Topline
A cohort of heads of state will warn about the dire state of the global economy at the Group of 20 summit this weekend, Bloomberg reported Friday, as the lingering effects of inflation and Russia’s invasion of Ukraine continue to be felt across the world.
This months G-20 summit comes at a tenuous stretch for the global economy.
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Key Facts
In a joint statement, G20 leaders will caution about the impact of “cascading crises” on economies worldwide, according to Bloomberg, citing a person who has viewed a draft of the statement.
The statement will add that the outlook for economic growth is below historical trends and there remains a strong possibility of a downturn, per the report.
Key Background
The G-20, which includes leaders from China, the European Union, India, Japan, Russia and the U.S., will convene Saturday and Sunday in India, though Russian President Vladimir Putin and Chinese President Xi Jinping will not attend the meeting. The conclave comes at a particularly trying time for the global economy, as the International Monetary Fund projects economic growth to be 3% in both 2023 and 2024, the weakest marks since 2020, when the Covid-19 pandemic caused global output to contract for the first time since 2009. At last year’s G-20 summit, heads of state cited the impact of the pandemic, the war in eastern Europe and climate change as downside risks for economic growth.
Big Number
6.8%. That’s what the IMF projects global headline inflation to be in 2023, down from 8.7% last year but still far above the 3.5% average inflation rate during the end of last decade. Central banks worldwide have hiked interest rates to curb inflation, a move that historically dampens growth.
Tangent
The U.S. Dollar Index surged to a six-month high earlier this month, hovering over the last 18 months at its strongest level since the early 2000s. A strong dollar typically coincides with a period of significant economic stress, or often a recession.
