In this file photo Federal Reserve Board Chairman Jerome Powell (R) looks on before a meeting with the Finance Ministers and Central Bank Governors of the G7 nations during the IMF and World Bank Fall Meetings on October 17, 2019 in Washington, DC.Picture: OLIVIER DOULIERY / AFP
In this file photo Federal Reserve Board Chairman Jerome Powell (R) looks on before a meeting with the Finance Ministers and Central Bank Governors of the G7 nations during the IMF and World Bank Fall Meetings on October 17, 2019 in Washington, DC.Picture: OLIVIER DOULIERY / AFP

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, which consists of Canada, France, Germany, Italy, Japan, Britain and the US.

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.

They said they were also providing assistance to help other countries strengthen efforts beat the disease, which has so far infected more than 377,400 people worldwide and killed more than 16,500.

The officials said they were ready to deliver fiscal effort needed to help their economies recover rapidly and resume progress towards sustainable growth, while providing liquidity support to mitigate negative economic effects.

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

A senior Japanese finance ministry official said the group did not agree on any numerical fiscal target for the measures.

Unlike the global financial crisis more than a decade ago, when rescue efforts focused largely on big banks and companies, the G7 is concentrating this time on new policies for employment, working from home and vulnerable populations as well as expanded access to childcare and unemployment benefits.

G7 countries are also providing liquidity enhancements, guarantees, subsidised loans, tax deferrals and loan-repayment deferrals and 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.

Overall, the global financial system today was in better shape to withstand shocks, maintain market functioning, and sustain the supply of financing to support the real economy due to reforms enacted after the global financial crisis.

“We will stay vigilant and take necessary steps to ensure that the financial system can continue to support the economy,” the group said, urging financial institutions to keep lending to consumers and firms harmed by the pandemic.

G7 ministers also called on oil-producing countries to support efforts to promote global economic stability, but did not mention the oil-price war between Saudi Arabia and Russia.

They said they supported efforts by the IMF and the World Bank to respond to the pandemic, and stood ready to contribute further resources to multilateral efforts aimed at helping the most vulnerable and least developed countries.

Reuters