Global policy accord needed: FinMin at G20
BENGALURU: Finance minister Nirmala Sitharaman on Thursday pressed for international policy coordination and proactive collective efforts to protect economies amid geopolitical events dampening growth and recovery prospects.
Speaking at the G20 Finance Ministers & Central Bank Governors meeting in Washington DC, Sitharaman flagged economic challenges arising from prolonged inflation, supply chain disruption, volatility in energy markets, and investor uncertainty for all countries.
The G20 meeting was held under Indonesia’s presidency.
“FM Sitharaman said that the G20 is well-placed to catalyze international policy co-ordination to deal with macroeconomic consequences and called for proactive collective efforts towards protecting economies,” the ministry of finance tweeted on Thursday.
The G20 meeting agenda included global economic outlook and risk, international financial architecture, and global health.
The statement comes in the context of rising global crude oil and commodity prices led by the Russia-Ukraine war causing sharp spike in inflationary pressures across the globe, including
India, impacting economic recovery prospects. Besides monetary tightening by central banks in advanced economies threaten to cause huge capital outflows from developing countries causing currency depreciation and inflationary expectations.
Sitharaman also met US Secretary of Commerce Gina Raimondo and discussed ways to strengthen economic cooperation, in the bilateral and global contexts.
The IMF in its World Economic Outlook report released on Tuesday slashed India’s GDP growth forecast to 8.2% from 9% estimated earlier citing the impact of high global oil prices on domestic demand and private investment.
It estimated India’s inflation to average 6.1% in 2022-23, which is higher than the Reserve Bank of India’s upper tolerance band of 6%. India’s retail inflation climbed to a 17-month high of 6.95% in March and wholesale inflation accelerated to a four month high of 14.55% in the same month, remaining in double digits for about a year.
International oil prices have been highly volatile over the last two months, with Brent crude oil prices touching $105 per barrel on Thursday compared to near $100 per barrel in the beginning of April, and a 14-year high of $139.13 per barrel in March.
Sitharaman also met John Neuffer, president and CEO of the Semiconductor Industry Association (SIA) on the sidelines of IMF-World Bank Spring Meetings 2022 and apprised him of the initiatives and policies rolled out by India to attract and support foreign investment in the semiconductor industry. It includes development of sustainable chips and display ecosystem with an outlay of $10 billion.
“Neuffer said that he is upbeat about the initiatives taken by Government of India to promote investment in Semiconductor ecosystem and appreciated India’s commitment to become a reliable player in global supply chain,” ministry of finance said.