MOSCOW, July 20 The Group of 20 nations put growth ahead of austerity in a joint communique on Saturday, seeking to nurture a global economic recovery in the face of volatile financial markets.
Following are key extracts on the economy from a joint G20 communique published on Saturday at the end of a two-day meeting of finance ministers and central bank governors in Moscow:
1. We, the G20 Finance Ministers and Central Bank Governors, met to review the current global economic conjuncture and discuss the required policies in preparation for our Leaders' summit in September.
2. Strengthening growth and creating jobs remain our priority and we are fully committed to taking decisive actions to return to a robust, job rich growth path.
3. The global economy remains too weak and its recovery is still fragile and uneven. Unemployment remains excessively high in many countries. There are signs of strengthening activity in the U.S. and Japan, the recession in the euro area continues even though there are signs of stabilization and growth in many emerging market economies continuing but at a slower pace. While our policy actions have contributed to contain downside risks, those still remain elevated with rising disparity in regional growth prospects. There has been an increase in financial market volatility and tightening of financial conditions.
4. To place the global economy on a stronger, more sustainable and more balanced growth path, we will intensify our policy actions and develop a comprehensive St Petersburg Action Plan. We agreed that our near term priority is to boost jobs and growth. We are committed to further reducing financial market fragmentation, moving ahead decisively with reforms towards a banking union in Europe, continuing monetary support where needed, calibrating the pace and composition of fiscal consolidation plans to economic conditions and fiscal space, continuing to implement or putting in place credible medium term fiscal strategies in advanced economies, rebalancing global demand, and taking measures to support growth, stability and resilience in emerging market economies. Equally important, we agreed that to strengthen our medium term growth potential, the St Petersburg Action Plan must include a comprehensive series of structural reforms that will increase productivity, labor force participation and employment. To this end, we have reviewed our structural reform agenda and agreed to address the gaps in our policy commitments with actions that clearly contribute to our collective objective of achieving strong, sustainable and balanced growth.
5. Achieving a stronger and sustainable recovery while ensuring fiscal sustainability in advanced economies remains critical. As agreed, progress is being made in developing credible, ambitious and country-specific medium term fiscal strategies for the St Petersburg Summit. These strategies will be sufficiently flexible to take into account near term economic conditions, so as to support economic growth and job creation while putting debt as a share of GDP on a sustainable path.
6. We are determined to accelerate progress toward rebalancing global demand, including internal rebalancing through structural reforms. This requires surplus economies to boost domestic sources of growth and deficit economies to increase national savings and enhance competitiveness. We reiterate our commitments to move more rapidly toward more market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments. We will refrain from competitive devaluation and will not target our exchange rates for competitive purposes. We will resist all forms of protectionism and keep our markets open.
7. Monetary policy should be directed toward domestic price stability and continue to support economic recovery according to the respective mandates of central banks. We recognize the support that has been provided to the global economy in recent years from accommodative monetary policies, including unconventional monetary policies. We remain mindful of the risks and unintended negative side effects of extended periods of monetary easing. Future changes to monetary policy settings will continue to be carefully calibrated and clearly communicated. We reiterate that excess volatility of financial flows and disorderly movements in exchange rates have adverse implications for economic and financial stability. Sound macroeconomic policies and strong prudential frameworks will help address potential volatility. We will continue to monitor financial market conditions carefully.