G-20 Leaders Aim for Balanced Growth, Revival of Jobs

  • IMF Managing Director welcomes G-20 actions to support growth, curb deficits
  • Heartened by renewed commitment to implement financial sector reforms
  • G-20 aims for "calibrated" approach tailored to country needs
  • Heads of the Group of Twenty (G-20) met June 26–27 in Toronto, Canada to assess the state of the recovery and decide on measures to keep it going, saying the social impact of the crisis was still widely felt. Their highest priority was to safeguard and strengthen the recovery from the global recession that remains uneven and fragile.

    The G-20 leaders agreed to develop a comprehensive action plan to bolster growth and foster a strong and lasting recovery—to be finalized at the next summit in Seoul in November, an initiative IMF chief Dominique Strauss-Kahn said “holds out great promise.” The IMF has provided the G-20 with analysis on how to improve global growth and will continue to support what is known as the Mutual Assessment Process in the next phase.

    Differentiated approaches

    With the global recovery moving at different paces in different countries, leaders left room for governments to tailor their responses to their own circumstances. “Those countries with serious fiscal challenges need to accelerate the pace of consolidation. This should be combined with efforts to rebalance global demand to help ensure global growth continues on a sustainable path,” the communiqué stated.

    Using studies by the IMF and the World Bank, leaders said that a more ambitious path of reforms could significantly boost growth around the world. Over a five-year period, the communiqué said:

    • global output would be higher by almost $4 trillion;

    • tens of millions more jobs would be created;

    • even more people would be lifted out of poverty; and

    • global imbalances would be significantly reduced.

    The International Monetary Fund released in Toronto its assessment of scenarios for improving growth through the Mutual Assessment Process, designed to help enhance the synergy of country economic programs to achieve stronger growth worldwide. It is scheduled to make public its latest forecast of global growth in Hong Kong on July 8.

    Strauss-Kahn noted that more robust growth is needed both to reduce unemployment and to lessen the burden of large public debts.

    The G-20 Mutual Assessment Process is the mechanism through which the growth challenge can be addressed, the IMF said. The process points to three areas for action. First, fiscal consolidation in...

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