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Slow growth, spillovers of US Fed stimulus tapering to dominate G20 summit

2013-08-28 10:52 Global Times Web Editor: qindexing

Sluggish growth and spillovers of the US Federal Reserve's plan to scale back its economic stimulus are expected to feature prominently in discussions at the upcoming leaders' summit of Group of 20 or G20, said Russian organizers of the event Tuesday.

At the St Petersburg summit slated for Sept. 5-6, policy makers will discuss ways to boost sagging economies in both developed and developing countries, which include creating favorable environment for private investment and scaling up investment in infrastructure, said G20 Sherpa Ksenia Yudaeva at a press conference here.

Meanwhile, uncertainties surrounding the US Federal Reserve's plan to phase out stimulus are also expected to dominate talks at the G20 summit, she added.

Fed Chairman Ben Bernanke announced in June that the American central bank would start winding down its bond purchases later this year if the economy continues to improve as expected. The plan has raised concerns among investors and some emerging economies about depreciation of currencies and possible financial instability incurred by the US central bank's exit of its economic stimulus program.

As for possible fiscal strategies G20 leaders would adopt to promote sustainable growth, Yudaeva said there will be "no unified approach" for all countries, as economic situation varies from country to country. But the ultimate goal is same, which is to " improve the fiscal situation in the medium term."

Russia, which holds the G20 rotating presidency this year, outlined a strategic agenda of igniting a new cycle of economic growth through quality jobs and investment, trust and transparency, and effective regulation, according to Yudaeva.

G20 leaders, she said, will adopt plans to assess global risks and set out actions regarding financial and structural reforms and job creation.

On the global financial and economic landscape, Yudaeva said one of the progress made since last year is a more stabilized Europe. Taking into consideration its economic growth momentum, " Europe seems to get out of the recession," she said.

As for the new formula of the International Monetary Fund (IMF) quotas, Yudaeva admitted it was the area where the least progress has been achieved.

Though a new formula is currently under discussion, but no further steps could be taken without the implementation of previous decisions, Yudaeva said. "We expect the US congress will prove (sic) 2010 reform sometime this fall and this will open the window for further discussion and finalize the discussion next January."

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