The G-20 group of top world economies said that global economic expansion was slower than had been expected but expressed confidence that a recovery would gain momentum.
“Global growth falls short of our expectations. We have pledged to take decisive action to keep the economic recovery on track and we are confident the global economic recovery will gain speed,” finance ministers and central bank chiefs said in a draft communique after their two-day meeting in Ankara.
The group vowed to “carefully calibrate and clearly communicate our actions… to minimise negative spillovers, mitigate uncertainty and promote transparency” as key global economies search for robust growth.
The economic supremos also vowed to “refrain from competitive devaluations and resist all forms of protectionism,” following controversy over China’s unexpected devaluation of the yuan last month.
China’s move had rattled financial markets and also amplified concerns about its own economic slowdown and drastic loss in value of its stock market.
“We reiterate our commitment to move toward more market-determined exchange rate systems and exchange rate flexibility… and avoid persistent exchange rate misalignments,” it said.
The statement called on governments and central banks not to over use interest rates as a tool for boosting economic activity and instead implement fiscal policies to support growth and job creation.
“Overreliance on monetary policy will not lead to balanced growth,” said a copy of the communique obtained by AFP which still needs to be formally approved by the ministers.
The prospect of an interest rate hike by the US Federal Reserve has raised concerns in some emerging markets and the statement said the G20 noted “that in line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies.”
It said the G-20 remained committed to the implementation of growth strategies to support demand and lift potential growth, as well as taking steps to reduce income inequality.