G20 financial chiefs flag global economic 'soft landing', warn of risks from war
"The G20 made a wise decision to put geopolitical issues in their place to allow the cooperation agenda to move forward," Brazil Finance Minister Fernando Haddad told a news conference.
Haddad also hailed the group's first-ever declaration calling for cooperation to effectively tax the world's largest fortunes, although that separate joint statement papered over disagreements about the right forum to advance the agenda.
The G20 communique said economic activity had proved to be more resilient than expected in many parts of the world, but the recovery had been highly uneven across countries, contributing to the risk of economic divergence.
BALANCE OF RISKS
- The document flagged risks to the economic outlook that remain broadly balanced, with more economic cooperation, faster-than-expected disinflation and technological innovations, like the safe development of Artificial Intelligence (AI), cited among upside risks.
- But at the same time AI tech could also turn out to be a downside risk to growth, the document said, along with economic fragmentation and persistent inflation keeping interest rates higher for longer, extreme weather events, and excessive debt.
"We reiterate the understanding that the cost of inaction is greater than the cost of action," the communique said.
The document also stepped-up language calling for a reform of the International Monetary Fund, that would give emerging and developing economies a bigger say in the lender of last resort.
The G20 communique underlined the urgency and importance of realignment in quota shares to better reflect members' relative positions in the world economy."
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Just not seeing the soft landing thesis in the data, says Citi's Hollenhorst
Date: 15 Feb 2024
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Why Soft Landings Are Basically Economic Nirvana | WSJ
WSJ’s Nick Timiraos explains why soft landings don’t happen often and how the Federal Reserve is trying to make one happen.
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