G-20 to take up negative economic signs worldwide


Finance ministers and central bank chiefs from the Group of 20 advanced and emerging economies will focus on negative signs in the global economy when their two-day meeting in Moscow kicks off Friday, financial expert Takatoshi Kato says.

“A change has occurred in the world economic outlooks since the previous G-20 meeting in April, and this will be the biggest issue at the coming meeting,” said Kato, president of the Japan Center for International Finance and former vice finance minister for international affairs.

It has become evident that the growth in emerging economies, particularly China, is slowing down, Kato said, pointing out that China faces risks in its shadow banking system and surplus production capacity.

Given the size of China’s huge economy, any big problem there will have a significant impact on the global economy, Kato said.

The anticipated scaling back of the U.S. Federal Reserve’s quantitative easing policy will trigger an outflow of funds from emerging economies, thereby further decelerating their growth, he said, noting that Japan’s radical monetary policy is unlikely to be a hot topic now that the focus is shifting to U.S. policy.