WASHINGTON: US Treasury Secretary Jacob Lew warned the eurozone yesterday to pay heed to the risk of deflation, adding pressure on European authorities and the European Central Bank to boost growth.
“The risk of low demand and the risk of deflation is something they need to be very alert to,” Lew said. Speaking days before Group of 20 finance minister and central bankers meet in Washington, Lew said countries running strong fiscal and trade surpluses should do more to increase demand, to help deficit countries.
“In Europe as a whole, the growth rate is very modest, the risk of deflation is something that has a lot of people concerned,” he said. “There is a demand problem in the world and there is a demand problem in Europe.”.
“There are a number of countries that could do more, and Germany obviously is one of the surplus countries in Europe.”
He suggested that more investment in infrastructure could help boost demand, in turn countering the deflationary pressures from slow growth. AFP
