The final communique from the two-day meeting of G20 finance ministers and central bankers in Sydney said they would take concrete action to increase investment and employment, among other reforms, signalling they believe that the worst of the financial crisis is being left behind.

The group, which accounts for around 85% of the global economy, have embraced a goal of generating more than $2 trillion in additional output over five years while creating tens of million of new jobs.The growth plan borrows much from an IMF paper prepared for the Sydney meeting, which estimated that structural reforms would raise world economic output by about 0.5% per year over the next five years, boosting global output by $2.25 trillion

We will develop ambitious but realistic policies with the aim to lift our collective GDP by more than 2 percent above the trajectory implied by current policies over the coming 5 years

As yet there is no road map on how nations intend to get there or repercussions if they never arrive ( no surprises there then). The aim is to come up with the goal now, then have each country develop an action plan and a growth strategy for delivery at a November summit of G20 leaders in Brisbane.

Australian Treasurer Joe Hockey, who hosted the meeting, sold the plan as a new day for cooperation in the G20 and said

Each country will bring its own plan for economic growth.Each country has to do the heavy lifting.

The plan all sounds complete pie-in-the-sky somewhat optimistic to me, to say the least, at a time of huge uncertainty still.

Indeed, German fin min Wolfgang Schaueble warned afterwards

What growth rates can be achieved is a result of a very complicated process.The results of this process cannot be guaranteed by politicians.

Other highlights include

  • recent volatility in financial markets, high levels of public debt, continuing global imbalances and remaining vulnerabilities within some economies highlight that important challenges remain to be managed
  • we recognise that monetary policy needs to remain accommodative in many advancedeconomies, and should normalise in due course, with the timing being conditional on the outlook for price stability and economic growth.
  • exchange rate flexibility can also facilitate the adjustment of our economies. Some economies may need to rebuild fiscal buffers where policy space has eroded

More info at the G20 website and the full communique here