According to a version of the probable final communique of the meeting, the world’s export powerhouses will agree to try to rebalance global trade flows and boost job creation by reducing their trade deficits with their partners.
“Australia, Brazil, Canada, China, Germany, Korea and Indonesia, where public finances remain relatively strong … agree to take discretionary measures to support domestic demand as appropriate,” the draft says.
The leaders of the world’s most powerful economies, who between them account for more than 85 percent of global output, are meeting in the French resort of Cannes to discuss ways of kickstarting growth and heading off recession.
Thursday’s talks were dominated by the eurozone sovereign debt crisis and measures to boost the IMF and the European Union rescue fund, in order to save the EU single currency and protect banks in the event of a Greek default.
On Friday, the powers are due to discuss measures to boost growth, and manufacturers and exporters such as China and Germany are expected to come under pressure to expand domestic demand.
According to the statement, economies “in surplus will adopt macroeconomic policies to move towards more domestic-led growth, thus supporting the global recovery and financial stability.”
The statement, which has yet to be approved, but which has been seen by AFP, also prescribes specific remedies for the top two net exporters.
“Germany will implement measures to promote private consumption and investment … by alleviating inefficiencies that may underpin low investment and high private savings,” it says.
“China will rebalance demand towards domestic consumption by implementing measures to strengthen social safety nets, increase household income and transform the economic growth pattern,” it suggests.
“These actions will be reinforced by ongoing measures to promote greater exchange rate flexibility, to better reflect underlying economic fundamentals and gradually reduce the pace of accumulation of foreign reserves.”
The G20 summit is due to finish on Friday.