Business

G20 aspires to faster growth on sketchy roadmap

Wayne Cole and Jane Wardell

The world's top economies have adopted several soft targets, signalling optimism that the worst of crisis-era austerity has finally passed.

Australia Treasurer Joe Hockey speaks during a press conference at the G20 Finance Ministers and Central Bank Governors meeting in Sydney. (AFP)

The final communique from the two-day meeting of Group 20 finance ministers and central bankers in Sydney said they would aim to boost collective growth by "more than 2%", a G20 official said, speaking on condition of anonymity.

It included a pledge to take concrete action to increase investment and employment, among other reforms, the source said. The group accounts for around 85% of the global economy.

There was a nod to concerns by emerging nations that the Federal Reserve consider the impact of its policy tapering, with the communique saying central banks would be mindful of the effects on the global economy.

The G20 communique also stated that it "deeply regrets" that progress on giving emerging nations more say in the International Monetary Fund had stalled, the source said.

Major emerging powers including India, China, Brazil and Russia, have long lobbied for increased voting power in the IMF to reflect their growing share of the world economy, but the changes have been blocked by the US.

The two-day meeting ends on Sunday with a round of news conferences by top officials, including European Central Bank President Mario Draghi and IMF Managing Director Christine Lagarde.

The growth plan borrows wholesale from an IMF paper prepared for the G20 meeting, which estimated that structural reforms would raise world growth by about 0.5 percentage points per year over the next five years, boosting global output by $2.25-trillion.

The IMF has forecast global growth of 3.75% for this year and 4% in 2015.

The target remains vague at the moment, with no road map on how nations intend to get there or repercussions if they never arrive. The aim was to come up with the goal now, then have each country develop an action plan and a growth strategy for delivery at a November summit of G20 leaders in Brisbane.

Agreeing on any goal is a step forward for the group that has failed in the past to agree on fiscal and current account targets. And it was a sea change from recent meetings where the debate was still on where their focus should lie: on growth or budget austerity.

It was also something of a feather in the cap of Australian Treasurer Joe Hockey, who spearheaded the push for growth in the face of some scepticism, notably from Germany.

Australia is acting as president of the G20 this year, following Russia in 2013 and ahead of Turkey next year. – Reuters

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