Safeguard and strengthen global recovery: Obama

Ahead of the G-20 meeting in Toronto on 26-27th June, the US President Barack Obama has written to its member country leaders, urging them to take steps to safeguard and strengthen global recovery.

In his letter, dated June 16, Obama urged the leaders including Indian Prime Minister Manmohan Singh to consider safeguarding economy recovery as their highest priority.

"We worked exceptionally hard to restore the growth, we cannot let it falter or lose strength now. This means that we should reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong," Obama said in his three-page letter.

"Our ability to achieve a durable recovery depends on our ability to achieve a pattern of global demand growth that avoids the imbalances of the past," he wrote.

The US President vowed to cut the US budget deficit to half by 2013 and to an "acceptable level" of three per cent of gross domestic product by 2015.

However, he supported short- term spending measures to keep the world's largest economy afloat to avoid the economic hardship caused by hasty withdrawal of stimulus.

Obama observed a strong and sustainable global recovery was reliant on balanced global demand while significant weaknesses continued to exist across G-20 countries.

The US President expressed concern on the weak private sector demand in some countries and who despite having large external surplus continued to rely on exports to spur their economic growth.

Without referring to the fixed exchange rate of Chinese currency, Yuan or Remnibi, Obama said market-determined exchange rates were necessary to global economic activity.

He said the US was committed to the restoration of its fiscal sustainability and all G-20 countries needed to put credible and growth-friendly plans to restore sustainable public finances.

"In Toronto, I also look forward to working on our action agendas on issues ranging from energy and development to governance reform of international financial institutions," Obama said.

"It is important that G-20 demonstrates its continued determination to work collectively to address the renewed challenges facing the global economy," he said.