WASHINGTON (Reuters) - Financial leaders from the Group of 20 nations said on Friday (April 15) they were heartened by a recent recovery in financial markets, but warned that global growth was "modest and uneven" and threatened by weakness in commodities-based economies.
In a communique issued after their meeting in Washington, G-20 finance ministers and central bank governors repeated their pledge to refrain from competitive currency devaluations, but offered no new initiatives to keep growth from stalling.
The G-20 officials took a slightly more positive view on financial markets, which they said had mostly recovered from sharp selloffs earlier this year and were in better shape since they last met in Shanghai in February.
"However, growth remains modest and uneven, and downside risks and uncertainties to the global outlook persist against the backdrop of continued financial volatility, challenges faced by commodity exporters and low inflation," they said.
The communique also pointed to Britain's possible exit from the European Union, geopolitical conflicts, terrorism and refugee flows as complications for the global economic landscape.
The statement repeated G-20 pledges to "use fiscal policy flexibly" to strengthen growth, job creation and confidence. It kept language that member countries "will continue to explore policy options," adding that they would be "tailored to country circumstances."
The G-20 nations also maintained their previous pledges to consult closely on exchange rates. "We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluation and we will not target our exchange rates for competitive purposes. We will resist all forms of protectionism," they said.
The G-20 gathering, the highlight of the International Monetary Fund and World Bank spring meetings in Washington, came amid growing pressure on richer nations to boost infrastructure spending, deregulate industries and spur employment.
Earlier this week the IMF cut its 2016 growth forecast for the world economy, the fourth such move in less than a year.
The meetings this week also coincided with weakness in a number of key commodity-based economies, particularly Brazil, which is enduring its worst recession in decades.
After release of the so-called "Panama Papers" earlier this month stirred up controversy over global elites' widespread use of off-shore tax havens to shield their wealth, the G-20 officials strengthened their pledge to implement measures to combat exploitation of tax law mismatches and improve tax information sharing.
They said "defensive measures will be considered by G20 members against non-cooperative jurisdictions" if progress towards these goals is not made.
Despite the repeat of currency pledges, differences over exchange rates, particularly a weaker dollar, and negative interest rates at some central banks were readily apparent at the Washington meetings.
Japanese Finance Minister Taro Aso said he told US Treasury Secretary Jack Lew of his concerns about the yen's recent rise against the dollar to 17-month highs.
"I told (Lew) that excessive volatility and disorderly currency moves would have a negative impact on the economy. I also expressed deep concern over recent one-sided moves in the currency market," Aso said.
German Finance Minister Wolfgang Schaeuble this week has warned of the fallout from the European Central Bank's negative rate policies, saying it would hurt bank profitability and German savers.
In a statement to the G-20 on Thursday night, Indian Finance Minister Arun Jaitley said governments should stop relying on central banks to spur growth and should consider more infrastructure spending and take steps to boost flagging trade.
"We feel that the efficacy of monetary policy instruments has reached its limits and that its pass-through has not been seamless," Jaitley said.
"The time is ripe for a re-evaluation of the fiscal policy space, with a greater focus placed on public investment."
As leaders discussed the potential costs of a referendum vote in Britain on June 23 to leave the EU, an ECB council member said the UK financial sector should not get any "special concessions".
"If the UK is not a member of the European common market any more, it is clear that there will need to be a complete separation," Austrian central bank governor Ewald Nowotny said.