## What the G20 Can Do to Help the Global Recovery

_IMF Blog, February 24, 2016_

## Source details

**Canonical URL:** [What the G20 Can Do to Help the Global Recovery](https://www.imf.org/en/blogs/articles/2016/02/24/what-the-g20-can-do-to-help-the-global-recovery)

## Other formats

- [Markdown version](/en/blogs/articles/2016/02/24/what-the-g20-can-do-to-help-the-global-recovery/index.md)
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## Bibliographic details
- Authors: iMFdirect
- Published: February 24, 2016

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### Context and timing
- Publication: iMFdirect, February 24, 2016.
- Versions available in عربي and Español.
- Event: First ministerial meeting under China's Group of Twenty presidency in Shanghai (finance ministers and central bank governors).
- Background note for the meeting: "Global Prospects and Policy Challenges" (referred to as the G20 Note).

### Diagnosis — why weaker growth?
- The G20 Note identifies several factors contributing to a tepid global recovery:
  - Concerns about the global impact of China’s transition to more balanced growth.
  - Signs of distress in other large emerging markets, including effects from falling commodity prices.
  - A rise in global risk aversion, leading to substantial declines in equity markets.
  - Additional potential shocks of non-economic origin (geopolitical conflicts, refugees, terrorism, global epidemics) that could significantly impact economic activity.
- Conclusion from the G20 Note: "There is less room for complacency now."

### Policy recommendations — national level
- General prescription:
  - Use a mix of demand support and structural reform; if done right, these policies will re-enforce each other and create stronger and more sustainable growth.
- Role of monetary policy:
  - Accommodative monetary policy remains very much needed, but "cannot do it alone."
- Fiscal policy and balance sheet repair:
  - Include fiscal policy where there is fiscal space.
  - Emphasize balance sheet repair.
- Advice for emerging market commodity exporters affected by lower commodity prices:
  - Where feasible, make use of fiscal buffers.
  - Let the exchange rate help with the adjustment.

### Policy recommendations — multilateral / G20 level
- Urgency of coordination:
  - The G20 must plan now and proactively identify policies that could be rolled out quickly if downside risks materialize.
- Collective efforts recommended in the G20 Note:
  - Enhance the global financial safety net.
  - Ring-fence spillovers from non-economic shocks.

### Key institutional and attributional information
- The IMF is based in Washington D.C. and is "an organization of 191 countries, working to foster global monetary cooperation and financial stability around the world."
- About the blog: IMFBlog is a forum for the views of IMF staff and officials on pressing economic and policy issues of the day.
- Disclaimer: "The views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board."

*Source: iMFdirect article "What the G20 Can Do to Help the Global Recovery", February 24, 2016.*

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## References

- [عربي](http://blog-montada.imf.org/?p=4039)
- [Global Prospects and Policy Challenges](http://www.imf.org/external/np/g20/022616.htm)
- [refugees](http://www.imf.org/external/np/sec/pr/2016/pr1613.htm)

_Source: https://www.imf.org/en/blogs/articles/2016/02/24/what-the-g20-can-do-to-help-the-global-recovery_