By Vidya Ranganathan
SINGAPORE (Reuters) - When finance officials from the world's leading economies meet this week, it is against the backdrop of a global economy that shows a glint of stability, with a deluge of Chinese data due in the coming days at best expected to confirm that.
Although investors realize this meeting of top economic chiefs -- the Group of Seven finance ministers, International Monetary Fund and World Bank -- in Tokyo cannot possibly produce quick fixes for euro zone's debt crisis or the approaching U.S. fiscal contraction, or even extract stimulus pledges from China, the pressure on governments to do more is intense.
Deputy finance ministers and central bankers from the leading economies have already warned that the raft of conventional and unconventional policy actions by monetary authorities can only buy the world economy some time, and that it is up to governments to boost demand and create jobs.
Fortunately for them, the economic data in the run up to the week-long meetings has been slightly encouraging.
Besides a headline-grabbing drop in the September U.S. jobless rate to its lowest in nearly 4 years, at 7.8 percent, there was enough evidence in manufacturing surveys in China and the United States to suggest the world's two biggest economies might have passed a bottom in the third quarter, even if the promise of improvement was missing.
This week's data on loan growth at Chinese banks should offer a glimpse into whether Beijing's gentle easing and go-slow encouragement of infrastructure investments are working.
It is also the week that the euro zone's permanent 500-billion-euro bailout fund, the European Stability Mechanism (ESM), is launched.
But the spotlight is on the IMF/World Bank annual autumn meetings in Tokyo, where both the United States and Europe may be put on the defensive.
Euro zone officials will explain what they have done so far to deal with their problems, according to a paper they have prepared for a meeting with their G7 colleagues from Canada, Japan and the United States. They will also point a finger at Washington as a potential source of economic stress.
"In particular, the U.S. needs to agree by the end of the year on how to deal with the 'fiscal cliff' and, at the same time, adopt a credible fiscal consolidation plan," the document said.
The unease over both the impending huge package of U.S. spending cuts and tax increases that take effect in January and the presidential election in November, has been growing, almost eclipsing the confidence inspired by the Federal Reserve's new open-ended debt purchase plans.
But the bickering between European leaders and the IMF over a Greece bailout, mainly over the IMF insistence that European governments restructure the Greek debt they hold, is by no means going to be a side-show at the IMF's 2012 annual meeting.
Japan, meanwhile, is bringing the issue of its rising currency, and the pressure the high yen puts on an economy that's on the verge of recession, to the G7 dinner table.
The challenges to a broad-based global recovery will remain the overriding theme at the G7 meeting, and the week brings the release of some somber forecasts by the IMF.
A German newspaper reported the IMF will cut its forecasts for global economic growth to 3.3 percent this year and 3.6 percent in 2013 from earlier forecasts of 3.4 percent and 3.9 percent respectively.
According to the paper, the IMF is also expected to warn of a significant increase in downside risks and say the growth outlook depended on "whether decisive political steps to stabilize confidence are taken in the euro zone and U.S.".
The World Bank has done its bit to highlight how vulnerable economies in Asia are. It said growth in east Asia and the Pacific will slow by a full percentage point in 2012 to 7.2 percent, but domestic demand will help a rebound next year.
The message was similarly and consistently bearish in the Australian central bank's statement after a surprise interest rate cut last week, as they could be in data this week.
Singapore, a bellwether of Asian openness to global demand, may have slipped into a technical recession in the third quarter, and euro zone industrial production data will be further confirmation of a protracted contraction in that region.
"It shouldn't be an exciting quarter," said Bank of Singapore chief economist Richard Jerram. "There is no reason to be expecting the data to deteriorate. At the same time, there might be some degree of improvement in the data, but nothing dramatic."
SPOTLIGHT ON CHINA MONETARY DATA
The bulk of data on China's third-quarter growth, and September data on trade and industrial production isn't due for another week, and shouldn't be much of a surprise either.
China's economy expanded 7.6 percent from a year earlier in the second quarter, the slowest pace in three years. The third quarter was possibly worse, at 7.4 percent, as per a Reuters poll.
But this week's data on money supply and bank loans is in many ways of greater consequence for China watchers keen to see if the central bank's open market operations and the government's bringing forward of infrastructure projects show up in loan growth.
Investors have been persistently disappointed by the absence of stimulus this year from a government with rather large pockets and ahead of the Communist Party's once-in-a-decade leadership transition.
Yet they know China is keen to avoid a repeat of the credit binge that followed the 2008 markets' crash, whose after-effects have left the economy overly reliant on investment and saddled its banks with bad loans.
Economists polled by Reuters estimate China's banks issued 650 billion yuan of new loans in September. Other data showed the issuance of medium and longer term bonds slowed last month.
"Overall, there are no clear signs that credit supply has picked up strongly in September, which is necessary to jump-start the investments and growth," said Citibank strategist He Weisheng. "This means growth will remain weak in Q4."
(This version of the story has been corrected to change G20 to G7 in paragraphs 2, 3, and 13)
(Reporting by Vidya Ranganathan; edited by Clive McKeef)