Finance chiefs vow to bolster growth

Say they will stem risk of economic stagnation

ISTANBUL • Finance officials from the Group of 20 leading economies sketched an uncertain outlook for global growth on Tuesday and vowed to use monetary and fiscal policy if needed to stem any risk of stagnation.

The United States urged nations at the G20 meeting not to resort to currency devaluations to boost exports, an indication Washington is starting to feel wary of its allies manipulating their exchange rates to support growth.

U.S. Treasury Secretary Jack Lew signalled that Germany and others in Europe should engage in deficit spending, saying it would not be a “good ride” for the global economy if only the United States was strong.

“I’ve used the metaphor of a car that has one tire fully inflated, and the other three not so much. It’s not going to be a good ride for the global economy if the one strong wheel is the United States.”

The meeting of finance ministers and central bankers in Istanbul comes at a difficult time, with major economies running at different speeds, monetary policies di-

I’ve used the metaphor of a car that has one tire fully inflated

verging and Greece casting a new shadow over Europe.

The communiqué noted slow growth in the eurozone and Japan and said some emerging market economies were slowing down. It said the European Central Bank’s quantitative easing would further support recovery in the euro area.

A sharp decline in oil prices would also give some boost to global growth, it said.

The U.S. Federal Reserve looks set to raise interest rates this year, a stark contrast to huge money printing program by ECB and Bank of Japan.

A byproduct of that is the dollar being driven higher. There has generally been an acceptance in Washington that a weaker euro and yen is an inevitable consequence of actions to revive moribund economies, something the U.S. has consistently called for.

ECB governing council member Christian Noyer said he saw no sign of a currency war building and that the meeting had shown a common understanding of the need for monetary policy easing.

In the past there were suspicions of competitive devaluations but those suspicions were gone, Mr. Noyer, who is also governor of the Bank of France, told reporters.

“There is clear agreement by all of the G20 countries that monetary policies are taken for domestic reasons to try to meet price targets that are set for the central bank,” he said.