As per the final copy of a joint communiqué obtained by Reuters, the G20 finance leaders are expected to express optimism about a global economic "soft landing" on Friday, but they will also caution that wars and other conflicts might jeopardise this view.
The announcement will be made as the Group of 20 big nations' finance ministers and central bankers conclude their second day of talks in Brazil, which has focused its presidency on lowering economic inequality.
The World Bank predicted last month that after a significant post-pandemic surge in 2021, the global economy would not see a third straight decrease in growth, with growth in 2024 settling at 2.6%, in line with 2023. However, the bank also issued a warning, stating that overall production would stay well below pre-pandemic levels through 2026.
The draft, which will be formally accepted later on Friday, stated, "We are encouraged by the increasing likelihood of a soft landing of the global economy, although multiple challenges remain."
The final text said, "Downside risks include wars and escalating conflicts."
Diplomats have attempted to skirt the disputes between Russia and the main Western powers that scuttled a consensus at the finance chiefs' meeting in February by avoiding direct reference to the wars in Gaza and Ukraine.
Brazil wrote a chair statement on geopolitical problems to diffuse the tension, emphasising that the G20 leaders will discuss these topics in November.
"Economic activity has proved to be more resilient than expected in many parts of the world, but the recovery has been highly uneven across countries, contributing to the risk of economic divergence," the final version stated.
The study identified risks to the overall economic outlook that are still relatively balanced. Among the upside risks were faster-than-expected deflation and technical advancements like the safe development of artificial intelligence (AI).
However, the report also mentioned harsh weather, excessive debt, economic fragmentation, and persistent inflation that keeps interest rates higher for longer as potential adverse risks to progress in AI technology.
The statement raised serious concerns about climate change and the substantial loss of biodiversity, stating that burdening poorer countries with a disproportionate amount of the costs associated with combating climate change would only exacerbate economic inequality worldwide.
The draft statement stated, "We reiterate the understanding that the cost of inaction is greater than the cost of action."
A stronger push for an overhaul of the International Monetary Fund was also made in the statement, which highlighted the "urgency and importance of realignment in quota shares to better reflect members' relative positions in the world economy."
Although not much from Brazil's chair summary in February, a call to oppose protectionism was included as a stand-alone paragraph in the draft statement.
(Source:www.business-standard.com)
The announcement will be made as the Group of 20 big nations' finance ministers and central bankers conclude their second day of talks in Brazil, which has focused its presidency on lowering economic inequality.
The World Bank predicted last month that after a significant post-pandemic surge in 2021, the global economy would not see a third straight decrease in growth, with growth in 2024 settling at 2.6%, in line with 2023. However, the bank also issued a warning, stating that overall production would stay well below pre-pandemic levels through 2026.
The draft, which will be formally accepted later on Friday, stated, "We are encouraged by the increasing likelihood of a soft landing of the global economy, although multiple challenges remain."
The final text said, "Downside risks include wars and escalating conflicts."
Diplomats have attempted to skirt the disputes between Russia and the main Western powers that scuttled a consensus at the finance chiefs' meeting in February by avoiding direct reference to the wars in Gaza and Ukraine.
Brazil wrote a chair statement on geopolitical problems to diffuse the tension, emphasising that the G20 leaders will discuss these topics in November.
"Economic activity has proved to be more resilient than expected in many parts of the world, but the recovery has been highly uneven across countries, contributing to the risk of economic divergence," the final version stated.
The study identified risks to the overall economic outlook that are still relatively balanced. Among the upside risks were faster-than-expected deflation and technical advancements like the safe development of artificial intelligence (AI).
However, the report also mentioned harsh weather, excessive debt, economic fragmentation, and persistent inflation that keeps interest rates higher for longer as potential adverse risks to progress in AI technology.
The statement raised serious concerns about climate change and the substantial loss of biodiversity, stating that burdening poorer countries with a disproportionate amount of the costs associated with combating climate change would only exacerbate economic inequality worldwide.
The draft statement stated, "We reiterate the understanding that the cost of inaction is greater than the cost of action."
A stronger push for an overhaul of the International Monetary Fund was also made in the statement, which highlighted the "urgency and importance of realignment in quota shares to better reflect members' relative positions in the world economy."
Although not much from Brazil's chair summary in February, a call to oppose protectionism was included as a stand-alone paragraph in the draft statement.
(Source:www.business-standard.com)
