G20 agrees to delay exit strategies until private sector recovers

Finance ministers and central bank governors from the Group of 20 nations agreed Friday to keep stimulus measures in place until the recovery of the private sector is confirmed, Yonhap news agency said Saturday.

The news report said G20 finance ministers and central bank governors also vowed to complete the quota and governance reform of the International Monetary Fund by November, when their leaders gather in South Korea, quoting the communique issued in Washington.

James Flaherty, Canada's finance minister, right, listens as Yoon Jeung- Hyun, South Korea's finance minister, speaks at a news conference during the Group of 20 Finance Ministers and Central Bank Governors' meeting in Washington, D.C., U.S., on April 23, 2010. (Bloomberg)

"The global recovery has progressed better than previously anticipated largely due to the G-20's unprecedented and concerted policy effort. However, it is proceeding at different speeds within and across regions and unemployment is still high in many economies," said the communique read by South Korean Finance Minister Yoon Jeung-hyun during a joint press conference with his Canadian counterpart, James Flaherty. Yoon served as a subcommittee chairman during the Washington gathering.

"We recognize that in such circumstances, different policy responses are required. In economies where growth is still highly dependent on policy support and consistent with sustainable public finances, it should be maintained until the recovery is firmly driven by the private sector and becomes more entrenched," it added.

The communiqué came as debate is growing over the right timing of rolling back stimulus measures taken to fight the global recession in the wake of the global financial crisis in 2008.

Regarding bank levy, Yoon said the South Korean government supports the idea of taking “proper measures” against excessive liquidity expansion of financial institutions.

However, such measures should be carefully implemented not to hurt the real economy, he said.

He projected that G20 finance ministers and central bank governors will discuss details of bank levy in June in Busan.