The G7 countries’ finance leaders expressed increasing concerns about global economic uncertainty amidst apprehensions of a US default and the persistent Ukraine-Russia war.
Overview
The three-day G7 Finance Ministers and Central Bank Governors (FMCBG) meeting took place in Niigata, Japan, as the US is witnessing a stalemate between US President Joe Biden and the Republican-controlled House of Representatives on the issue of raising the debt ceiling.
A communique released after the meeting said, “The global economy has shown resilience against multiple shocks including the COVID-19 pandemic, Russia’s war of aggression against Ukraine, and associated inflationary pressures.”
Hopefully last night's @G7 kagami biraki ceremony brings all of our countries good fortune this year… pic.twitter.com/pnxhnoqCDZ
— Jeremy Hunt (@Jeremy_Hunt) May 12, 2023
The heads of the IMF, the World Bank Group, the Financial Stability Board, and the Organisation for Economic Cooperation and Development (OECD) attended the meeting.
The finance ministers and governors stressed that the G7 countries need to stay vigilant, agile, and flexible in their macroeconomic policy as uncertainty about the global economic outlook heightens.
Addressing reporters after the meet, British Finance Minister Jeremy Hunt said, “It would be absolutely devastating if America, which is one of the biggest motors of the global economy, was to have its GDP knocked off track by not reaching agreement.”
While their communique did not mention the issue, Japanese Finance Minister Shunichi Suzuki told a press conference after the meeting that the countries discussed the debt ceiling issue at a dinner on Thursday.
While the US reportedly pushed for plans to counter China, finance leaders from the Group of Seven (G7) nations on Saturday concluded a three-day ministerial meeting in Japan with a final communique making no mention of China. But this doesn't mean the bloc will stop scapegoating… pic.twitter.com/ynp4XliLpW
— Global Times (@globaltimesnews) May 13, 2023
Global Economy Challenges
In light of the elevated inflation, the G7 leaders said that the global financial system is “resilient” and the central banks will ensure that inflation expectations remain well anchored.
“We call for an immediate end of Russia’s illegal war against Ukraine, which would clear one of the biggest uncertainties over the global economic outlook,” the communique mentioned.
Ukrainian Finance Minister Sergeii Marchenko also joined the meeting, where the G7 finance leaders reiterated their commitment to a united response to Russia’s aggression against Ukraine.
The finance leaders remarked that the repercussions of the COVID-19 pandemic and the Ukraine War have brought economic resilience into sharper focus.
The G7 members also exchanged views on recent global economic developments with finance ministers and representatives from Brazil, Comoros, India, Indonesia, South Korea, and Singapore.