While appropriate and credible policies are the basis for economic growth, they need to be backed by high-quality institutions, including ethical standards in corporate governance. However, given the diversity of institutional settings and the success of different economic strategies among G-20 countries, it is acknowledged that there is no single template for strong long-term growth.
Policies need to be shaped to the special circumstances in individual countries. The Accord deems price stability as being indispensable for sustainable economic growth as it fosters investment and saving. High inflation is destabilising and has a strong negative impact on the poor, while deflation squeezes profits, discourages investment and leads people to postpone spending.