MOSCOW — The leaders of the world’s 20 largest economies issued a joint statement on Friday saying it was too early to ease off government stimulus spending, in spite of recent positive economic news.
The opening lines of the statement, which was issued at the end of the Group of 20 meeting hosted by Russia, said that “strengthening growth and creating jobs is our top priority” with no mention of tackling deficits.
The leaders also approved a plan to crack down on multinational corporations that had been able to legally avoid taxes by shuffling profits and costs between various jurisdictions. The overhaul should, over time, shift some of the global tax burden away from individuals and small businesses to large, global companies. But the first step, a plan to share tax information, would only be implemented at the end of 2015, the statement said.
The economic tone of the statement was little changed from a draft issued in July after a summit meeting of finance ministers, suggesting that the world’s most influential leaders are still nervous about growth prospects despite a recent spate of positive economic news. Governments in the Group of 20 countries collectively account for about 90 percent of the world’s economic output.
“We agreed that it remains critical for the G-20 countries to focus all our joint efforts on engineering a durable exit from the longest and most protracted crisis in modern history,” the statement said.
Although not openly critical of austerity measures like the across-the-board federal budget cuts in the United States or the diminished state spending lenders have insisted on in Greece, the statement suggested that most governments considered the recovery too weak to risk reducing spending on unemployment benefits, job training or infrastructure.
The statement comes as the United States Federal Reserve considers pulling back from its stimulus efforts, which have helped keep interest rates low and spurred growth.
The expectation of a change in Fed policy is sending tremors through the global economy. Currencies like the rupee in India to the ruble in Russia have lost value. Emerging market bonds, too, have suffered.
The G-20 statement offered little consolation. It said central banks would better “communicate” their intentions but made no promises of easing the sell-off in countries with poorer investment climates.
The statement seemed in part a concession by developing countries like India, where the rupee has lost 17 percent of its value against the dollar this year, that they would have to fend for themselves. It referred vaguely to “collective and country specific measures” to improve the investment climates in such nations.
The statement, a senior United States Treasury official said in a telephone interview, was “a recognition that certain emerging markets that are seeing weakened investor appetite need to look at their policy reform agenda” and help themselves.
Article source: http://www.nytimes.com/2013/09/07/business/global/g-20-leaders-agree-to-continue-stimulus-plans.html?partner=rss&emc=rss