G24 demands more actions on investments, productivity

MANILA, Philippines - The Group of 24, a group of developing countries including the Philippines, has urged policymakers to take further actions on increasing investments in infrastructure and raising productivity.

In a report  following the 2014 Annual Meetings of the International Monetary Fund and the World Bank Group, the G-24 member countries stressed the need for reforms and to further grow their economies despite the strong fundamentals they enjoy today.

“Despite a prolonged period of very low interest rates in AEs (advanced economies), robust recovery has not materialized, which emphasizes the importance of deeper structural reforms and more supportive fiscal policy, including through infrastructure investment,” the G-24 said.

“In order to ensure that our own countries are on a robust long-term growth path, we will continue to pursue measures to increase investment in infrastructure and raise productivity, create jobs and accelerate structural transformation, recognizing that this  will involve policy challenges that will vary across countries,” the group added.

G-24 members also underscored the importance of bringing down inequality and marginalization among emerging markets and economies, as well as in advanced economies.

“We are committed to a broad range of actions to support more inclusive growth and create more and better quality jobs, including investing in skills, education and health, facilitating labor mobility and improving social safety nets,” the G-24 said.

“We also support further work by the WBG (World Bank Group) on mainstreaming policies to address climate change and gender equality,” the group added.

Nevertheless, the group has recognized that despite the slowing global economy, growth in emerging markets remained robust amid strong macroeconomic fundamentals.

“Notwithstanding these generally strong fundamentals, global economic headwinds arising from the slower than expected growth in the euro area and Japan, and in some EMDCs (emerging markets and developing countries), have affected global growth,” the G-24 said.

The IMF, in its latest World Economic Outlook, has cut its forecast for this year’s global output to 3.3 percent from a July projection of 3.4 percent. The Fund also lowered its 2015 global economic growth estimate to 3.8 percent from four percent.

“Global growth forecasts have been revised downward for the remainder of 2014 and for 2015, and important downside risks have risen with potentially large spillovers on EMDCs,” the G-24 said.

“These include risks from disruptive capital flows and exchange rate volatility associated with the exit from unconventional monetary policy in major advanced economies, rising geopolitical tensions, and risks from a sharp correction in financial markets,” the group said.

The IMF last week slashed its 2015 economic growth forecast for the Philippines to 6.3 percent from 6.5 percent but kept its 2014 projection at 6.2 percent.

The Philippine economy grew by 6.4 percent in the second quarter, faster than the 5.6 percent recorded in the first quarter.

The government hopes to expand the economy by 6.5 to 7.5 percent this year from the 7.2 percent recorded in 2013.