G20 Officials Warn of Downside Risks to Global Economy Thomas Whittle - Xinhua
go to original September 30, 2012

MEXICO CITY — The growth of the world economy faces significant downside risks, G20 officials warned last week.

International financial institutions have projected global economy would grow from 3.0 to 3.5 percent this year, but significant downward risks still exist, Mexican Central Bank Deputy Governor Manuel Ramos Francia told a press conference after a meeting of deputy finance ministers and central bankers of G20.

Francia explained that these risks come from the debt crisis in the euro zone, the U.S. measures on fiscal consolidation and debt ceiling, and the slowdown in some major emerging economies.

The monetary easing launched by major developed economies has temporarily tempered the risks and gave a little boost to the economies,Francia said.

The meeting emphasized that these risk factors “are not isolated but feed off each other and increase the probability of occurrence,” Francia said.

Mexican Deputy Finance Minister Gerardo Rodriguez Regordosa said one of the topics addressed at the meeting was to reduce pressures in commodity markets, including food.

The agenda sets out measures to improve the functioning and transparency of financial and physical markets, which requires coordination of actions “that can not be implemented in the near term,” Regordosa noted.

The “most important and imminent challenge facing all countries is to protect the low-income population, vulnerable to food prices,” he added.

The meeting, a prelude to that of G20 finance ministers and central bank governors in November, reviewed the agreements reached at the June G20 summit held in Los Cabos of Mexico.

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