THE global economic recovery is beset by “downside risks”, China’s vice-premier told Asia-Pacific finance ministers yesterday, a day after growth in the world’s second-largest economy hit a five-year low.
The meeting, here, of ministers from the Asia-Pacific Economic Cooperation (Apec) forum precedes the group’s annual summit next month, when Chinese President Xi Jinping is expected to host counterparts including United States President Barack Obama, Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe.
“Now global economic recovery remains difficult, with downside risks still existing,” China’s Vice-Premier Zhang Gaoli said in a speech formally starting the finance meeting.
The Asia-Pacific region faced challenges including what he described as “policy adjustment of major developed economies”, apparently a reference to the US Federal Reserve’s winding down of the vast bond purchase programme it put in place to fight the global financial crisis.
His comments came a day after China, a major driver of global growth, announced that gross domestic product expanded 7.3 per cent in the third quarter, its slowest pace since the depths of the crisis.
“The Asia-Pacific region is the main driving force and engine for global economic growth,” Zhang said, stressing that the 21 Apec economies account for 40 per cent of the world’s population, 70 per cent of the global economy and 46 per cent of world trade.
Zhang said ministers would be discussing, among other issues, the global and regional economy, infrastructure investment and financing cooperation and fiscal and taxation policy.
Sri Mulyani Indrawati, managing director and chief operating officer at the World Bank, told the meeting that developing economies in the region would remain a mainstay of global expansion.
But she warned of wider global risks, including weakening commodity prices, the Ebola outbreak in west Africa and political instability characterised by the rise of the Islamic State group and the conflict in Ukraine.
“The picture has changed, and 2014 could turn out to be a disappointing year for the global economy,” she said.
“Global growth has been revised downwards and is now expected at 2.6 per cent this year, only marginally up from 2.4 per cent in 2013,” she added, highlighting “a systematic underestimation of global headwinds and inadequacies of policy responses.” AFP