WASHINGTON (AFP) – The International Monetary Fund on Wednesday called on the Group of 20 major economies to take clear steps to spur growth at this weekend’s meeting of finance chiefs in Australia.
“Decisive action is needed by all members for stronger and more balanced growth,” the IMF said in a note to the G20 ahead of the meeting Saturday and Sunday in Cairns. In February in Sydney, the G20 finance ministers fixed a goal of raising global economic growth by 2.0 per cent over five years, but left the strategies to reach it vague.
“The global recovery should regain strength but downside risks have risen,” the IMF said, urging the G20 to work together to produce beneficial spillover effects that will help them as well as the global economy.
According to the 188-nation IMF, the advanced economies who have the means – specifically the United States and Germany – and certain emerging-market economies like Brazil and India should increase public spending on infrastructure.
Structural reforms are needed across all the G20 economies to boost potential output, it said, pointing to the productivity boost that would come from easing limits on trade and investment in Indonesia, Russia and Turkey.
The IMF called for labour reform that lifts gender and age barriers in advanced economies, such as the US and Japan, and allows greater participation, such as in South Africa, where an “important fraction” of the population remains unemployed.
“Actions to increase labour demand and remove impediments to employment are also needed in stressed euro area economies,” it said.