G20 finance ministers call for growth

Meeting in Ankara on Saturday, finance ministers in the G20 group of world nations said that global economic expansion was slower than had been expected. But they expressed confidence that a recovery would gain momentum.

"Global growth falls short of our expectations. We have pledged to take decisive action to keep the economic recovery on track and we are confident the global economic recovery will gain speed," the ministers concluded.

The ministers said they would "refrain from competitive devaluations and resist all forms of protectionism." This comes after China's unexpected devaluation of the yuan currency last month.

Speaking with reporters, a senior US treasury official said it was important for China to signal that it will allow market pressures to drive the yuan "up as well as down."

"It would be a very bad thing for the global economy if we get into a pattern of competitive devaluation," the official said.

"We reiterate our commitment to move toward more market-determined exchange rate systems and exchange rate flexibility... and avoid persistent exchange rate misalignments," read a statement by the G20 ministers.

The ministers also outlined the limits to monetary policy in boosting growth: "Monetary policies will continue to support economic activity consistent with central banks' mandates, but monetary policy alone cannot lead to balanced growth," the ministers noted.

"Clearly in the fiscal sphere as well as in the structural reforms sphere, more needs to be done, and it needs to accompany and eventually take the baton from the central bank governors," the ministers and central bankers remarked.

The G20 ministers agreed that boosting investment was the key. Final investment strategies are being prepared by governments and will be discussed by the G20 leaders at their meeting in the Turkish city of Antalya in November.

jm/cmk (Reuters, AFP)