Central bankers and finance ministers from China, Japan and South Korea said on Sunday they remained committed to policies to support demand in the face of moderate and uneven global growth.
The policymakers for the three North Asian economies held a trialateral meeting, chaired by Japan’s Deputy Prime Minister and Finance Minister Taro Aso, on the sidelines of an Asian Development Bank Meeting in Baku, Azerbaijan.
Their joint statement noted that global economy was passing through an uncertain phase, and growth remained moderate and was following divergent paths.
“We are committed to continue implementing timely and effective macroeconomic policies in order to help boost demand,” the statement said.
“Structural reforms to increase potential growth should continue to remain a high priority for a sustainable and balanced growth.”
The statement also urged a caution in monetary policy.
“In an uncertain environment of global economy, monetary policy settings should be carefully calibrated and clearly communicated to minimize negative spillovers,” it said.
Many economists have warned that expected interest rate hikes by the U.S. Federal Reserve at a time when many other central banks continue to pursue loose monetary policies could cause volatility in capital flows and exchange rates.
“When dealing with possible macroeconomic and financial stability risks arising from volatile capital flows, the necessary macroeconomic policy adjustments could be supported by macro-prudential policies,” the statement said.
For many years the engine of global economic growth, Asian economies are struggling to maintain momentum.
Growth in China, the world’s second largest economy, slipped to a six-year low of 7.0 percent in the first quarter.
Japan, the third largest economy, rebounded from recession in the final quarter of last year, but the 2.2 percent growth was still regarded as subdued, and the economy has some way to go before fully emerging from years of debilitating deflation.
South Korea’s Finance Minister Choi Kyung-hwan told journalists in Baku that his country’s growth rate this year was likely to be similar to the 3.3 percent growth posted in 2014. He said policymakers were likely to wait until the end of June before assessing whether more stimulus measures were needed.
The four-day annual meeting of the ADB’s board of governors began on Saturday.