The Finance Ministers and Central Bank Governors of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States met on April 28, 1991, in Washington, D.C. for an exchange of views on current international economic and financial issues. The Managing Director of the International Monetary Fund (IMF) participated in the discussions of the economic situation and outlook in the world economy.

The Ministers and Governors underscored that their countries are part of a highly interdependent global economy in which economic power and responsibility is shared. Accordingly, they reiterated that the pursuit of international economic policy coordination is essential to achieving their common objective of sustained growth with price stability and reaffirmed their support for the policy coordination process.

With this in mind, the Ministers and Governors reviewed the global economic situation and prospects in the aftermath of the Gulf War. They noted the signs of prospective economic recovery and lower inflation in those countries which are in recession. They also noted the persistence of high real interest rates and the slowing of economic activity in those countries which until recently had been experiencing strong expansion.

Against this background, Ministers and Governors emphasized the importance of monetary and fiscal policies which provide the basis for lower real interest rates and a sustained global economic recovery with price stability. They believed that such a medium-term strategy was the best way of reducing potential risks and uncertainties in the current outlook. They reiterated the importance of policies aimed at increasing global savings. They agreed to monitor the situation closely and to take actions as needed within the coordination process with a view to achieving a sound recovery and a growing world economy.

Given the close linkage between trade and growth, the Ministers and Governors also emphasized the importance of bringing the Uruguay Round to a successful conclusion.

The Ministers and Governors also reviewed developments in international financial markets and reaffirmed their commitment to cooperate closely on exchange markets.

The Ministers and Governors welcomed the reform efforts underway in Central and Eastern Europe, and in Latin America, Africa, and Asia. They agreed that a strong global economic recovery and open markets in the major industrial countries will provide necessary support for these efforts. They noted the difficult economic situation in the Soviet Union and the need for sustained economic reforms.

The Ministers and Governors encouraged developing countries to continue the pursuit of market-oriented reforms, and underscored the importance of active IMF and World Bank support for this effort, both through conditionality and financing. In this connection, they reaffirmed their commitment to implement the increase in IMF quotas by the end of the year.

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Source: Canada Department of Finance.