G20 optimistic on global economy

Meeting in Washington, G20 finance ministers and central bank governors reiterated their commitment to undertake reforms that will boost the global economy by $2 trillion more over the next five years than otherwise expected.

Despite the malaise that has many worried that the eurozone will sink back into recession, the G20 said they still expect to achieve that goal, after talks on the side of the International Monetary Fund-World Bank annual meetings.

“We have spoken a lot about economic challenges. While some key economies are recovering, others face renewed weakness,” said Australian Treasurer Joe Hockey, whose country holds the G20 presidency.

“But we have emerged with optimism. We are determined to achieve outcomes that will strengthen the recovery,” Hockey said.

Besides reforms, the G20 has backed a new Global Infrastructure Initiative, aimed at supporting infrastructure development around the world as a way to boost economies and create jobs.

Hockey said developing and emerging economies need some $8 trillion in infrastructure development over the next 10 years.

He said the G20 was confident Europe could rebound, but only if the troubled countries of the eurozone implement needed reforms.

“There’s a recognition that Europe can get better, but it does need to make the decision to carry out these structural reforms,” he said.

He also expressed sympathy for the European Central Bank, which is straining against deflationary pressures and slowing consumption.

ECB chief Mario Draghi “has certainly the most challenging job in the world at the moment.” (AFP)