A retreat to inward-looking policies poses the greatest risk to global growth, the current president of the G-20 group of countries has said.
A meeting of Finance Ministers from G-20 countries, which was chaired by its current president Argentina, noted that growth is firming and that they are going back to levels of growth equivalent to the pre-crisis level.
"We are back to growth equivalent to the one that we had prior to the crisis of 2008 and 2009. Of course, downside risks remain, although contained," Nicolas Dujovne, Treasury Minister of Argentina, said here.
In the absence of Finance Minister Arun Jaitley, India was represented by Economic Affairs Secretary Subhash Garg.
"Most of the participants pointed to the most important risks being the retreat to inward-looking policies, the impact of monetary normalisation in terms of the impact on the international economy, and then the geopolitical risks," Dujovne said after the meeting of G-20 ministers.
Noting that G-20 member countries recognised the importance of the technological change in which they are in right now, he said the group had a very positive view on the outcome that this will have in terms of growth in the medium and longer-term.
"But, of course, this is also a challenge for our citizens which are facing this dramatic change in the way in which we produce, consume, communicate," he said.
Observing that there is a very broad agreement that the outcome will be positive, but the future needs to be shaped, the Argentinian finance minister said in order to shape the future, there are some policy options that G-20 can adopt to make the transition smoother to this new environment.
"So in that aspect, we discussed how taxes and transfers, competitive conditions, public expenditure, data collection, can help us to live with this transition," he said.
Some of the conclusions of this meeting would be produce as a concrete policy toolkit in their next meeting of Finance Ministers and Governors, he said.
According to Federico Sturzenegger, Central Bank governor of Argentina, G-20 has identified two main sources of concern: the retreat to inward-looking policies and monetary policy normalisation.
Noting that there was general appeal for multilateralism on the first issue, Sturzenegger said there is certainly the view that a lot of work still needs to be done.
For example, the issue of trade in services, which is to some extent a pending agenda, was emphasised again in this meeting, he said. The idea that the gains from trade have to be evenly shared is a concern that was placed both by advanced economies and emerging economies, he said.
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