In the final draft of a Group of 20 finance statement seen by Bloomberg News, officials said that although growth appears to be stabilizing, it "remains low and risks remain tilted to the downside."
"Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks, and stand ready to take further action," according to the statement.
Trade issues dominated discussions as officials gathered in the port city of Fukuoka in southwestern Japan. The meeting opened with news of US President Donald Trump’s reversal of plans for new tariffs on Mexico, offering a sliver of good news for officials facing a lengthening worry list.
The gathering also marked the first meeting of top US and Chinese officials since negotiations between both governments for a trade agreement collapsed last month. Treasury Secretary Steven Mnuchin wrote on Twitter that his talks with People’s Bank of China Governor Yi Gang were constructive and candid.
Behind closed doors, G-20 officials haggled over how to describe their assessment of key challenges including trade disputes, currencies and climate change.
A fifth draft of the communique seen by Bloomberg News on Saturday included a reference to a "pressing need to resolve trade tensions," which was omitted in the final statement.
The language also shifted on currencies. A paragraph that explicitly spelled out the need for countries to avoid competitive devaluations was dropped in preference for a single line reaffirming past commitments.
A reference to a report on climate-related financial disclosures was not included in the final draft.
While past G-20 gatherings such as those in the wake of the global financial crisis led to unified action, fraying alliances and rising populism are making coordinated policy harder.
On the monetary front, there are signs of increasing urgency. In the build up to the meeting, Federal Reserve Governor Jerome Powell signaled a willingness to act if the economy needs it, European Central Bank Governor Mario Draghi vowed to support growth while the PBoC’s Yi said he has ‘tremendous’ policy options to stoke demand.
Australia, India and Chile all lowered interest rates in the past week.
"Central banks are heroes," OECD Secretary General Angel Gurria told Bloomberg Television in an interview during the meetings.
“The question is how much armory do they still have, how many bullets, particularly silver bullets?”
The G-20 communique’s final draft supported a push by Japan’s finance minister Taro Aso for a policy response to aging populations, spanning fiscal and monetary policy to measures on boosting labor force participation.
It also said the G-20 will compete a review of the International Monetary Fund’s quotas by October and will back a push for greater debt transparency.