G20 worried by 'modest' global growth, commodities weakness

Financial leaders from the Group of 20 nations said on Friday they were heartened by a recent recovery in financial markets, but warned that global growth was "modest and uneven" and threatened by weakness in commodities-based economies.

In a communique issued after their meeting in Washington, G20 finance ministers and central bank governors repeated their pledge to refrain from competitive currency devaluations, but offered no new initiatives to keep growth from stalling.

The G20 officials took a slightly more positive view on financial markets, which they said had mostly recovered from sharp selloffs earlier this year and were in better shape since they last met in Shanghai in February.

• IMF, World Bank and G20 officials set to grapple with closing tax loopholes
• Horror? Romance? Comedy? StephenPolozsays the Canadian economy is like a movie: DonPittis
• Global economy will be 'disappointing' in 2016, ChristineLagardesays

"However, growth remains modest and uneven, and downside risks and uncertainties to the global outlook persist against the backdrop of continued financial volatility, challenges faced by commodity exporters and low inflation," they said.

Economic complications

The communique also pointed to Britain's possible exit from the European Union, geopolitical conflicts, terrorism and refugee flows as complications for the global economic landscape.

The statement repeated G20 pledges to "use fiscal policy flexibly" to strengthen growth, job creation and confidence. It kept language that member countries "will continue to explore policy options," adding that they would be "tailored to country circumstances."

The G20 nations also maintained their previous pledges to consult closely on exchange rates.

"We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluation and we will not target our exchange rates for competitive purposes. We will resist all forms of protectionism," they said.

The G20 gathering, the highlight of the International Monetary Fund and World Bank spring meetings in Washington, came amid growing pressure on richer nations to boost infrastructure spending, deregulate industries and spur employment.

Earlier this week the IMF cut its 2016 growth forecast for the world economy, the fourth such move in less than a year.

Commodityweakness

The meetings this week also coincided with weakness in a number of key commodity-based economies, particularly Brazil, which is enduring its worst recession in decades.

After release of the so-called "Panama Papers" earlier this month stirred up controversy over global elites' widespread use of off-shore tax havens to shield their wealth, the G20 officials strengthened their pledge to implement measures to combat exploitation of tax law mismatches and improve tax information sharing.

They said "defensive measures will be considered by G20 members against non-cooperative jurisdictions" if progress towards these goals is not made.