U.S. Treasury Secretary Jacob J. Lew praised a growth target adopted by Group of 20 policy makers, calling it progress toward jump-starting the global economy and the end of the international debate over austerity.
“There’s just a world of difference” between talks that wrapped up today and those held over the past few years, Lew said at a press conference after the two-day meeting of finance ministers and central bankers in Sydney. “The discussion this weekend was really principally focused on growth,” while a year ago the officials were “debating austerity.”
The group, which includes the world’s largest economies such as the U.S. and Japan plus emerging markets including Argentina and Turkey, agreed to target collective gross domestic product that’s more than 2 percent higher after five years than the trajectory implied by current policies.
In the run-up to the meeting, Lew had ramped up his emphasis on sparking domestic demand in Europe and Japan and on urging China to open its economy. He also continued his call for speeding coordination of financial regulations, including bank-capital standards and rules for shutting down failing lenders.
“We see a global economic recovery, but one in which activity remains weak and global demand is still deficient,” Lew said today. “That is why the decision in Sydney to focus on growth strategies is so significant. These strategies can help address the near-term challenges of high unemployment, uneven economic growth, and weak domestic demand.”
He cited “vulnerabilities in the euro zone and China’s pursuit of difficult yet necessary reforms.”
The International Monetary Fund last month raised its forecast for 2014 global growth as developed nations accelerate more sharply than their emerging counterparts.
Gross domestic product in advanced economies will rise 2.2 percent this year after a 1.3 percent expansion last year, led by the U.S. and U.K., according to the IMF’s Jan. 21 projections. Growth in developing nations will be 5.1 percent, compared with 4.7 percent in 2013, the fund said.
Lew said he welcomed an agreement this weekend to move forward on global tax cooperation.
The finance ministers agreed to implement a global standard for automatically exchanging information between tax authorities by the end of 2015, the Organization for Economic Cooperation and Development said today.
The endorsement is a step toward putting an end to “banking secrecy as we know it,” Pascal Saint-Amans, director of the OECD’s center for tax policy and administration, told reporters today in Sydney.