Global economy faces ‘uncertainty’, warn G7 finance ministers

The G7 finance ministers issued a warning about the “growing uncertainty” of the global economy and emphasized the importance of addressing regulatory gaps in the banking system. The ministers acknowledged the resilience of the global economy to multiple shocks, but noted the heightened uncertainty over its outlook. They stressed the need for vigilance, flexibility, and nimbleness in macroeconomic policies. The ministers also recognized the data, supervisory, and regulatory gaps in the banking system that have become apparent following the collapse of Signature Bank and the First Republic.

The G7 and its partners have spent the past few months removing sanctions loopholes and working to combat sanctions evasion. In this regard, the finance ministers agreed to increase information sharing on potential sanctions evasion and to monitor the effectiveness of price caps on Russian oil and petroleum products. They reiterated their commitment to opposing any attempts to circumvent or undermine sanctions. The G7 also pledged to provide Ukraine with $44 billion in economic assistance, enabling the IMF to approve a four-year loan program worth $15.6 billion.

US Treasury Secretary Janet Yellen called for “coordinated action” by the G7 countries against Beijing’s economic coercion. The G7 agreed to launch a framework for supply chain collaboration in clean energy by the end of the year, but the 14-page document did not include any mention of China-related economic security concerns. However, a senior Japanese finance ministry official confirmed that the issue of economic coercion was raised during the talks.

China’s foreign ministry criticized the broad export controls introduced by the United States in October, saying that they would make it significantly more difficult for Chinese companies to develop cutting-edge technology for military applications. It accused the US of unfairly violating the principles of the market economy and fair competition.

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