The global economy has a growing chance of achieving a soft landing, finance chiefs said in a draft of the final declaration of the G-20 At this week’s meeting in Brazil, citing faster-than-expected disinflation as one of the risks.
“We note that the probability of a soft landing in the global economy has increased,” said the draft statement dated February 23, seen by Bloomberg News. “The risks to the global economic outlook are more balanced. Upside risks include faster-than-expected disinflation.”
The text is not final and its drafting is subject to intense negotiations in Sao Paulo, before the arrival of the Finance Ministers on Wednesday. The G-20 meeting has already been marked by sharp divisions, especially over the wars in Ukraine and Gaza that are roiling global politics. The draft text mentions among the challenges “conflicts in many regions of the world”, without naming them, as well as “geoeconomic tensions”.
The statement reflects a relatively optimistic view of a global economy that has struggled in recent years to overcome the impact of the pandemic, skyrocketing inflation and a sharp rise in interest rates.
“Inflation has receded in most economies, thanks in large part to appropriate monetary policies, the reduction of bottlenecks in supply chains” and the moderation of raw material prices, according to the G-20 draft.
G-20 officials have struggled with language to describe military conflicts such as Russia’s invasion of Ukraine, which has also hit economies around the world. The group includes Russia and China, as well as the United States and its Western allies. In a preliminary session on Monday there was a day of haggling over how to refer to the economic effects and risks of war.
Ministers are expected to try to bracket some of the contentious issues to prevent them swamping other issues. Brazil, host of the session at the iconic Sao Paulo Biennale center amidst lush parks, is advancing an agenda that includes poverty, sustainable development and the reform of global institutions.
It’s unclear how much of that agenda will be accomplished at the meeting amid all the divisions. Generally, In the final statement, the ministers set out their agreed vision of the world economy and future challenges.
