BELEK: The heads of the world’s 20 largest economies pledged to use all of their policy tools to tackle uneven economic growth that falls short of expectations, according to a draft Group of 20 (G20) communique.
As the G20 leaders gathered in Turkey for a two-day meeting on how to boost global growth, the economic discussions were overshadowed by deadly attacks in Paris.
In a nod to uncertainty in financial markets and worries about lagging output in much of the world, the leaders said they would stick to a target to boost the G20’s collective economic output by an additional 2 percent by 2018. “Global economic growth is uneven and falls short of our expectations, despite the positive outlook in some major economies,” they said in the draft document, the final version of which is due to be released today. “A shortfall in global demand and structural problems continue to weigh on actual and potential growth.”
The global economy remains very much a mixed bag for investors, with the United States looking like it may hike interest rates for the first time since 2006 next month, while much of the rest of the world, including China, remains vulnerable.
In language likely aimed at the US Fed hike, the leaders highlighted the need to “carefully calibrate” and clearly communicate policy decisions, to make sure markets are not taken by surprise by such key decisions.
The leaders endorsed a package of measures to tackle corporate tax avoidance, although questions remain about whether countries will follow through on the plans or leave loopholes multinationals can exploit. The Base Erosion and Profit Shifting measures aim to close the gaps in existing international tax rules. They were triggered by public anger over reports the huge multinational corporations like Starbucks or Google, get away with paying almost no tax at all because the skilfully exploit legal loopholes, or get preferential tax deals from governments.
Reuters
