The Group of 20 nations is prepared to act "urgently" to bolster growth and called on governments to cut interest rates and raise spending as the world's leading industrialized economies battle the threat of a recession.

"We stand ready to urgently take forward work and actions agreed by our leaders to restore and maintain financial stability and support global growth," the group said in a statement released on Sunday following a meeting in Sao Paulo. "Countries must use all their policy flexibility, consistent with their circumstances, to support sustainable growth."

Those measures include "monetary and fiscal policy", it said. Officials in the US and Europe already have slashed borrowing costs and boosted spending in a bid to contain the effects of the slump.