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Financial stewards of the biggest economies in the world descend on the tropical island of Bali this week at a time when rapid inflation threatens to further destabilise populations and turn fragile recoveries into recession.
The Group of 20 meetings of finance ministers and central bank governors Friday and Saturday in Indonesia will focus on a bevy of issues around soaring prices, threats of more sovereign defaults, and engineering soft landings for economies still in Covid recovery mode.
Officials will have plenty more to discuss, with war raging in Ukraine and US-China tensions remaining on the boil, all while seeking to advance global initiatives around green energy, digital banking, and common tax standards.
Here’s a look at some of the top issues set to dominate the gatherings:
Credited for rescuing the world economy from the Global Financial Crisis a decade ago, central bankers are now under fire for having to play catch-up on fighting rampant inflation this year. More than 80 central banks have hiked interest rates this year, with “jumbo” increases of 50 basis points or more becoming more popular.
For Federal Reserve Chief Jerome Powell, the “bigger mistake” is falling further behind on inflation rather than pushing the economy into recession.
Other economies have weaker fundamentals and buffers than the US, making for more volatile decisions.
Growth issues are high on the agenda for the G-20 meetings, with two of the six priorities addressing post-Covid exit strategies to support the recovery and scarring effects from the last crisis.
Many central bank governors in attendance will stay quiet this week, given blackout rules and norms around public comment with scheduled decisions coming soon.
The European Central Bank, Japan, and Indonesia are among those with announcements next week. – Bloomberg
Online Reporter