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G20 to meet under Ukraine war, inflation cloud

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Finance ministers and central bankers from the Group of 20 major economies are gathering in Washington during annual meetings of the IMF and World Bank./AFP
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Oct 13, 2022 - 01:02 PM

WASHINGTON — A divided G20 holds talks on Thursday under the shadow of multiple crises, from Russia’s war in Ukraine to a global economic slowdown, on top of soaring inflation and climate change.

Finance ministers and central bankers from the Group of 20 major economies are gathering in Washington during annual meetings of the IMF and World Bank this week that have underscored the multiple challenges the world is facing.

The list of threats ranges from rising interest rates to soaring food prices, along with growing poverty and natural disasters blamed on climate change.

The IMF lowered its growth forecast for the world economy for next year earlier this week, warning that the “worst is yet to come.”

But the G20, which includes Russia, is expected to close its meeting without a joint communique, as in its previous gatherings presided by Indonesia this year.

“It may be difficult to have a joint communique,” said a source in the French economy ministry.

While Western nations have imposed unprecedented sanctions on Russia, other countries have maintained economic ties with Moscow, with India and China stepping up their purchases of Russian oil.

The Group of Seven wealthy democracies is now looking to cap the prices of Russian crude exports, a move aimed at stripping the country of a major source of funding for its war effort.

The G7 — which includes Britain, Canada, France, Germany, Italy, Japan and the United States — said Wednesday it had made “significant progress” in key parts of its proposal, noting that it had added Australia to its coalition.

Gaining broad global approval for a price cap is a key challenge for the proposal.

The Saudi-led OPEC group of oil exporters has angered the United States by agreeing on a drastic production cut with Russia and other allies, which could send energy prices soaring even higher.

US President Joe Biden warned of “consequences” for Saudi Arabia in an interview with CNN this week.

‘We’re cooked’ 

Tensions within the G20 come as leaders are due to meet at a summit in Bali, Indonesia, next month that could see Biden share the same venue as Russian President Vladimir Putin and another rival, Chinese leader Xi Jinping.

The lack of consensus within the group also comes ahead of the United Nations’ COP27 climate summit in Egypt in November.

Climate change has been among the central topics of the IMF and World Bank meetings this week.

IMF Managing Director Kristalina Georgieva said that the world has to invest up to $6 trillion per year if it is to meet the Paris agreement goal of reaching net-zero carbon emissions by 2050 in order to limit the increase in global temperatures.

“If we do not shift our trajectory this decade, we’re cooked. If we don’t want to be cooked, then we should speed up,” Georgieva said Wednesday in talks on climate change.

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