G-7 pledges joint action to secure global growth from virus impact

04, Mar. 2020

TOKYO, Kyodo - Finance chiefs from the Group of Seven industrialized nations pledged Tuesday to make concerted response in addressing negative impact on the global economy from the coronavirus outbreak but fell short of announcing any immediate action.

"Given the potential impacts of COVID-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks," G-7 finance ministers and central bank governors said in a statement released after their emergency conference call.

The G-7 groups Britain, Canada, France, Germany, Italy, Japan and the United States plus the European Union.

They will "take actions, including fiscal measures where appropriate," with their central banks "supporting price stability and economic growth while maintaining the resilience of the financial system," the statement said, adding they are "ready to cooperate further on timely and effective measures."

[Getty/Kyodo]
[Getty/Kyodo]

Japanese Finance Minister Taro Aso told reporters after the conference call it was "extremely meaningful" that the G-7 delivered a message to financial markets "in such a short period."

"To take all possible measures for global economic growth and stable financial markets, (Japan) will cooperate with other G-7 countries," Aso said.

(Japanese Finance Minister Taro Aso speaks to reporters after a G-7 conference call)
(Japanese Finance Minister Taro Aso speaks to reporters after a G-7 conference call)

Global markets have tumbled sharply amid fears that disruption caused by the outbreak could hurt wider parts of the world economy. A surge of infections outside China, where the virus originated, has dashed hopes the crisis would be addressed soon.

The Organization for Economic Cooperation and Development on Monday lowered its forecast for the world's gross domestic product growth in 2020 to 2.4 percent from an earlier prediction of 2.9 percent, citing the impact of the pneumonia-causing coronavirus outbreak on the manufacturing and travel sectors.

The Paris-based organization said that global growth this year could even drop to 1.5 percent depending on virus-related developments.

The G-7 talks came amid growing expectations that the central banks of major economies may implement measures to stabilize markets.

U.S. Federal Reserve Chairman Jerome Powell suggested in an emergency statement on Friday that the central bank will consider lowering interest rates, saying, "We will use our tools and act as appropriate to support the economy."

Bank of Japan Governor Haruhiko Kuroda issued Monday a rare emergency statement, saying that the central bank "will closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases."

In June 2016, finance chiefs of the G-7 economies affirmed close cooperation to seek financial stability in a joint statement, after Britain's referendum vote to leave the European Union caused turbulence in global financial markets.

The following is the gist of a joint statement released Tuesday by finance chiefs from the Group of Seven industrialized nations following their emergency conference call over impact on the global economy from the coronavirus outbreak.

The G-7 members:

-- are closely monitoring the spread of the virus and its impact on markets and economic conditions.

-- will use all appropriate policy tools to achieve strong and sustainable growth and safeguard against downside risks.

-- will support price stability and economic growth while maintaining the resilience of the financial system.

-- stand ready to cooperate further on timely and effective measures. (Kyodo)