G20 deputies to discuss inflation, market threats
WASHINGTON, Aug 29 (Reuters) - Rising inflation and lingering financial market turmoil will be under the spotlight at a meeting of Group of 20 officials in Brazil this weekend to prepare for a G20 meeting of finance ministers in November.
The meeting of so-called finance ministry and central bank "deputies" from the G20 industrial and emerging economies, will assess the state of the global economy as the sharp U.S. economic slowdown spills into other regions and inflation hits record levels in some countries, posing tough policy choices.
According to an agenda of the closed Aug. 30-31 meeting obtained by Reuters, the International Monetary Fund's No. 2 official, John Lipsky, will provide an update on the IMF's outlook for the global economy on Saturday.
A G20 finance official told Reuters earlier this week that the IMF, in a note prepared for the meeting, said it had further shaved its forecast for global economic growth for 2008 and 2009 from projections released last month. It cut its 2008 forecast to 3.9 percent from 4.1 percent, and said the world economy was likely to expand 3.7 percent next year, down from 3.9 percent.
U.S. Assistant Treasury Secretary Clay Lowery will speak at a session on the crisis in global financial markets sparked by rising U.S. mortgage defaults.
Financial market uncertainty has remained high as investors have questioned whether U.S. mortgage titans Fannie Mae (FNM.N) and Freddie Mac (FRE.N) can survive. Last month, the U.S. Treasury won authority to step in with a government lifeline for the two companies if it deems one needed.
An official from the European Central Bank will also address the meeting on the current economic situation. ECB officials are concerned about the rapidly cooling euro zone economy but see inflation dangers as too high to justify cutting rates.
A Russian official is slated to speak for emerging economies, where growth is easing but inflation is a larger worry.
On Friday, India said its economy grew at the slowest pace in 3-1/2 years in the June quarter as the government grapples with inflation of above 12 percent. India and China have led global growth over the past several years.
Officials will also look closely at how to improve the effectiveness of the G20, the only global economic forum that brings together the industrial and developing world, including key emerging economies like China, India, Brazil and Russia.
Clean energy and the role of climate change in global markets is on the agenda for Sunday, as investments in "green" technologies increase amid fears of soaring commodity prices, dwindling supplies of traditional energy and climate change create new investment opportunities. (Editing by Andrea Ricci)
