Global economy would still pick up this year despite Covid-19, says G20
riyadh — Finance leaders of the world’s top 20 economies expect economic growth to pick up modestly this year and next thanks to loose monetary policy and an easing of trade tensions, and vowed to monitor the effects of the coronavirus outbreak.
The Group of 20 (G20) finance ministers and central bank heads faced a sober presentation by the International Monetary Fund (IMF), which predicted the epidemic would shave 0.1 percentage points off global growth.
“Global growth is expected to pick up modestly in 2020 and 2021. The recovery is supported by the continuation of accommodative financial conditions and some signs of easing trade tensions,” the communique from the financial leaders said. “We will enhance global risk monitoring, including of the recent outbreak of Covid-19. We stand ready to take further action to address these risks,” the statement said.
The deadly coronavirus epidemic could put an already fragile global economy recovery at risk, the IMF’s head said.
Global growth was poised for a modest rebound to 3.3 per cent this year, up from 2.9 per cent last year, IMF chief Kristalina Georgieva said at the meeting in the Saudi capital.
“The projected recovery... is fragile,” Georgieva said.
“The Covid-19 virus — a global health emergency — has disrupted economic activity in China and could put the recovery at risk,” she said in a statement. “I reported to the G20 that even in the case of rapid containment of the virus, growth in China and the rest of the world would be impacted.”
Finance officials from the G20 agreed to continue monitoring the risk from the coronavirus outbreak and to adopt appropriate policies to limit the global economic impact, Saudi Arabia’s Finance Minister Mohammed Al Jadaan said.
Digital tax: Race against time
Meanwhile, failure to reach a global deal on where and how much to tax digital giants like Google, Amazon or Facebook would result in many digital tax regimes emerging all over the world, France’s finance minister said on Sunday.
Speaking to Reuters, Bruno Le Maire said the gathering had been very useful in establishing consensus on such global tax rules.
“For the first time there is wide consensus among the G20 members on the necessity of having a new international taxation system,” he said. —