ISTANBUL
A high-profile meeting of G20 finance ministers in Istanbul has heard calls for "price stability" from Turkey's central bank governor amid news on Monday that the country's currency had lost 3 percent of its value against the U.S. dollar.
The Istanbul gathering has been the first for finance ministers and central bank governors since Turkey became 2015 president of the G20 after it took over the post from Australia on Dec. 1, 2014.
Deputy Prime Minister Ali Babacan said on Monday that Turkey would use the G20 presidency to attach "much more importance to low-income developing countries" and would bring their difficulties to the table this year.
Speaking at a meeting organized by the Institute of International Finance in Istanbul, Turkish Central Bank head Erdem Basci said that inflation and deflation are two factors that weaken growth.
"Price stability is the best way to support growth for central banks," Basci said, adding that reforms to Turkey’s labor force, labor market, technology and hard infrastructure would enhance the country’s growth potential.
Basci was speaking as the lira fell to 2.4952 against the dollar on Monday, meaning the Turkish currency has lost more than 3 percent since reaching 2.4174 against the dollar in mid-December.
Deputy Prime Minister Babacan told reporters at the launch of a new OECD growth report that Turkey wants to set clear goals for G20 countries’ investment commitments, even though it is “not clear” if all members of the international body want to set such targets.
Babacan was speaking at the launch of a new OECD growth report.
Although G20 countries last year pledged to tackle sluggish growth, boost investment and create jobs to add up $2 trillion to global GDP – while increasing the growth rate by 2 percent – not all are willing to commit to set goals.
"Whether all 20 countries are committed to internationally abide themselves to concrete investments... we do not know yet," Babacan said.
OECD secretary general, Angel Gurria, said some countries found it difficult to take measures over which they have not full control, adding that cross-border finance also made it difficult for some G20 countries to adhere to set investment promises.
Monday’s OECD report says the pace of policy reforms, which are seen as vital to boosting productivity and jobs, has slowed in most advanced economies.
The issue of change was also highlighted by Italy’s finance minister who said that Europe needs to “be brave” and implement more structural reforms.
Pier Carlo Padoan said that European Union countries had been struggling to cope with recession and inflation over the past years, adding that the continent “needs more investments, more structural reforms and sound public finances across Europe.”
The Italian minister was speaking amid an ongoing stand-off between Greece’s newly elected anti-austerity government and eurozone leaders over the country’s ailing and indebted economy.
Padoan added that investment would be the EU’s priority in 2015.
"Europe always succeeded when it used to implement integration and liberation... Today we should be a bit more brave, take risks and support growth," he said.
However, Bank of England Governor Mark Carney warned countries against what he called "structural reform fatigue."
Carney, saying that structural reforms are the most compelling ones, said that they yield more in years but require time and passion.
