Japan’s Noda downplays chance of G20 current account deal

By Stanley White

TOKYO (BestGrowthStock) – Japanese Finance Minister Yoshihiko Noda played down prospects on Tuesday of Group of 20 countries agreeing specific numerical targets for current account balances as leaders struggle for consensus on how to rebalance the global economy.

South Korean President Lee Myung-bak, who will host a G20 leaders’ summit in Seoul on November 11-12, hopes for agreement on specific targets to lower current account surpluses in export-oriented economies within a few months, Japanese business newspaper Nikkei reported on Tuesday.

The United States, which originally floated the idea of guiding China’s current account surpluses to 4 percent of gross domestic product to reduce its reliance on external demand, has backed away from numerical targets after objections from China and other emerging economies.

“When it comes to specific numbers and the question of whether this will be decided at Seoul, we have to keep in mind that each country’s circumstances are different,” Noda said.

“It’s more likely that countries will agree a common approach, and finance ministers from the member countries will debate the details later,” he told reporters after a cabinet meeting.

G20 finance chiefs agreed last month in the South Korean city of Gyeongju to shun competitive currency devaluations and to adopt “indicative guidelines” for current account balances.

The guidelines are intended to achieve an often-debated goal of reducing excess consumption in countries that run current account deficits and encouraging domestic demand in exporters with large current account surpluses.

Policymakers have clashed over whether numerical targets are workable in the long term.

(Editing by Michael Watson)

Japan’s Noda downplays chance of G20 current account deal