🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

UPDATE 1-G20 likely to keep stimulus pledge -UK govt source

Published 11/04/2009, 07:23 AM
Updated 11/04/2009, 07:42 AM

(Adds comments by U.S. treasury deputy, details)

By Sumeet Desai

LONDON, Nov 4 (Reuters) - G20 policymakers are likely to maintain their pledge to keep economic life-support packages in place until recovery is assured when they meet this weekend, a UK government source said on Wednesday.

Finance ministers and central bankers from the Group of 20 club of rich and developing nations will gather in St Andrews in Scotland on Friday and Saturday to follow up on agreements made at a leaders' summit in Pittsburgh in September.

Since then, more signs have emerged that the world is coming out of the worst synchronised downturn since the World War 2 though some countries like Britain have still not shown a return to growth.

But the source said it was probably still too early to start withdrawing the extraordinary support measures that countries have put into their economies over the last year.

"We are not yet back to trend growth levels," the source said. "I expect we will have the same language as in Pittsburgh, that the current support measures need to be kept in place until recovery is well secured."

Policymakers will, however, discuss how they can coordinate or exchange information on eventual strategies fro withdrawing the stimulus, alongside talks on how to establish a framework for more balanced global growth and climate finance initiatives.

"There will be a set of discussions about how we're going to sequence all this as governments think about moving from a period of stress and so forth to a period that's steadier and more regularised and as some of these extraordinary measures which the G20 countries took become less necessary," U.S. Deputy Treasury Secretary Neal Wolin said in Johannesburg.

Wolin added, however, that for now the focus would be to continue pushing stimulus.

WEAK DOLLAR

Asked if the weakness of the dollar would be an issue for the G20 meeting, the source said: "The currency issue is always there", but added that it was not on the formal G20 agenda.

The two main issues are expected to be establishing how the framework for growth agreed in Pittsburgh would actually work and climate finance ahead of an environment summit in Copenhagen. The Danish Prime Minister will attend the Scotland meeting.

Countries are expected to sign up to a process where they submit their own projections for their economies which will then be assessed by the International Monetary Fund to see if they are compatible with each other and if not what policy changes would be required, which would be discussed by the G20.

The country projections will not just focus on current account imbalances, the source said, but on several variables such as components of aggregate demand or public finances.

On climate finance, policymakers will discuss not only the cost but also governance issues of funding is channelled to low income countries, for example.

(additional reporting by Ed Cropley in Johannesburg)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.