No surprise from the G20

Economic outlook - 29/02/2016

Finance ministers and central bankers from the 20 most powerful countries in the world met in Shanghai on 26-27 February.

With the year still young, oil prices are extremely low, foreign trade lacks punch, stock indices are sharply down and global tensions show no signs up abating. The participants’ goal was therefore clear: to coordinate their actions in order to stimulate global economic activity, whose growth level is "uneven and falls short of our ambition", and, if possible, to placate the markets.

Several key points emerged from these two days of discussions:
1. fiscal policies will be relaxed in an effort to boost demand, in particular in countries with a budget
2. the major central banks will continue or even expand their ultra-loose monetary policy
3. China, like the other great powers, confirmed its intention not to devalue its currency, in order to
avoid a currency war
4. Brexit would be a shock, and the risk of it happening must be taken seriously5. the systemic risks associated with the FinTech sector (new financial technologies) must be closely

The contents of the final communiqué were broad enough to make everyone happy, including Germany, for
whom fiscal and monetary stimulus policies have "reached their limits" and "may even be
counterproductive". However, the vague consensus relayed by this statement does not play well to
investors. When the markets opened this morning, the main equity indices were down and bond
yields were slipping.

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