G20 sets 2% annual growth target for five years

The meeting of finance ministers and central bank governors of the Group of 20 advanced and emerging major economies in Sydney, Australia proposed to adopt realistic policies with the aim to lift collective GDP by more than 2 per cent above the trajectory implied by current policies over the coming 5 years.

This in effect means over $2 trillion more in real terms and will lead to significant additional jobs.

To achieve this, G20 said, it would take concrete actions across the group, including increase in investment, employment and participation, enhanced trade and competition, in addition to macroeconomic corrections.

These actions will form the basis of G20's comprehensive growth strategies and the Brisbane Action Plan, it said.

A joint communique issued at the end of the meeting cited signs of improvement in the global economy, in particular, growth strengthening in the United States, United Kingdom and Japan alongside continued solid growth in China and many emerging market economies, and the resumption of growth in the euro area.

Despite the recent improvements, the global economy remains far from achieving strong, sustainable, and balanced growth, the joint communique said, adding that the global economy still faced weaknesses in some areas of demand, and growth was still below the rates needed to get people back into jobs and meet their aspirations for development.

The communique pointed to the recent volatility in financial markets, high levels of public debt, continuing global imbalances and remaining vulnerabilities within some economies and said member nations would remain committed to developing new measures in the context of maintaining fiscal sustainability and financial sector stability, to significantly raise global growth.

''We recognise that monetary policy needs to remain accommodative in many advanced economies, and should normalise in due course, with the timing being conditional on the outlook for price stability and economic growth. This eventual development would be positive for the global economy and reduced reliance on easy monetary policy would be beneficial in the medium term for financial stability.

''In a transition phase, economic policy could help with measures to increase private sector demand, including investment. We all stand ready to take the necessary steps to maintain price stability, by addressing in a timely manner deflationary and inflationary pressures. All our central banks maintain their commitment that monetary policy settings will continue to be carefully calibrated and clearly communicated, in the context of ongoing exchange of information and being mindful of impacts on the global economy.''

Finance minister P Chidambaram on Sunday said India's concerns with regard to withdrawal of US stimulus and the need to expedite IMF quota reforms have been taken on board by the group of rich and developing nations.

Referring to the remarks of German finance minister Wolfgang Schaeuble that India should not attribute its problems to monetary policies of developed nations, Chidambaram said, emerging economies followed the advice of the IMF when the major economies went through a period of downturn after the 2008 global financial crisis.

"So when they (developed world) sought our cooperation during the economic downturn it is only fair that they cooperate with developing countries during the economic recovery," he said.

"The communique has been drawn by the deputies sitting together and our concerns have been fully reflected in the communique," he said in an interview after conclusion of the meeting of G20 finance ministers and central bank governors.

The communique was released at the end of the conference, which among others was attended by finance ministers of several important countries, including the US, Japan, France and Australia.

Representatives of global bodies like the International Monetary Fund (IMF) and European Central Bank also participated in the conference.

Collectively G20 represents 85 per cent of the global economy.