Finance chiefs from the Group of 20 advanced and emerging economies agreed on Friday to keep an eye on geopolitical risks amid growing concern over a possible Russian invasion of Ukraine, while pledging to take the necessary steps to contain inflationary pressures as oil and food prices rise.
In a statement released after their two-day meeting held in Jakarta in a hybrid in-person and virtual format, G-20 members said they “will continue to monitor key global risks, including geopolitical tensions emerging, and macroeconomic risks and financial vulnerabilities”, without directly mentioning the Ukrainian crisis.
Indonesian President Joko Widodo delivers a video speech during a Group of 20 finance chiefs meeting on February 17, 2022. (Photo courtesy of National Committee for Indonesia’s G20 Presidency) (Kyodo)
The statement was adopted late Friday evening after a delay apparently due to disagreements over language outlining geopolitical risks in reference to the situation in Ukraine.
Concerns are growing over the likelihood of a Russian invasion in the Eastern European country amid a massive buildup of Russian troops on the Ukrainian border.
“To formulate the words (in the statement), it took time, because at the same time, in the meeting room, there were countries which are involved in the geopolitical tension”, said the Indonesian Minister of Finance, Sri Mulyani Indrawati, at a press conference after the meeting. Russia is a member of the G-20.
While participants “did not discuss” the Ukrainian issue, the minister called for efforts to “manage” geopolitical risks to prevent them from undermining economic recovery.
The G-20’s decision not to mention the Ukraine issue contrasts sharply with a recent statement by G-7 finance ministers warning Russia of economic sanctions that would have “massive and immediate” consequences if it invaded Ukraine.
While Moscow has said it has no intention of invading Ukraine and has withdrawn some of its troops, the United States has dismissed such a claim. On Thursday, US President Joe Biden said he saw a “very high” risk of a Russian invasion in the “coming days”.
In the statement, G-20 members pledged to use “all available policy tools to address the impacts of the pandemic” as the spread of the highly transmissible Omicron variant of the coronavirus could cloud the global economic outlook.
G-20 members said they were determined to implement well-calibrated exit policies as economies recover from the coronavirus pandemic.
“Central banks will act as necessary to achieve price stability in accordance with their respective mandates, while remaining committed to clearly communicating their policy positions,” the G-20 ministers said.
They also agreed to intensify their efforts on debt restructuring assistance programs for low-income and vulnerable countries in order to strengthen their financial resilience.
Bank Indonesia Governor Perry Warjiyo told reporters that it was “very important that the global economic recovery can return to long-term economic growth, including overcoming the scarring effect of the pandemic.”
The spread of the Omicron variant continued to raise concerns about the threat to the global economy, already reeling from supply disruptions caused by the pandemic.
According to the International Monetary Fund, the world economy is expected to grow 4.4% this year, weaker than the 5.9% expansion estimated for 2021, with the United States and China the largest and second respectively. largest economy in the world, weighed down by supply disruptions linked to the pandemic and inflation.
Against a backdrop of rising inflation, the US Federal Reserve signaled an interest rate hike as early as March. A rise in rates was observed by financial markets and economies due to the possible impact on developing and emerging economies.
Masato Kanda, Japan’s Vice Finance Minister for International Affairs, attended the Jakarta meeting on behalf of Finance Minister Shunichi Suzuki, while Bank of Japan Governor Haruhiko Kuroda participated online.
The G-20 includes Argentina, Australia, Brazil, Great Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United States and Europe. Union.