‘Great escape’ is no comfort to G-20

If the world economy is heading for a soft landing there’ll be plenty of anxiety along the way, with Iran’s missile attack on Israel putting an exclamation point on global jitters.

As the world’s financial elite gather in Washington for meetings of the International Monetary Fund (IMF), World Bank and Group of 20 (G-20), they’ll confront a mixture of slowing growth, stubborn inflation, high interest rates and debt levels, and marketrattling geopolitical risks from Kyiv to Tel Aviv.

Bloomberg Economics now sees global activity slowing this year to 2.9%—a 0.2 percentage point upgrade from December in what it terms a “great escape”— but still “way below” the prepandemic pace.

IMF chief Kristalina Georgieva has signalled that the fund will also slightly raise its forecast, to be released Tuesday, from the current 3.1% while warning that the world is heading for “a sluggish and disappointing decade.”

Against that backdrop, investors will closely watch key attendees at the meetings. Scheduled speakers include Federal Reserve chairman Jerome Powell, US Treasury secretary Janet Yellen, UK chancellor of the exchequer Jeremy Hunt, and the heads of the European Central Bank, Bank of Japan and Bank of England.

The politics of the moment have hamstrung the G-20 at recent gatherings, and it will likely again be unable to address risks that split its members.

Russia’s war in Ukraine has dragged into its third year, with US military support in question and Kyiv’s ability to pay for bullets and bond coupons an increasing focus. The IsraelHamas war in Gaza, meanwhile, risks tipping the Middle East into a wider conflagration.

Iran on Saturday launched more than 200 ballistic and cruise missiles and attack drones against Israel in a dramatic escalation of tensions.

Both conflicts, swirling around some of the world’s biggest petroleum suppliers, are pushing energy prices higher, a worrisome sign for inflation fighters.

The IMF has sounded the alarm over the geopoliticallydriven fragmentation of the global economy. The divide is broadly between the US and European Union on one side and China and Russia on the other—with the Global South the main battleground for business and influence.

Bloomberg Economics sees global activity slowing this year to 2.9%—a 0.2 percentage point upgrade from Dec