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Monday 25th
posted by Morning Star in World

INTERNATIONAL finance officials meeting in Chengdu, western China, promised yesterday to boost sluggish global growth and protect the world economy from any consequences of Britain’s referendum vote to leave the European Union.

Envoys of the Group of 20 major economies also rejected trade protectionism, following US Republican presidential candidate Donald Trump’s talk of restricting access to US markets.

The gathering of finance ministers and central bank governors from the US, China, Britain, Germany and other countries took place against the backdrop of a weak global recovery and trade tension over claims that China “dumps” exports of low-priced steel.

In addition, the Brexit vote has increased global economic uncertainty, said a joint statement by the officials.

“G20 members are ready to actively respond to the potential economic and financial impact brought by the British referendum,” it said.

“In the future, we hope to see Britain as a close partner of the EU.”

International Monetary Fund (IMF) director-general Christine Lagarde had called earlier for quick action to end uncertainty about the British decision.

She claimed that post-referendum market turmoil had prompted the IMF to cut its forecast of this year’s global growth by 0.1 percentage point.

The world’s financial leaders promised to use “any and all policy instruments” to achieve “strong, sustainable, balanced and inclusive growth objectives.”

The governments promised to strengthen communication and co-operation but announced no joint measures, despite declaring: “We are taking action to boost confidence and promote growth.”

US Treasury Secretary Jacob Lew had insisted before the meeting that it was not the right time for co-ordinated action similar to that taken in 2008-09 following the global crisis because economies face different conditions.

“Overall, the general sense was that the outlook remains uncertain,” he said yesterday.

“There is now broad consensus that what the global economy needs is growth, not austerity, and the discussions here have focused on how best to achieve that outcome.”

The envoys also pledged to avoid devaluing currencies to boost exports, adding: “We will oppose all forms of protectionism.”

National leaders of the G20 economies are due to meet in September in Hangzhou, south-west of Shanghai.