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G-20 presses for containing fiscal deficit

Last Updated: Tuesday, November 6, 2012 - 10:25

Zeebiz Bureau

Mexico City: World leaders at the G20 summit pressed for containing the rising fiscal deficit even as their economies continue to grapple with slowdown.

In a communique after a two-day meeting in Mexico, policymakers held, "In light of the weak pace of global growth, they will ensure that the pace of fiscal consolidation is appropriate to support the recovery."

Meeting a day before the US presidential election, which is being disputed largely on tax and spending issues, the Group of 20 countries worried that previous commitments to cut in half the budget shortfalls of advanced economies by the end of next year might hurt the struggling global economy.

IMF Chief Christine Lagarde said, "The objective is for 2013 and there is a slight tendency to overshoot."

While the United States needs to bring its deficits under control -- its budget gap surpassed $1 trillion for the fourth year in a row in fiscal 2012 -- many G20 countries are more worried about a barrage of tax hikes and spending cuts due to take effect from January 1.

They were penciled in last year to show Washington could tackle its deep budget problems. But the so-called "fiscal cliff" could tip the US economy back into recession next year, and hurt world output, unless Congress cuts a deal quickly after the presidential and congressional elections on Tuesday.

With Agency Inputs

First Published: Tuesday, November 6, 2012 - 10:21
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