JOHANNESBURG (Reuters) - Finance chiefs from the Group of 20 will try to draw up a plan for unwinding emergency economic stimulus packages introduced over the last year, U.S. Deputy Treasury Secretary Neal Wolin said on Wednesday.
“There will be a set of discussions about how we’re going to sequence all this as governments think about moving from a period of stress and so forth to a period that’s steadier and more regularized and as some of these extraordinary measures which the G20 countries took become less necessary,” he said.
“There’s still, though, a need in the U.S. and elsewhere -- and this will be another focus -- to continue to be pushing toward stimulus in the near term,” Wolin told reporters on the sidelines of a lecture in South Africa’s commercial capital.
The world’s largest economy has pulled out of its deepest recession since the Great Depression, with growth of 3.5 percent recorded in the third quarter, but rising unemployment threatens to undermine the nascent recovery.
On the final leg of a three country Africa trip, Wolin said the G20 would also try to hammer out plans for reform of the world financial system, including the role of the International Monetary Fund and a global financial “surveillance process.”
In a speech at Johannesburg’s Wits University, he said the U.S. deficit would decline as “our stimulus spending winds down over the next year,” but in a subsequent question and answer session declined to give a precise timeframe.
“First and foremost we want to concentrate on growth and getting quality growth in place,” he said. “Governments across the world will then have to turn to fiscal discipline and sustainable fiscal trajectories.”
“It’s something we think about a lot now. But exactly what the trajectory and what the timing will be of this, I think, is unclear because first we want to make sure we’ve accomplished our objectives in respect of the growth.”
“Whether that’s in three quarters, or four quarters or five quarters, or ‘x’ quarters, I don’t know,” he said.
In the speech, Wolin also stressed the importance of international cooperation and coordination in improving oversight of global financial markets.
“Even as we push for reform at home, it is critical that our efforts are matched by corresponding efforts around the world. If the United States acts alone -- indeed if any G20 nation acts on its own -- little will be achieved,” he said.
He also paid tribute to the G20 wealthy and emerging economies in tackling the crisis of the last year, implying Washington believes the Group of 7 (G7) wealthy countries is of waning significance.
“The shift toward the G20 reflects the critical importance of emerging economies like South Africa, India, Brazil and others,” he said. “To be credible and to be effective, global economic coordination in the 21st century must take place in a broad and inclusive forum.”