G20 summit highlights risks to emerging market growth

The Group of 20 summit held at St Pettersburg,Russia from September 5-6th 2013, said on Friday that the work of restoring the global economy to a path of recovery was not complete, and highlighted risks to growth in emerging markets from volatile capital flows.

In a closing summit communique, the passage on the global economy was largely in line with a statement issued after finance ministers and central bankers met in Moscow in July.

Here are main economic challenges highlighted by the G20 leaders:

• Weak growth and persistently high unemployment, particularly among youth, and the need for more inclusive growth in many economies;

• Financial market fragmentation in Europe and the decisive implementation of banking union;

• Slower growth in some emerging market economies, reflecting in some cases the effect of volatile capital flows, tighter financial conditions and commodity price volatility, as well as domestic structural challenges;

• Insufficient levels of private investment in many countries, in part due to continuing market uncertainties, as well as internal rigidities;

• High public debt and its sustainability in some countries that need to be addressed while properly supporting the recovery in the near-term, especially in countries with the highest actual and projected debt to GDP levels;

• Volatility of capital flows as growth strengthens and there are expectations of eventual monetary policy recalibration in advanced economies;

• An incomplete rebalancing of global demand; and

• Continued uncertainties about fiscal policy deliberations

The text made no mention of the Syria crisis, which was discussed by leaders at the annual G20 summit in St. Petersburg, Russia.

George Osborne, the Chancellor, tweeted that a firm timetable had been agreed on an exchange of tax information and tax transparency for the first time at the G20.

He called it a "solid British achievement".

Emerging markets have become unsettled since the US Federal Reserve hinted in July that it could start to reduce its $85bn-a-month stimulus programme. It triggered an exodus of capital from emerging markets and led to a plunge in emerging market currencies, such as the rupee and rupiah, against the dollar.

Next G-20 summit will take place on Brisbane, Australia from Nov 15-16th 2014, and 2015 at Turkey.