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Growth marred by isolationism, terrorism


07-24-2016 12:58 BJT

Full coverage: G20 Hangzhou Summit

Ahead of the meeting of G20 finance ministers and central bank governors, the world underwent volatility with the UK voting to leave the European Union and multiple deadly terror attacks.

The world economy is growing at a slow pace, but even slower is the growth of global trade. In April, the World Trade Organization lowered its expected growth rate from 3.9 percent to 2.8 percent in 2016. It's the third straight year for global trade growing slower than the world economy.

While on the other hand, world economies appear to be moving away from globalization toward relative isolationism. Analysts say the Brexit in June is an obvious sign of such an inclination.

"Migration issue is not having a direct impact on the growth. It's going to take years to digest," said Angel Gurria, secretary-general of Organization for Economic Cooperation & Development.

Under this climate, the sustainable growth of world economy presents a hard test for economic policy makers.

"We realize that the globalization and trade liberalization have positive effect globally....over the couple of days," said Bill Morneau, Canadian Finance Minister.

Increasing terrorism poses another challenge as it casts more uncertainty over economic recovery, and finance leaders are scrambling to find solutions.

"One of the issues that's already on our agenda was looking at how we ensure that there's safeguards against money going to terrorist organizations. That will be discussed with more emergency based on what's emerging right now," Bill Morneau said.

G20 members make up approximately 90 percent of the global gross domestic product and 80 percent of the world trade volume. The world awaits to see what the finance ministers will come up with.

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