G20 officials decry lack of global growth

Updated 21 April 2013
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G20 officials decry lack of global growth

WASHINGTON: World finance leaders say they are determined to attack a sluggish global economy in which growth is too weak and unemployment too high. Their problem is arriving at a consensus over the proper mix of policies.
Finance ministers and central bank presidents from the world’s biggest economies issued a joint statement that papered over stark differences between opposing views.
The US and other countries are pushing for less budget austerity and more government stimulus while Germany and others contend that attacking huge budget deficits should be job No. 1.
The discussions were scheduled to wrap up yesterday with meetings of the steering committees of the 188-nation International Monetary Fund and its sister lending agency, the World Bank.
Finance Minster Ibrahim Al-Assaf was leading the Saudi delegation at the G20 and IMF/World Bank meetings in Washington.
On the sidelines of the sessions, he held separate bilateral talks with British Finance Minister George Osborne, Tunisian Development and International Cooperation Minister Al-Ameen Al-Daghri, Pakistan’s Finance Minister Shahid Amjad and Sri Lankan Finance Minister Sarath Amunugama, Zambian Finance Ministe Minister Alexander Shekotada.
The G-20 joint statement revealed no major new policy initiatives and sought to straddle the divide in the growth-and- austerity argument.
The US is being represented at the talks by Treasury Secretary Jacob Lew and US Federal Reserve Chairman Ben Bernanke.
“Strengthening global demand is imperative and must be at the top of our agenda,” Lew said in remarks before the IMF policy-setting group. “Stronger demand in Europe is critical to global growth.”
However, other nations, led by Germany, have resisted a move away from austerity programs, saying it is critical to keep making progress in getting government deficits under control.
German Finance Minister Wolfgang Schaeuble apologized to a Washington audience for being late for a speech after the G-20 discussions, saying, “On reduction of indebtedness ... we have a little bit of differences of opinion all over the world, to be very frank, and that’s the reason I am a little bit late.”
Dutch Finance Minister Jeroen Dijsselbloem, the head of the Eurogroup, encompassing the 17 finance ministers whose countries use the euro currency, said that European nations needed to keep pushing to reduce huge budget deficits but “we can and will adjust” the speed that the deficit cuts are implemented to take into account economic conditions.
The G-20 joint statement singled out the recent aggressive credit-easing moves pushed by Japanese Prime Minister Shinzo Abe, saying they were intended to stop prolonged deflation and support domestic demand.
Those comments were viewed as giving a green light to Japan’s program, which has driven the value of the yen down by more than 20 percent against the dollar since October. That sizable decline has raised concerns among US manufacturing companies that Japan’s real goal is not to fight deflation, a destabilizing period of falling prices, but to weaken the yen as a way to gain trade advantages.
To address those concerns, the G20 did repeat language it used in February that all countries should not use their currency as a trade weapon and guard against policies that could trigger currency wars.
Japanese officials told reporters following the discussions that they were pleased by the support the G20 had given them to pursue growth policies in an effort to lift the world’s third-largest economy out of its two-decade slump.
Haruhiko Kuroda, head of the Bank of Japan, said: “There has been international understanding and acceptance of this, so we can have further confidence to appropriately conduct monetary policy.”
The G-20 statement also said that there was an urgent need for the 17-nation euro currency area to move toward a banking union and reduce the “financial fragmentation” that now exists.
The communique said that “more needs to be done to address the issues of international tax avoidance and evasion in particular through havens.”
The financial crisis that hit the Mediterranean island of Cyprus earlier this year revived concern over countries that serve as tax havens.
In Cyprus, banks held more than $ 162 billion in assets, or roughly seven times the country’s total GDP. Much of that money came from wealthy Russian investors.


New designer’s ranges help lift sales at Burberry

A window of a Burberry store in central London, UK. The brand said new products accounted for about half the wares in its shops by the end of June. (Reuters)
Updated 17 July 2019
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New designer’s ranges help lift sales at Burberry

  • Fashion label more than a year into an overhaul to take it more upmarket

LONDON: British luxury brand Burberry reported a pick-up in first quarter sales after it began shifting more new designs by creative chief Riccardo Tisci into its stores as part of a turnaround plan.

The fashion label is more than a year into a high stakes overhaul by CEO Marco Gobbetti aimed at taking Burberry more upmarket  and reviving its image, including with edgier takes by Tisci on some of its classic products such as the trench coat.
The brand said new products had accounted for around half the wares on offer in its shops by the end of June, more than some analysts had expected.
This helped to lift same store sales by 4 percent — following lacklustre growth of 1 percent in the previous three months and topping market expectations of around 2 percent — and its gamble on a new designer appeared to be paying off for now.
“The consumer response was very promising, delivering strong growth in our new collections,” Gobbetti said in a statement.
Burberry has in recent quarters lagged the performance of luxury industry leaders like LVMH’s Louis Vuitton or Kering’s Gucci, which benefited from thriving demand in China in spite of US trade tensions.

FASTFACT

Thomas Burberry was just 21 years old when he established the company of the same name in 1856.

Those firms are due to post sales for the April to June quarter next week.
The pace of Burberry’s revenue growth within China and more broadly across Asia also improved slightly, despite slowing Chinese economic growth.
Its revamp has included rolling out a new logo-style print, or monogram, it hopes will catch on as it works on extending its reach in high-margin handbags; and it is redesigning stores as well as making a big marketing push with social media campaigns.
The company maintained its forecast for broadly stable revenue and operating margin at constant exchange rates for the 2020 financial year. Revenue and operating profit are not expected to pick up in a more meaningful way until 2021.