The meeting of G20 finance ministers and central bankers held in Ankara, Turkey, over the weekend once again shows the inability of this powerful global group to initiate measures to rejuvenate the global economy. The meeting was held in the midst of turbulence in the global financial markets triggered by the turbulence in the Chinese markets. And the meeting also came at a time when there was no end in sight to the wild fluctuations in stock prices in global markets and the rapid changes in foreign exchange markets. These developments come against the backdrop of concerns over China’s uncertain economic outlook and growing speculation over an interest rate hike by the United States.
The communiqué issued after the summit shows the group’s inability to do anything meaningful. It made an admission that “global growth falls short of our expectations” and warned of the impact of financial turmoil and slowing growth in China on emerging markets and more broadly, the communique declared that the G20 had taken “decisive action to keep the recovery on track” and was “confident the global economic recovery will gain speed.” Experts say there is no recovery. In a note published in preparation for the G20 meeting, the International Monetary Fund (IMF) said its forecasts for the world economy, made only last July, were already out of date. Growth had fallen below expectations in the major economies like the US, the euro zone, Japan and also in most poorer countries.
Reacting to the current market reality, Turkey’s Deputy Prime Minister Cevdet Yilmaz said more needs to be done to achieve an additional two percent increase in growth over five years as targeted by G20 countries at a summit last year in Australia. Yilmaz, who is also the economy minister, said interest rate rise by the US Federal Reserve in the coming months would not have a fundamental impact on emerging markets, describing the expected move as “normalisation”.
In the current situation, China can do more to reassure the markets than G20. The global market turmoil is caused by concerns over China’s uncertain economic outlook and growing speculation over an interest rate hike by the United States. Beijing has been under pressure to explain its recent monetary policies and take appropriate actions, but it has offered no details. China should offer details about its planned crucial reforms and demonstrate its determination to stabilize the economy by taking effective actions. Its policies often surprise markets, like the abrupt devaluation of its currency to boost exports. Suspicion has also grown that China’s economic statistics do not accurately reflect the real state of its economy.
One reason G20 has failed to make any huge impact is the contradiction in the policies of its member states.
The meeting of G20 finance ministers and central bankers held in Ankara, Turkey, over the weekend once again shows the inability of this powerful global group to initiate measures to rejuvenate the global economy. The meeting was held in the midst of turbulence in the global financial markets triggered by the turbulence in the Chinese markets. And the meeting also came at a time when there was no end in sight to the wild fluctuations in stock prices in global markets and the rapid changes in foreign exchange markets. These developments come against the backdrop of concerns over China’s uncertain economic outlook and growing speculation over an interest rate hike by the United States.
The communiqué issued after the summit shows the group’s inability to do anything meaningful. It made an admission that “global growth falls short of our expectations” and warned of the impact of financial turmoil and slowing growth in China on emerging markets and more broadly, the communique declared that the G20 had taken “decisive action to keep the recovery on track” and was “confident the global economic recovery will gain speed.” Experts say there is no recovery. In a note published in preparation for the G20 meeting, the International Monetary Fund (IMF) said its forecasts for the world economy, made only last July, were already out of date. Growth had fallen below expectations in the major economies like the US, the euro zone, Japan and also in most poorer countries.
Reacting to the current market reality, Turkey’s Deputy Prime Minister Cevdet Yilmaz said more needs to be done to achieve an additional two percent increase in growth over five years as targeted by G20 countries at a summit last year in Australia. Yilmaz, who is also the economy minister, said interest rate rise by the US Federal Reserve in the coming months would not have a fundamental impact on emerging markets, describing the expected move as “normalisation”.
In the current situation, China can do more to reassure the markets than G20. The global market turmoil is caused by concerns over China’s uncertain economic outlook and growing speculation over an interest rate hike by the United States. Beijing has been under pressure to explain its recent monetary policies and take appropriate actions, but it has offered no details. China should offer details about its planned crucial reforms and demonstrate its determination to stabilize the economy by taking effective actions. Its policies often surprise markets, like the abrupt devaluation of its currency to boost exports. Suspicion has also grown that China’s economic statistics do not accurately reflect the real state of its economy.
One reason G20 has failed to make any huge impact is the contradiction in the policies of its member states.
