Indeed, in the current environment of weak demand, near-term fiscal consolidation could threaten the economic recovery, which in turn may undermine the success of the fiscal strategy.
In such circumstances, economies with the capacity to stimulate global growth – namely, countries with large current account surpluses and the potential to expand domestic demand – must take a leading role in adopting policies to rebalance and sustain the global economy. This commitment was made by all of the G-20 leaders, including those from China, Indonesia, South Korea, and other emerging markets.