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Quantitative growth targets 'problematic': Bundesbank

FRANKFURT - Setting quantitative growth targets for the global economy is "problematic," but a pledge by the world's biggest economies to boost global growth is positive, a top ECB official said Monday.

"I feel that setting quantitative growth targets at the level of the G20 (Group of 20) is problematic for various reasons," the head of the German central bank or Bundesbank, Jens Weidmann, told the daily Die Welt in an interview.

However, "initiatives to boost investment, employment and growth are fundamentally positive. And that’s why the Australian initiative should be welcomed," said Weidman, who as head of the German central bank sits on the European Central Bank’s governing council.

At a meeting in Sydney, Australia at the weekend, the world’s 20 biggest economies vowed to boost global growth by more than $2 trillion over five years, shifting their focus away from austerity as a fragile recovery takes hold.

Finance ministers and central bank governors from the Group of 20, which accounts for 85 per cent of the world economy, issued an unusually brief two-page statement to drive "a return to strong, sustainable and balanced growth in the global economy".

Germany and its central bank have long been perceived as favouring austerity rather than growth.

Weidmann told the newspaper that "the most important thing is that countries do their economic homework.

"Instead of setting goals for variables which cannot be steered politically, anyway ... concrete measures should be taken that ensure a growth-friendly environment allowing companies to invest and recruit employees. The G20 statement takes this into account," Weidmann said.

AFP


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