Japan PM says majority of G7 leaders agree on need for fiscal steps

Wednesday, 18 May 2016 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Japanese Prime Minister Shinzo Abe said on Monday a majority of Group of Seven leaders agree on the need to deploy fiscal stimulus measures to boost global demand.

Japan will host a G7 finance ministers and central bankers summit on May 20-21, and there are doubts about how much progress policymakers can make in shifting the global economy out of its current spell of slow growth and low inflation.

Earlier this month, Abe traveled to Europe to meet G7 heads in preparation for the meeting in Japan.

“The G7 doesn’t decide things by a majority (vote). The leaders would come up with a communique after a frank exchange of opinions,” Abe told lawmakers in the nation’s parliament.

The summit comes at a critical time for Japan because its economy is struggling to grow and inflationary pressure is losing momentum.

First-quarter economic growth data on Wednesday should also add to the backdrop with quarterly gross domestic product GDP forecast to have expanded by just 0.1%, according to a Reuters poll.

Lingering worries about Europe’s sovereign debt burdens, slowing growth in Britain and uncertainty about the pace of interest rate hikes in the United States are also likely to be hot topics during the summit.

Abe told lawmakers G7 countries shared a common understanding that slowing emerging markets, particularly China, and volatile oil prices pose risks to the global economy.

However, he noted policymakers would naturally tailor their fiscal policy to meet the needs of their own economies, acknowledging it will be difficult to get all G7 countries to enact the same fiscal policy steps.