World finance leaders: Growth still weak

WASHINGTON (AP) — While world finance leaders said the global economy has improved slightly this year, they said the outlook for the future was uneven with growth and job creation still too weak.

The policy-setting committee for the 188-nation International Monetary Fund (IMF) said governments need to act decisively to nurture a lasting recovery and restore the resiliency of the global economy.

But the major economies could not reach a consensus on what policies to follow as they move forward.

“The commodity that is in shortest supply now is confidence,” Tharman Shanmugaratnam, the chairman of the IMF panel and Singapore’s finance minister told reporters. “We need to regenerate optimism and confidence.”

The World Bank announced that its steering committee had approved a proposal to establish the goal of eliminating extreme poverty by 2030. The bank defines this condition as living on less than $1.25 a day. The bank estimates there are 1.2 billion people living in extreme poverty, mainly in sub-Saharan Africa and south Asia.

The weekend began with two days of discussions among finance leaders of the Group of 20 nations, composed of major economies such as the United States, Germany and Japan and fast-growing developing nations like China, Brazil and India. The meetings of the IMF and its sister lending institution, The World Bank, followed.

The finance ministers tried to show they were cooperating even though they did not resolve differences that surfaced after an initially flawed bailout of Cyprus in March. The banking troubles on the Mediterranean island renewed fears that a prolonged European debt crisis still posed risks to the global economy.

The US urged European nations to scale back their austerity programs of spending cuts and tax increases in favor of more stimulus to boost growth and combat high unemployment in countries such as Spain and Greece.

But the push was met with resistance from Germany and Britain, which believe heavily indebted European nations must reduce their debts to give markets confidence and keep government borrowing costs low. In the end, the financial leaders sought to bridge the difference by issuing economic blueprints that left room for both the growth and austerity camps to claim victory.

The G-20 nations did reject proposals to issue hard targets for reducing budget deficits, a victory for the US and Japan, which had argued for more flexibility.