Finance Ministers and Central bank chiefs of G20 countries, including RBI Governor Raghuram Rajan, met here on Friday to figure out how to boost global economic growth amid continued slowdown and minimise risks.
Rajan arrived here on Friday to take part in the two-day meeting which would also be attended by Additional Finance Secretary Dinesh Sharma, who is representing Finance Minister Arun Jaitley.
Speaking at the meeting, International Monetary Fund (IMF) chief Christine Lagarde urged other countries to implement structural reforms along with China to strengthen their and the world’s economies.
"China is not the only economy in need of structural reforms. In fact, structural reforms are fundamental for the success of every G20 economy," Lagarde said.
"This was clearly recognised in the G-20’s 2009 framework for strong, stable and balanced growth," she said, referring to an agreement signed at the G-20’s Pittsburgh Summit in September 2009.
"And it was given specificity in the over 800 commitments that G20 members made in their 2014 national growth strategies."
Lagarde said there is urgent need for G-20 countries to accelerate structural reforms.
"(They) have become even more pressing given the disappointing state of the global recovery. Activity weakened unexpectedly at the end of last year, which led us at the IMF to revise growth downward for this year and beyond.
"In this fragile environment, we need urgent action not only to boost economic potential, but also to boost confidence about the recovery and near-term growth," she said.
US Treasury Secretary Jack Lew urged countries to avoid competitive devaluation. He said it was increasingly important to use all available policy tools to address a shortfall in global demand.
China’s Finance Minister Lou Jiwei said structural reform was the best way to sustain economic growth in G20 countries.
Structural reform is crucial to a robust, balanced and sustainable economy, with governments working on coordinated top-down design, Lou told the meeting.
Lou suggested removal of trade barriers and more encouragement for companies to invest.
China still has ample room for fiscal policy adjustment, is likely to raise the deficit ratio and will continue to cut taxes to support innovation and small businesses, he said.
China raised its fiscal-deficit-to-GDP ratio to 2.3 per cent for 2015, compared with the 2014 target of 2.1 per cent, with the number expected to rise to 3 per cent or more in 2016.