Brexit is risk to global growth, says G20

AFP, CHENGDU: Britain’s vote to leave the European Union heightens risks for the world economy, finance chiefs from the G20 group of leading countries said Sunday.
The outcome of June’s referendum “adds to the uncertainty in the global economy”, they said in a communique after a meeting of central bankers and government officials in the Chinese city of Chengdu.
But they insisted that G20 countries were “well positioned to proactively address the potential economic and financial consequences” of the vote, adding: “In the future, we hope to see the UK as a close partner of the EU.”
The G20 cited several other factors complicating the global economic environment, among them “geopolitical conflicts, terrorism and refugee flows”.
But participants said Brexit was at the forefront of concerns at the meeting in Chengdu, the last before the G20 summit in September. Philip Hammond, Britain’s finance minister, told reporters the subject had come up “a great deal”.
“The reality is there will be a measure of uncertainty continuing right up to the conclusion of our negotiations with the EU,” he said.
Before the meeting, the International Monetary Fund (IMF) downgraded its forecasts for global growth this year and next by 0.1 per centage points, to 3.1 per cent and 3.4 per cent respectively.
“’Brexit’ marks the materialisation of an important downside risk to global growth,” IMF staff said in a report, adding that as it was “still very much unfolding, more negative outcomes are a distinct possibility”.
Officials in Chengdu said protracted or acrimonious talks between the EU and Britain over the departure could heighten the dangers.
US Treasury Secretary Jacob Lew stressed to his European and British counterparts “the need for negotiations to take place in a smooth, pragmatic and transparent manner”.
“A highly integrated relationship between the UK and the EU is in the best interests of Europe, the United States and the global economy,” he told journalists after the meeting.    
Other challenges threaten: a slowdown in the Chinese economy, as well as terrorist attacks and the failed coup in Turkey. Earlier this month 84 people were killed in the French city of Nice when a Tunisian truck driver—suspected to be inspired by the Islamic State jihadist group—ploughed his vehicle through crowds.
On Friday, a German-Iranian gunman described as “obsessed” with mass killers shot dead nine people in the German city of Munich before killing himself.
“We condemn, in the strongest possible terms, the recent terrorist attacks,” the communique said. “We reaffirm our solidarity and resolve in the fight against terrorism in all its forms and wherever it occurs.”
French Finance Minister Michel Sapin told AFP that terrorism had become an economic risk: “Today the frequency of attacks creates a new situation of uncertainty, which is at least as damaging as regional destabilisations or a regional conflict.”
But the communique did not mention the failed attempt to depose Turkey’s President Recep Tayyip Erdogan or his subsequent widespread crackdown on opponents.
Officials said the Turkish delegation had demanded an explicit statement of support for Erdogan’s government, but some other representatives had demurred.
Lacklustre growth
Concerns about slowing growth in China, the world’s second largest economy, have receded into the background at the G20 in the face of other threats.
Beijing is embarked on a fundamental transition intended to make domestic consumption the key economic driver instead of massive public spending and cheap exports.
The communique repeated a pledge from an earlier meeting in the Chinese commercial hub Shanghai in February, that G20 countries would use “all policy tools”, including monetary easing, fiscal spending and structural change, to boost growth.
But it added action could be taken “individually and collectively” and called for “inclusive growth” to bring in those left out of economic prosperity.

Brexit is risk to global growth, says G20

AFP, CHENGDU: Britains vote to leave the European Union heightens risks for the world economy, finance chiefs from the G20 group of leading countries said Sunday. The outcome of Junes referendum adds to the uncertainty in the global economy, they said in a communique after a meeting of central bankers and government officials in the Chinese city of Chengdu. But they insisted that G20 countries were well positioned to proactively address the potential economic and financial consequences of the vote, adding: In the future, we hope to see the UK as a close partner of the EU. The G20 cited several other factors complicating the global economic environment, among them geopolitical conflicts, terrorism and refugee flows. But participants said Brexit was at the forefront of concerns at the meeting in Chengdu, the last before the G20 summit in September. Philip Hammond, Britains finance minister, told reporters the subject had come up a great deal. The reality is there will be a measure of uncertainty continuing right up to the conclusion of our negotiations with the EU, he said. Before the meeting, the International Monetary Fund (IMF) downgraded its forecasts for global growth this year and next by 0.1 per centage points, to 3.1 per cent and 3.4 per cent respectively. Brexit marks the materialisation of an important downside risk to global growth, IMF staff said in a report, adding that as it was still very much unfolding, more negative outcomes are a distinct possibility. Officials in Chengdu said protracted or acrimonious talks between the EU and Britain over the departure could heighten the dangers. US Treasury Secretary Jacob Lew stressed to his European and British counterparts the need for negotiations to take place in a smooth, pragmatic and transparent manner. A highly integrated relationship between the UK and the EU is in the best interests of Europe, the United States and the global economy, he told journalists after the meeting. Other challenges threaten: a slowdown in the Chinese economy, as well as terrorist attacks and the failed coup in Turkey. Earlier this month 84 people were killed in the French city of Nice when a Tunisian truck driversuspected to be inspired by the Islamic State jihadist groupploughed his vehicle through crowds. On Friday, a German-Iranian gunman described as obsessed with mass killers shot dead nine people in the German city of Munich before killing himself. We condemn, in the strongest possible terms, the recent terrorist attacks, the communique said. We reaffirm our solidarity and resolve in the fight against terrorism in all its forms and wherever it occurs. French Finance Minister Michel Sapin told AFP that terrorism had become an economic risk: Today the frequency of attacks creates a new situation of uncertainty, which is at least as damaging as regional destabilisations or a regional conflict. But the communique did not mention the failed attempt to depose Turkeys President Recep Tayyip Erdogan or his subsequent widespread crackdown on opponents. Officials said the Turkish delegation had demanded an explicit statement of support for Erdogans government, but some other representatives had demurred. Lacklustre growth Concerns about slowing growth in China, the worlds second largest economy, have receded into the background at the G20 in the face of other threats. Beijing is embarked on a fundamental transition intended to make domestic consumption the key economic driver instead of massive public spending and cheap exports. The communique repeated a pledge from an earlier meeting in the Chinese commercial hub Shanghai in February, that G20 countries would use all policy tools, including monetary easing, fiscal spending and structural change, to boost growth. But it added action could be taken individually and collectively and called for inclusive growth to bring in those left out of economic prosperity.