The world must not be complacent on the economic front just as countries cannot afford to relax in the health fight against coronavirus, Australia’s treasurer has told his foreign counterparts.
Josh Frydenberg discussed the state of the global economy again with his G20 colleagues overnight on Wednesday.
“The world will judge the G20 on our ability to ensure global economic and financial stability throughout this unprecedented crisis,” Mr Frydenberg told the meeting.
Governments had to remain responsive, flexible and ready to do more and to make sure that finance was available to all countries.
“Now is not the time for complacency given how rapidly this situation has evolved and how far into uncharted territory this virus has taken us,” the treasurer said.
“As we take actions to safeguard our economies, we must resist the temptation to take measures which constrain global supply chains and restrict trade, especially for vital medical supplies and other essential goods.
“Such commitments will give markets the investment certainty and confidence they need during these challenging times.”
As part of the overnight conference, the G20 nations also agreed to immediately suspend billions of dollars in debt payments for the world’s poorest countries.
Saudi Finance Minister Mohammed al-Jadaan said after the meeting, “All bilateral official creditors will participate in this initiative, which is an important milestone for the G20.”
The G20 didn’t say how many countries would be impacted, but French Finance minister Bruno Le Maire says 76 countries were eligible to the moratorium.
Meanwhile, Frydenberg applauded the toolkit that the IMF, the World Bank and other multilateral organisations had assembled.
Mr Frydenberg also expressed his pleasure that countries had been able to work collaboratively and in record time to coordinate the actions of central banks so as to stabilise markets and improve access to emergency financing.
The IMF forecast the Australian economy would shrink by 6.7 per cent this year then grow 6.1 per cent over 2021, ultimately leaving it smaller than it was at the end of 2019.
Unemployment was tipped to rise to an average of 7.6 per cent in 2020 and 8.9 per cent in 2021.
But Mr Frydenberg said these figures didn’t take into account the full extent of Australia’s support package and its efforts to flatten the rate of coronavirus infections.
Treasury is working on its own forecasts of the impact on GDP.
Mr Frydenberg will follow up the G20 meeting with another with his counterparts involved in the IMF on Thursday night.
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