Finance ministers from the world's biggest economies were urged to balance efforts to shore up a fragile global recovery with the need to slash deficits when a G20 meeting begins today.
With the sovereign-debt crisis in Europe forcing countries there to accelerate debt-reduction measures, fears are growing that moves towards tough austerity could hit growth and derail a recovery whose durability is at risk.
Officials said the meeting was also unlikely to reach a conclusion on the contentious issue of tighter banking regulation as viewpoints diverge.
"It's important that we understand just how fragile the recovery is," said Trevor Manuel, minister in the presidency for South Africa and former finance minister.
"Economies around the world are raising the spectre of a double-dip recession and this presents the opportunity to take decisions to prevent the world from going into a fresh recession."
Officials are wary of shifting too quickly towards emphasising deficit cuts at the cost of growth despite the threat of bond markets hammering debt-hit governments, as witnessed recently with Greece's soaring borrowing costs.
"We shall have to achieve economic recovery, at the same time we cannot give up fiscal prudence," India's Finance Minister Pranab Mukherjee told AFP.
"So striking a balance between two apparently contradictory situations is to be achieved. That is the challenge."
Europe's debt crisis will dominate the talks. But ministers are unlikely to single out either the euro or the yuan, which China is under pressure to let appreciate, for specific discussions in Busan, a G20 official said today.
"This issue may come up but I don't think, as separate individual actions, it will be on agenda items," said Sakong Il, chairman of Seoul's presidential committee for the G20 summit.
As ministers start two days of meetings in Busan, there were also indications that they would struggle to carve out a consensus on how to impose tougher restrictions on the banking sector.
"Further deliberation of this issue" was needed, said Sakong.
The International Monetary Fund is expected to present a revised draft proposal on a bank levy at the meeting, an IMF spokeswoman said today.
