G-20 ministers focus on reducing inflation without harming growth

July 15 , 2022. 3 hours ago – 14:18 KYODO NEWS

Screenshot taken on July 15, 2022, from Bank Indonesia’s YouTube channel shows Indonesian Finance Minister Sri Mulyani Indrawati delivering her opening address at a meeting of finance chiefs from the Group of 20 major economies in Nusa Dua, Indonesia. (Kyodo)

NUSA DUA , Indonesia – Finance chiefs from the Group of 20 major economies began a two-day meeting in Bali on Friday to discuss ways to curb global inflation amid Russia’s war in Ukraine while not hampering economic recovery.

With inflation affecting more than just food and energy prices, the G-20 ministers and central bank chiefs, including Japanese Finance Minister Shunichi Suzuki, are seeking coordinated international action at the gathering on the Indonesian island to avoid an economic downturn.

At the outset of the meeting, Indonesian Finance Minister Sri Mulyani Indrawati said the war in Ukraine and subsequent commodity price increases, including for food and energy, may exacerbate global inflation and further increase social instability.

“It is clear that we must step up our efforts and do more business,” she said, adding that the finance chiefs will focus not only on emerging issues facing the global economy but also on achieving strong, sustainable, inclusive and balanced growth.

It remains uncertain whether the G-20 participants will be able to agree on a joint statement during the meeting, as member countries remain deeply divided in their responses to Russia’s invasion of Ukraine. A joint statement was not adopted at their previous gathering in April.

The Group of Seven industrialized economies — Britain, Canada, France, Germany, Italy, Japan and the United States, plus the European Union — have imposed sanctions in response to Moscow’s military aggression, while some emerging economies including Brazil, China and India have distanced themselves from Western countries on the issue.

Russian Finance Minister Anton Siluanov is likely to join the meeting remotely. Ukraine’s finance minister has also been invited to the gathering and is expected to take part online as well, according to Indonesia’s Finance Ministry.

Before attending the G-20 meeting, Suzuki and U.S. Treasury Secretary Janet Yellen held talks in Tokyo and blamed Russia’s war in Ukraine for increasing exchange rate volatility by causing food, energy and commodity prices to rise, in an apparent attempt to set the tone for addressing key issues at the Bali gathering.

The agenda items for the ministerial talks are also likely to include the global economic impact of monetary tightening by the United States and other advanced economies, as well as debt relief for poor nations including Sri Lanka, whose president has fled the country amid an economic crisis.

Prior to the latest meeting of the finance chiefs, the International Monetary Fund released a report dubbed the “G-20 Surveillance Note,” which said, “The global economic outlook has darkened considerably, while inflation remains high.”

The IMF in April revised down its global growth projections to 3.6 percent for 2022 and 2023, reflecting the negative impact of the war in Ukraine and the ongoing growth slowdown in China.

IMF chief Kristalina Georgieva pointed out that high inflation could sink recovery and further deteriorate living standards, especially for the vulnerable, and called for international cooperation led by the G-20.

The G-20 comprises the G-7 members as well as Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.

Photo taken on July 15, 2022, shows the venue of a meeting of the finance chiefs of the Group of 20 major economies in Bali, Indonesia. (Kyodo)