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G20 finance heads pledge to monitor coronavirus impact on growth

By Amanda Cooper

Group of 20 says economy will pick up in 2020 and 2021 but is ready to act if needed

IMF managing director Kristalina Georgieva API

The heads of finance in the world’s 20 largest economies will continue to monitor the impact of the coronavirus on global growth and will take steps if necessary to ward off a wider slowdown.

The Group of 20’s finance ministers and heads of central banks said on Sunday that an environment of low interest rates and lessening trade tensions would help encourage a pick-up in global growth this year and next.

“After signs of stabilisation at the end of 2019, global economic growth is expected to pick up modestly in 2020 and 2021,” G20 finance leaders said in a joint communique on Sunday. “The recovery is supported by the continuation of accommodative financial conditions and some signs of easing trade tensions.

“However, global economic growth remains slow and downside risks to the outlook persist, including those arising from geopolitical and remaining trade tensions, and policy uncertainty.”

The coronavirus, which causes the pneumonia-like Covid-19 disease, has killed nearly 3,000 people and infected almost 80,000. Most cases have been in China, but the virus has spread to nearly 30 countries, including Japan, South Korea, the United States and Australia.

“We will enhance global risk monitoring, including of the recent outbreak of Covid-19. We stand ready to take further action to address these risks,” the statement said.

Reuters quoted US treasury secretary Steven Mnuchin as saying central bankers would look at options to respond to the epidemic if needed, while Bank of Japan governor Haruhiko Kuroda said he was ready to ease policy if necessary.

China was represented at the G20 meeting by its ambassador to Saudi Arabia, as senior officials stayed away due to the growing crisis over the virus, Reuters said.

Chinese president Xi Jinping, in a speech on Sunday, urged authorities at all levels to continue to take measures to fight the spread of the virus. “This is both a crisis and a big test for us,” the Xinhua news agency quoted Xi as saying.

“The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society,” Xi said, though he added the effects would be short term and controllable, according to Xinhua.

FURTHER READING: G20 definition

FURTHER READING: Chinese authorities may take over HNA amid coronavirus disruption

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