Global growth had been "disappointing" this year, according to World Bank president Dr Jim Yong Kim, who counted Europe's woes, reforms in Japan, and the impact of US monetary policy on emerging markets, among the world's greatest economic challenges.
Speaking in Sydney en route to the G20 finance ministers' meeting in Cairns at the weekend, Dr Kim said there was still a lot of uncertainty and geopolitical risk holding back Europe's recovery, while emerging market growth had slowed as US preparations for lifting interest rates drew capital away from countries such as Brazil.
"At one point our projections were as high as 3.2 per cent for growth globally, and now they're around 2.7 per cent," he said.
On Europe, however, he was encouraged by progress in some Mediterranean countries, although he warned that any escalation in the Ukraine crisis would set back broader recovery.
"Some of the uncertainty in Europe is related to the crisis in Ukraine and Russia," he said.
"So far the impact of that crisis has been at the lower end of what our expectations are, but if it gets worse, if the tensions get worse, the impact could be much, much bigger."
Dr Kim said he was grateful to the Australian government for "bringing the focus to growth" in this year's G20 agenda, which culminates in Brisbane in November with the leaders' summit.
The World Bank president will this weekend join the world's most powerful central bank governors and finance ministers in Cairns for a series of economic meetings. It will be one of their last chances to discuss as a group the main problems afflicting the global economy before the Brisbane summit.
Treasurer Joe Hockey has set a 2 per cent growth target for the group of countries.
"At this meeting we're going to sit down and say, 'OK, if we want 2 per cent growth, here are all the things that G20 members have to do to get there'," Dr Kim said.
"The International Monetary Fund (IMF) and the Organisation for Economic Development have suggested that we're at about 1.6 per cent growth. So there's still more work to do."
Mr Hockey has been in Cairns for much of the week, meeting with Bank of England governor Mark Carney and IMF chief executive Christine Lagarde. The official meetings will start on Saturday.
The Treasurer has flagged that he wants the official meetings with G20 finance ministers and central bank governors to focus on tax.
"Hopefully this weekend, G20 finance ministers will sign up to an agreed global approach to ensure that companies pay tax where they earn the money," he said this week. "It's not an easy outcome, but we are going to work damn hard at it."
He also wanted to talk seriously about the stability of the global financial system, including the rules for banking and prudential supervision of financial markets.
"We believe that at the G20 we can sign off on a number of initiatives that are going to ensure that banks that fail in the future are going to be held responsible for their own failure and systemically important banks don't have to turn to governments to be bailed out by taxpayers," Mr Hockey said.
In the days leading up to the event, the IMF warned its attendees ought to seize the moment and commit to "decisive" reforms to bolster global economic growth.
Global growth had been much weaker than expected in the first half of this year, it said, and desperate action was needed to boost growth around the world.
The call put pressure on the commitment made by G20 members at a similar meeting in Sydney in February to grow their economies by 2 per cent above current projections over the next five years.
Mr Hockey said Australia was on track to hit the target, with stronger employment growth this year, but he was aware of the challenge ahead of him.
On tax and regulation, Mr Hockey said it was "hugely important" this weekend to discuss the need to have common reporting standards across different tax jurisdictions.
He said tax authorities needed to know when new bank accounts were being opened so they could tell if those accounts were being used to hide money in tax havens.
"It sounds easy … but it's damn hard," Mr Hockey said.
"Millions of bank accounts are opened every day around the world and trying to get consistent information gathering, and systems that talk to each other, is very difficult. But Australia is absolutely determined to be involved in that."
"We also hope to finalise the rules in relation to shadow banking … [because] it represents a potential significant threat to the stability of the global financial system."
But other topics would be harder to deal with, he said.
The proper regulation of things such as over-the-counter derivatives will be very difficult, he said.
Mr Hockey said he hoped to "bring to a close" a lot of the "over-regulation" in financial and banking markets that occurred in the aftermath of the global financial crisis.
Attendees this weekend include some of the most powerful people in world finance: US Federal Reserve chairwoman Janet Yellen and Bank of England governor Mark Carney; European Central Bank president Mario Draghi and International Monetary Fund chief Christine Lagarde. Australia's Reserve Bank governor Glenn Stevens and Treasury Secretary Martin Parkinson will also attend.
There are five topics on the official agenda: global economy, growth strategies, investment, tax, and financial regulation, with side sessions on issues including infrastructure, international business and civil society.
