G20 finance leaders urge caution in unwinding pandemic support
JAKARTA (AP) — Financial leaders from the world’s largest economies on Friday called for a cautious and well-coordinated approach to managing post-pandemic recoveries.
Finance ministers and key central bankers from the Group of 20 industrialized countries agreed on the need to carefully calibrate the measures taken by the United States and other countries to fight inflation by raising interest rates and rolling back other measures to protect economies from repeated waves of coronavirus outbreaks, the Indonesian said. central bank governor Perry Warjiyo.
“We have agreed that to support the global financial system, we need a well-coordinated and well-considered normalization policy,” Warjiyo told reporters at an online press conference.
“It’s important for these policies to have minimal impact on global financial markets and on developing countries.”
Meetings like the one held Thursday and Friday in Jakarta laid the groundwork for a G-20 leaders’ summit later in the year.
Friday evening, the leaders had not yet published their press release. But Indonesian officials said much of what was discussed was carried over from last year’s talks: global fiscal policies, climate finance and funding for improved public health.
Opening the meetings, Indonesian President Joko Widodo urged countries to cooperate to support global recovery and avoid tensions like those in Ukraine.
“The geopolitical situation adds to the challenges facing the G-20 countries,” Indonesian Finance Minister Sri Mulyani Indrawati said after the talks concluded.
Inflation has sent prices for food, energy and other necessities skyrocketing at a time when many countries are still trying to bring COVID-19 outbreaks under control. This forces financial leaders to tread a precarious path between raising borrowing costs to calm inflation and while trying to avoid derailing nascent economic recoveries.
The US Federal Reserve is withdrawing its massive support for markets and businesses, preparing to raise interest rates as early as next month to cool inflation which jumped to 7.5% in January – the highest rate in 40 years.
Consumer prices hit a record 5.1% in the 19 countries that use the euro last month and an almost 30-year high in the UK.
Indonesia’s central bank has also taken steps to curb inflation while trying to repair the damage caused by the pandemic.
Officials attended G-20 meetings both in person and online, given travel and quarantine issues due to outbreaks primarily of the omicron variant of the coronavirus, which plagues many countries.
Host Indonesia is among several countries in Southeast Asia that have suffered severe waves of infections, although vaccinations have helped quell the worst outbreaks.
The world’s 10th largest economy, it is located in the fastest growing region – at least before the pandemic swept the world, disrupting business and travel while killing nearly 6 million people.
AP Business Writer Elaine Kurtenbach in Bangkok contributed to this report.
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