Finance ministers and central bank governors of Group of 20 (G20) pledged on Saturday to boost the global economic recovery and to plan an exit strategy from the extraordinary economic stimulus when time is mature to take actions.
A communique issued at the end of a meeting of the G20 top finance officials said that "we will continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies, consistent with price stability and long-term fiscal sustainability until recovery is secured."
Since the G20 summit meeting in London in early April, the global economy has improved with the sign of recovery emerging in many countries. Finance ministers and central bank officials from rich and developing countries representing 80 percent of world economic output met here amid mounting signs of an economic recovery. Japan, Germany, France and Australia have already recorded growth in the second quarter of this year while Britain and the United States are expected to do so in the third quarter.
There is no doubt that the darkest time of global economic recession in the past 70 years has passed and the dawn of economy recovery is emerging.
However, there are also many uncertainties in the road of recovery and many analysts and government officials have predicted that the recovery will be slow and weak at least in the next year.
It is under such a uncertain situation that the G20 finance ministers and central bank governors stressed that the stimulus policy should continue until the recovery is confirmed.
Meanwhile, when and how to exit from the extra-large and extraordinary economic stimulus measures implemented by many economies is another important issues facing major economics. If they exit too soon from the stimulus policy, the fragile world economy could easily deteriorate again and lapse into another contraction. To exit too late will increase the risks of inflation and soaring government debt, posing new risks for the long-term economic growth.
The G20 communique said that "we agreed the need for a transparent and credible process for withdrawing our extraordinary fiscal, monetary and financial sector support as recovery becomes firmly secured".
|On how to implement the exit strategy, the G20 finance officials stressed that, working with the IMF and other international organizations, "we will develop cooperative and coordinated exit strategies" and, at the same times, "recognizing that the scale, timing and sequencing will vary across countries and across the types of policy measures."