G20 to work on global growth commitment this weekend
Saturday, February 22, 2014
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Some early statements have been released ahead of this weekend's G20 meetings between finance ministers and central bank presidents of the world's top economies.
In response to the angst expressed by emerging market leaders, the world's wealthiest nations said they had to get their own houses in order and work on the agenda of boosting global growth, according to Reuters. Some emerging market leaders had complained about the spillover effects of their monetary polices.
The current G20 summit follows massive capital flight from countries like India, South Africa, and Turkey earlier this year, which forced central banks in those countries to hike interest rates. Emerging market economies are looking for a commitment from the Federal Reserve that it will mitigate the impact of its policies on their economies and financial markets.
According to Reuters, the United States led the response by explaining that most emerging market troubles are homegrown and that domestic interest rates have to be set with domestic recoveries in mind.
"Emerging markets need to take steps of their own to get their fiscal house in order and put structural reforms in place," U.S. Treasury Secretary Jack Lew said at a financial conference in Sydney.
Nonetheless, leading economies such as the United Kingdom, Japan, Germany, and Australia said they would commit to developing new measures to boost global growth significantly in a sustainable global environment.
Australian Treasurer Joe Hockey is proposing that members sign on to ambitious growth agendas and hold each other to account for delivering them.
DEFLATION, ABENOMICS, CHINA...
A major talking point will be the threat of global deflation, which is pressuring central banks to maintain flexibility in their monetary policies. Tied into this, José Luis Martínez Campuzano, Citi Strategist in Spain, expects to hear references to weak economic growth in the Eurozone.
Campuzano foresees a debate on European integration and its political and social risks. However, in his opinion, agreements on this front would be difficult to reach.
The G20 is also expected to revisit a major theme from prior meetings, concerns that Japan is creating an unfair competitiveness advantage thanks to "Abenomics" and its currency depreciation.
China will be another theme with the potential for policy members to address the country's excess private debt or economic policies. According to analysts at Barclays, one of the greater risks for 2014 is a possible liquidity crisis in that country.
Ayman Khlifat on Twitter @aymankkhlifat
Email : Aymanfxsignals@yahoo.com
Some early statements have been released ahead of this weekend's G20 meetings between finance ministers and central bank presidents of the world's top economies.
In response to the angst expressed by emerging market leaders, the world's wealthiest nations said they had to get their own houses in order and work on the agenda of boosting global growth, according to Reuters. Some emerging market leaders had complained about the spillover effects of their monetary polices.
The current G20 summit follows massive capital flight from countries like India, South Africa, and Turkey earlier this year, which forced central banks in those countries to hike interest rates. Emerging market economies are looking for a commitment from the Federal Reserve that it will mitigate the impact of its policies on their economies and financial markets.
According to Reuters, the United States led the response by explaining that most emerging market troubles are homegrown and that domestic interest rates have to be set with domestic recoveries in mind.
"Emerging markets need to take steps of their own to get their fiscal house in order and put structural reforms in place," U.S. Treasury Secretary Jack Lew said at a financial conference in Sydney.
Nonetheless, leading economies such as the United Kingdom, Japan, Germany, and Australia said they would commit to developing new measures to boost global growth significantly in a sustainable global environment.
Australian Treasurer Joe Hockey is proposing that members sign on to ambitious growth agendas and hold each other to account for delivering them.
DEFLATION, ABENOMICS, CHINA...
A major talking point will be the threat of global deflation, which is pressuring central banks to maintain flexibility in their monetary policies. Tied into this, José Luis Martínez Campuzano, Citi Strategist in Spain, expects to hear references to weak economic growth in the Eurozone.
Campuzano foresees a debate on European integration and its political and social risks. However, in his opinion, agreements on this front would be difficult to reach.
The G20 is also expected to revisit a major theme from prior meetings, concerns that Japan is creating an unfair competitiveness advantage thanks to "Abenomics" and its currency depreciation.
China will be another theme with the potential for policy members to address the country's excess private debt or economic policies. According to analysts at Barclays, one of the greater risks for 2014 is a possible liquidity crisis in that country.
Ayman Khlifat on Twitter @aymankkhlifat
Email : Aymanfxsignals@yahoo.com
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