G20 draft communique sees growing chance of global economic 'soft landing'
World
G20 draft communique sees growing chance of global economic 'soft landing'
RIO DE JANEIRO (Reuters) - Group of 20 finance leaders are expected to cheer the growing likelihood of a global economic "soft landing" while warning of the risks from unspecified "wars and escalating conflicts," according to a draft communique seen by Reuters on Tuesday.
The G20 finance ministers and central bank chiefs gathering this week in Rio de Janeiro still plan to flag the risks of an uneven global recovery hinging on the persistence of inflation, according to the document.
"We are encouraged by the increasing likelihood of a soft landing of the global economy, although multiple challenges remain," the draft communique said, referring to a scenario in which inflation is tamed without triggering a painful recession or sharp jump in unemployment.
By avoiding explicit mention of the conflicts in Ukraine and Gaza, diplomats are attempting to sidestep the disagreements between Russia and major Western nations that derailed a consensus at the finance chiefs' gathering in February.
Brazilian negotiators said last week the G20 had agreed to leave geopolitical debates out of a joint statement in order to focus on economic cooperation to tackle issues such as global poverty, climate change and debt crises in less wealthy nations.
"Economic activity has proved to be more resilient than expected in many parts of the world, but the recovery has been highly uneven across countries, contributing to the risk of economic divergence," the draft communique said.
The document flagged risks to the economic outlook that remain broadly balanced, with faster-than-expected disinflation and technological innovations cited among upside risks.
On the other hand, the document noted downside risks such as escalating conflicts, economic fragmentation and persistent inflation keeping interest rates higher for longer.
In line with the Brazilian presidency's focus on global inequality, the draft communique warned that "climate change ... can substantially aggravate inequality challenges," and flagged "debt distress" in "several low and middle-income countries."
