign for wider use of the Special Drawing Rights ( SDR) basket, which includes the yuan.
There could also be a push for and infrastructure spending, ana expanding trade and building ports and highways in foreign countries, often using Chinese
Since 2008 the grouping has promised to halt and roll back protectionist measures, but a WTO study found that earlier this year G20 members were adding more than 20 restrictive policies per month.
“Around the world you see an obvious global movement towards - tality, call it xenophobia if you will,” said Andrew Polk, China economist for Medley Global Advisors. “It makes it harder for these international forums, especially on trade.”