The Group of Twenty nations have pledged to accelerate efforts to revive growth, which remains "too weak" and "fragile," according to a concluding statement of G20 Finance Ministers and Central Bank Governors meeting in Moscow.
They also vowed to boost jobs by enhancing structural reforms and agreed to calibrate the pace of fiscal consolidation to economic conditions.
"We agreed that our near term priority is to boost jobs and growth," a communique from the July 19-20 meeting showed. The leaders said that they are committed to further "calibrating the pace and composition of fiscal consolidation plans to economic conditions and fiscal space."
"The global economy remains too weak and its recovery is still fragile and uneven. Unemployment remains excessively high in many countries," the meeting observed. "While our policy actions have contributed to contain downside risks, those still remain elevated," the finance chiefs noted.
They also pointed to an increase in financial market volatility and tightening of financial conditions.
While recognizing the support provided to the global economy by accommodative monetary policies, the G20 agreed that future changes to monetary policy settings will be "carefully calibrated" and "clearly communicated". The statement reflects the recent market sell off after US Federal Reserve last month announced its readiness to start unwinding of the Quantitative Easing program later this year.
The meeting vowed to continue to monitor financial market conditions carefully. The ministers noted that while there were signs of strengthening activity in the U.S. and Japan, the recession in the euro area continues even though there were signs of stabilization and growth in many emerging market economies continuing but at a slower pace.
The meeting also pledged to reduce financial market fragmentation, move ahead decisively with reforms towards a banking union in Europe, continue monetary support where needed, implement credible medium term fiscal strategies in advanced economies, and take measures to support growth, stability and resilience in emerging market economies.
G20 reiterated commitment to move "more rapidly toward more market-determined exchange rate systems and exchange rate flexibility" and agreed to refrain from competitive devaluation.
The meeting formally backed plans for tighter tax rules for the profits of foreign-controlled companies, as well as measures to counteract tax evasion in the rapid developing new forms of business, such as the digital economy.
In a statement on the G20 meeting, International Monetary Fund Managing Director Christine Lagarde urged countries to quickly ratify the measures necessary to implement this important agreement.
"I look forward to the G-20 Summit of Heads of State and Government in St. Petersburg in September that will review many of the key issues and challenges facing the global economy that we discussed today in Moscow," Lagarde said.
by RTT Staff Writer
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