G20 vows careful post-pandemic recovery
THE world’s biggest economies are committed to taking a careful approach to unwinding support introduced during the coronavirus pandemic, Indonesia said at a meeting of Group of 20 (G20) finance chiefs.
Some central banks, including in the United States, are moving towards hiking rates and withdrawing stimulus as economies rebound strongly from Covid-19-induced downturns and inflation surges.
But there are concerns that aggressive policy tightening could knock a fragile recovery off course and send shockwaves through developing countries.
At the end of a two-day meeting of finance leaders from the G20 economies in Jakarta on Friday, Indonesia’s central bank chief said the approach would be cautious.
“The G20 countries are committed to have well-calibrated, well-planned and well-communicated normalisation policies,” Bank Indonesia governor Perry Warjiyo said.
“It’s important so that these policies have a minimum impact on global financial markets and on developing countries in terms of spillover effect.”
Indonesia currently holds the presidency of the G20, which brings together the world’s top economies, including China, the United States, and several European nations.
The moves to tighten monetary policy are aimed at tamping down on inflation, which has been surging due to pandemic supply and logistics snags.
Inflation has been particularly pronounced in the United States, which last month saw its largest annual jump in nearly four decades.
The meeting has been overshadowed by concerns that Russia may invade Ukraine, and the threat to the global recovery that conflict would bring.