G20 meeting warns of challenges for global economy in 2015

Financial officials and policymakers attending a Group of 20 (G20) ministerial meeting have warned that weak growth and diverging monetary policies among major economies may make 2015 a difficult year for the global economy.

While addressing financial officials and bankers from more than 40 countries just ahead of the first Ministerial Meeting of the Turkish G20 Presidency, Chinese Deputy Finance Minister Zhu Guangyao highlighted risks for the world economy and called on joint efforts to face the challenges.

"The sluggish global growth is a real challenge faced by all members of G20," Zhu said, referring to the downgrade of global economic growth from 3.8 percent to 3.5 percent in January by the International Monetary Fund.

Diverging monetary policies and the fall of oil prices are risks causing global economic turbulence, Zhu said.

The U.S. Federal Reserve has completed its asset purchase program and is expected to raise interest rates in the middle of this year, while on the other side of the Atlantic, the European Central Bank (ECB) has recently cut interest rates to boost the economy.

Diverging monetary policies could also be observed among leading emerging economies, as China recently lowered deposit reserve rates ahead of the Lunar New Year in a bid to meet "seasonal need of extra cash," weeks after India decided to cut interest rates amid lower-than-expected inflation figures and plunging oil prices.

Meanwhile the rapid drop in the prices of oil and other commodities triggered a surge of inflation for exporters such as Russia and Brazil forced these economies to raise interest rates.

The economic slowdown in Europe is another risk to the global economy as Greece casts additional uncertainties to the euro zone, Zhu said.

IMF Managing Director Christine Lagarde expressed similar concern.

"There is a lot at stake ... Without action, we could see the global economic supertanker continuing to be stuck in the shallow waters of sub-par growth and meager job creation," she said in a blog on the IMF website

In a bid to make a previous action plan to boost growth more efficient, financial leaders attending the G20 meeting will work to shortlist growth priorities for each member.

Last year, leaders of the G20 leading economies vowed to take measures to achieve additional two percentage points in their collective GDP growth over the next five yeas.

The hundreds of commitments entailed in the Brisbane Action Plan will be narrowed down to only 5-10 priorities per country so that actual progress could be easily checked, officials said.