G20 finance leaders plan to assess the toll on the global economy on the anniversary of the Ukraine war
By David Lawder
BENGALURU (Reuters) – Global financial leaders will sum up the economic damage from Russia’s war in Ukraine on Friday when they meet on the conflict’s first anniversary and raise concerns that further sanctions on Moscow would disrupt a modest improvement in growth.
The meeting of G20 finance ministers and central bank governors on the outskirts of India’s tech hub Bengaluru comes amid signs the global outlook has improved since the group’s last meeting in October, when a number of G20 economies amid energy on the brink of recession and food price spikes caused by the war.
US Treasury Secretary Janet Yellen on Thursday highlighted the improvement, saying the global economy “is in a better position today than many were predicting just a few months ago.”
The International Monetary Fund has forecast global GDP growth of 2.9% for 2023, up from a 2.7% forecast in October, but still well below the 3.4% achieved in 2022.
Yellen attributed the improvement in part to the cooperation of G20 central banks and governments over the past year in taking vigorous action to quell inflation, even at the expense of growth.
Inflation in the United States and other countries has eased in tandem with lower energy prices, but Yellen added that such efforts must continue and more efforts are needed to mitigate the effects of the war, such as reducing food shortages and curbing of energy prices and Russian revenues.
Yellen and other G7 ministers on Thursday called for more financial support for Ukraine and pledged to maintain tough sanctions on Russia.
Japan’s finance minister to G7 leader Sunichi Suzuki told reporters that the group will closely monitor the effectiveness of the sanctions and “take further action as necessary.”
Federal Finance Minister Christian Lindner said the pressure on Russia must be kept high in order to “completely isolate” Russia’s economy.
But enthusiasm for further pressure on Russia’s economy is not shared by some members of the broader G20 group, notably India, which government sources say does not want additional sanctions on Russia during its G20 presidency this year.
The existing sanctions against Russia, which has historic ties with India, “are having a negative impact on the world,” said one of the Indian officials.
New Delhi has maintained a neutral stance on the conflict, sharply increasing its purchases of cheaper Russian oil and opposing the use of the term “war” in negotiations over the language of G20 communiqués. Russia calls its actions in Ukraine a “military special operation”.
Yellen said the communiqué is still being discussed and that she hopes for a strong condemnation of the Russian invasion and the damage it has caused to Ukraine and the world economy.
(Reporting by David Lawder, Aftab Ahmed and Christian Lindner; Editing by Andrew Heavens)