AVN WEB Desk
RIO DE JANEIRO: There is an increased likelihood of a global economic “soft landing” as per a joint communiqué expected to be announced by G20 financial leaders, who apprehend that this positive outlook could, however, be jeopardized by ongoing wars and escalating conflicts.
According to Reuters, this announcement comes as finance ministers and central bankers from the Group of 20 major economies conclude their second day of meetings in Brazil, which has used its presidency to emphasize efforts toward reducing economic inequalities.
The World Bank had projected last week that the global economy would avoid a third consecutive decline in growth since a significant post-pandemic rebound in 2021.
It forecasted that 2024 growth would stabilize at 2.6pc, maintaining the same rate as 2023. However, it also noted that overall economic output would remain significantly below pre-pandemic levels through 2026.
The final draft of the G20 communiqué statement reads, “We are encouraged by the increasing likelihood of a soft landing for the global economy, though multiple challenges remain.” “Downside risks include wars and escalating conflicts,” the final draft warns.
To avoid contentious issues such as the conflicts in Ukraine and Gaza, the draft refrains from naming specific conflicts. Diplomats have sought to sidestep disagreements between Russia and major Western nations that hindered consensus at the finance chiefs’ gathering in February.
Brazil has prepared a chair statement emphasizing that these matters will be addressed by G20 leaders in November.
The draft says, “Economic activity has proven to be more resilient than expected in many parts of the world, though the recovery remains uneven across countries, heightening the risk of economic divergence.”
The document identifies risks to the economic outlook as broadly balanced, noting potential positive developments such as faster-than-expected disinflation and technological innovations, including the safe advancement of Artificial Intelligence (AI).
However, the draft also highlights potential downside risks, including the possibility of AI technology negatively impacting growth, economic fragmentation, persistent inflation leading to prolonged high interest rates, extreme weather events, and excessive debt.
