World leaders attending the G20 summit in China are likely to renew their promises to use tax and spending policies to invigorate the sluggish world economy, but the chances of a meaningful new pro-growth push look slim.
As concerns grow about over-reliance on central banks to deal with the hangover of the financial crisis, there are some tentative signs of a more relaxed approach to public spending.
The European Union has taken a softer stance with some member states over its budget rules. And Britain, which until recently wanted to turn its big deficit into a surplus by 2020, is considering fiscal stimulus to offset the shock Brexit vote.
The United States, frustrated that the slow global economy is holding it back, hopes its calls for governments to do more to spur growth will gain new urgency when G20 presidents and prime ministers meet in Hangzhou in China today and tomorrow.
In 2015, the G20 leaders said they would use fiscal policies to help growth but also stressed the importance of cutting debt.
Japan, which has been trying to revive its economy for about 20 years, announced last month a 13.5tn-yen spending plan which includes infrastructure payouts to low-income households.
But with public finances still weak in many countries, there has been little major action to spur growth.
Nearly 10 years after the financial crisis began, many central bankers sound exasperated that their bold stimulus attempts have not been followed up by governments.
The frustration of central bankers is even more palpable in Europe where growth is weaker than in the United States, despite the European Central Bank cutting rates below zero.
Many eurozone governments are still struggling with the legacy of debt and deficits left by the financial crisis.
Extra spending this year to cover the cost of the eurozone’s refugee crisis will evaporate in 2017 given the unwillingness of the bloc’s big countries to reform or spend more.
In Britain, where new finance minister Philip Hammond has talked about a possible fiscal policy “re-set” later this year after the Brexit vote shock, the size of any stimulus will depend on the scale of the post-referendum slowdown. So far, data suggests the economy has been more resilient than forecast.
It’s not just central bankers who are urging governments to take advantage of their record-low borrowing costs to act.
The International Monetary Fund has estimated that a sustained increase in economic growth of 1 percentage point could bring debt ratios in advanced economies to their pre-crisis levels within a decade. It called last week for G20 leaders to take much stronger action.
And big long-term investors such as pension funds and insurers see promise in a deeper market for higher-yielding infrastructure-linked assets.
Yet the longer it takes for governments to develop new ways to support their economies, the more some investors are worried about the dangers of continued low growth, high debt, weaker banks and growing asset price bubbles.