G20 aims to boost output by $2 trillion in five years
FINANCIAL HEADS of some of the world’s largest economies have agreed to target an extra $2 trillion in GDP growth over the next five years – two per cent higher than the current expected rate of output.
The G20 nations want to hike output by $2 trillion (£1.2 trillion) collectively over the next half a decade, and plan to increase competition, trade and employment to achieve their goal, according to a statement at the end of their weekend meeting in Sydney yesterday.
“This goal is attainable and is in line with International Monetary Fund (IMF) analysis presented to the G20 this week. Measures to support investment, boost trade, and promote competition will be essential for more sustainable and robust growth, as noted by the G20,” said Christine Lagarde, the IMF’s managing director.
The group’s announcement also hinted at confidence about the US Federal Reserve’s decision to taper its quantitative easing (QE) programme, saying that while “monetary policy needs to remain accommodative in many advanced economies”, it would be a positive step for the economy and benefit financial stability if advanced economies were less reliant on such unconventional policies.
The finance ministers also recommitted to shared action on tax avoidance, saying: “Profits should be taxed where economic activities deriving the profits are performed and where value is created”.
The G20 countries say that by the end of 2015, they hope to be sharing information on tax matters, with a common reporting standard for companies operating in different states.
Speaking to the Sydney Morning Herald, Bank of England governor Mark Carney expressed confidence in his own forward guidance policy, which has come under criticism : “We have the fastest employment growth on record, inflation back at target, and inflation expectations well anchored.”
Carney concluded: “It’s hard to find a criteria by which you would not judge it successful.”