Indonesian central bank Gov. Perry Warjiyo speaks in Jakarta, Indonesia, on June 20, 2019.WILLY KURNIAWAN/Reuters
Finance leaders of the world’s biggest economies called Friday for a cautious and well co-ordinated approach to navigating recoveries from the pandemic.
Finance ministers and top central bankers of the Group of 20 industrial nations agreed on a need to carefully calibrate moves by the U.S. and other countries to combat inflation by raising interest rates and unwinding other measures to buffer economies from repeated waves of coronavirus outbreaks, said Indonesian central bank Gov. Perry Warjiyo.
“We agreed that in order to support the global financial system we need a well co-ordinated and well considered normalization policy,” Warjiyo told reporters in an online news conference.
“This is important so that these policies have minimum impact on global financial markets and on developing countries.”
Meetings like the one held Thursday and Friday in Jakarta lay the groundwork for a summit of G20 leaders later in the year.
As of late Friday evening, the leaders had not yet released their communiqué. But Indonesian officials indicated that much of what was discussed was carried over from last year’s talks: global tax policies, climate financing and funding for improved public health.
In opening the meetings, Indonesian President Joko Widodo urged that countries co-operate to support the global recovery and avoid tensions like those in Ukraine.
“The geopolitical situation adds to challenges G20 countries are facing,” Indonesian Finance Minister Sri Mulyani Indrawati said after the talks wrapped up.
Inflation has pushed prices of food, energy and other vital necessities sharply higher at a time when many countries are still trying to get COVID-19 outbreaks under control. That has financial leaders treading a precarious path between raising costs of borrowing to cool inflation and while trying to avoid derailing nascent economic recoveries.
The U.S. Federal Reserve is pulling back on massive support for markets and businesses, preparing to raise interest rates as soon as next month to cool inflation that jumped to 7.5 per cent in January – the highest rate in 40 years.
Consumer prices rose to a record 5.1 per cent in the 19 countries that use the euro last month and to a nearly 30-year high in the United Kingdom.
Indonesia’s central bank has also moved to curb inflation while still trying to repair damage caused by the pandemic.
Officials attended the G20 meetings both in person and online, given troubles with travel and quarantines due to outbreaks mostly of the omicron variant of coronavirus, that are plaguing many countries.
Host Indonesia is among many countries in Southeast Asia that have endured severe waves of infections, though vaccinations have helped quell the worst of 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.
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