December 10, 2013
G20 says economy recovering but no end to crisis yet due to emerging markets' volatility
The Group of 20 said today the global economy was improving but it was too early to declare an end to crisis with emerging markets facing increasing volatility.
Leaders of the G20 acknowledged the troubles faced by some emerging nations but said it was up to them, first and foremost, to put their own houses in order.
The prospect that the Federal Reserve may rein in its expansive monetary policies as soon as this month has plunged into turmoil some emerging economies that had enjoyed rapid growth thanks in part to a flood of cheap dollars.
Emerging and developed G20 powers in St. Petersburg struggled to find common ground over the turbulence unleashed by the prospect of the United States reducing its money printing.
A communique issued at the end of the two-day summit stuck closely to the statement issued by finance ministers in July, demanding changes to monetary policy must be "carefully calibrated and clearly communicated."
The G20, which united in response to global crisis in 2009, now faces a multi-speed recovery with the US economy pushing ahead, Europe maybe finding a floor but developing economies facing blowback from the looming 'taper' by the Fed.
"Medium-term fiscal strategies ... will be implemented flexibly to take into account near-term economic conditions, so as to support economic growth and job creation, while putting debt as a share of GDP on a sustainable path," the communique said.
New elements referred to a growth initiative proposed by Australia, which assumes the G20 chair next year, a proposal to tighten regulation of so-called 'shadow banking' and extending a deadline on reining in trade protectionism.