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G7 officials vow to maintain fiscal, monetary expansion to beat coronavirus

International Business
Tue, 24 Mar 2020

Washington: G7 finance ministers and central bank governors on Tuesday pledged to expand fiscal and monetary actions for as long as necessary to restore growth and confidence battered by the coronavirus pandemic.

In a statement on Tuesday, the Group of Seven advanced world economies said: "We will do whatever is necessary to restore confidence and economic growth and to protect jobs, businesses, and the resilience of the financial system. We also pledge to promote global trade and investment to underpin prosperity."

Weekly meetings would continue, said the G7, comprising Canada, France, Germany, Italy, Japan, Britain and the United States.

The finance officials highlighted the urgent need to boost support for the rapid development, manufacture and distribution of diagnostics, therapeutics and a vaccine for COVID-19, the disease caused by the virus.

They were also providing assistance to help other countries strengthen efforts to beat the disease, the group said, which has now infected more than 377,400 people across the world and killed over 16,500.

The officials said they were ready to deliver the fiscal effort necessary to help their economies rapidly recover and resume the path toward sustainable growth, while providing liquidity support to mitigate the negative economic impacts.

The group's response includes efforts to help businesses and individuals survive the pandemic and the downturn it is causing.

Unlike the global financial crisis of 2007-2008, when efforts were largely focused on big banks and companies, this crisis has forced the G7 to focus on new areas such as aid for employment, working from home, and vulnerable populations, and expanded access to childcare and unemployment benefits.

The ministers said they were also providing liquidity enhancements, guarantees, subsidised loans, tax deferrals, and loan repayment deferrals and, where appropriate, grants for affected companies, especially small and medium-sized businesses.

On the monetary front, G7 central banks were taking exceptional action to support economic and financial stability and improve liquidity, including through swap lines among central banks, the statement said.

"We pledge to maintain expansionary policies for as long as needed and stand ready to take further action, using the full range of instruments consistent with our mandates," it said.