Shanghai: The Organisation for Economic Cooperation and Development (OECD) called on Friday on the world's 20 biggest economies to step up the slowing pace of reforms to boost economic growth amid sluggish trade and weak investment.
Finance ministers and central bank governors of the 20 biggest economies, the G20, are meeting in Shanghai over the weekend to address the weaker global growth outlook.
"Global growth prospects remain clouded in the near term, with emerging-market economies losing steam, world trade slowing down and the recovery in advanced economies being dragged down by persistently weak investment," the OECD said.
"The case for structural reforms, combined with supporting demand policies, remains strong to sustainably lift productivity and the job creation," said the OECD report, prepared for the G20 meeting.
The organisation has a task of monitoring reforms in the G20 to help the group deliver on its pledge from 2014 that they will increase global economic growth by two percentage points by 2018 through a series of coordinated structural adjustments to their economies.
At the time, all G20 countries together pledged to deliver some 800 reforms in total, but their implementation is lacking, the head of the OECD Angel Gurria told a news conference on the sidelines of the G20 meeting.
"Just at the time when we need it more, when we need to accelerate reform, there is a deceleration of reform," Gurria said. "The question is how do we get the appetite, the conviction for the reform process going."
"The problem is it is not happening, even that two percent we agreed on is not happening," Gurria said. "That is something we are very worried about."
The OECD said that the pace of reform was generally higher in Southern European countries like Italy and Spain, than among Northern European countries. Outside Europe, the reform leaders were Japan, China, India and Mexico.
The slower-than-expected growth, especially in the world's second-biggest economy China, has added to uncertainty and volatility on financial markets, as ultra low or even negative interest rates have not provided the expected growth stimulus yet, but have already reduced returns on investment.
"Financial markets are increasingly volatile as capital searches for both yield and safety," the OECD said.
"Getting back to healthy and inclusive growth calls for urgent policy response, drawing on monetary, fiscal, and structural policies working together," the report said.
G20 financial leaders will discuss on Friday and on Saturday how to better coordinate their policy response by trying to identify which policy areas and which countries still had room for manoeuvre to do more.
"This 2016 Going for Growth report underscores the importance of synergies among policies in designing policy packages," the OECD said.
Germany, with a fiscal surplus, a huge current account surplus of more than eight per cent of GDP and relatively low investment, is likely to be asked to step up spending, G20 officials said.