Written by Christian Kramer and David Lauder
WASHINGTON (Reuters) – Group of Seven finance leaders pledged on Wednesday to take steps to stabilize the global financial system after the recent banking turmoil and give low- and middle-income countries a bigger role in diversifying supply chains to make them more resilient. .
The countries’ statement did not explicitly mention China, but the use of the term supply chain fits with efforts to “support friends” for industrial democracies to work together to become less dependent on metals for batteries, semiconductors and other strategic goods. Asian industrial powerhouse.
“We are committed to jointly enabling low- and middle-income countries to play larger roles in supply chains through mutually beneficial cooperation, bringing together finance, knowledge and partnership, which will help contribute to sustainable development and increase the resilience of supply chains globally,” the finance ministers and bank governors said. central to the statement.
In a meeting on the sidelines of the meetings of the International Monetary Fund and the World Bank in Washington, the leaders said they discussed recent developments in the financial sector after the collapse of two US financial institutions and the compulsory sale of the troubled International Bank Credit Suisse. They said it “highlights the uncertainty about the global economic outlook and the need for vigilance.”
Ministers and presidents reaffirmed that the financial system is resilient, bolstered by swift government responses to disruptions and reforms implemented after the 2008 financial crisis.
“We will continue to closely monitor developments in the financial sector and stand ready to take appropriate measures to maintain the stability and resilience of the global financial system,” said the G7 finance leaders.
The ministers said supply chains need to become more efficient and resilient, which helps maintain macroeconomic stability and make economies more sustainable. The statement cited the need to diversify the “hypercentric” supply chains of clean energy technologies.
“In this initiative, we will stand firm to protect our shared values, maintain economic efficiency while preserving the free, fair, rules-based multilateral system and international cooperation,” the G7 financial leaders said, using language often used to exclude China and others. authoritarian regimes.
The G7 is made up of the United States, Canada, the United Kingdom, France, Germany, Italy, and this year’s president, Japan — all wealthy industrial democracies.
In its latest economic forecasts, the International Monetary Fund warned that the fragmentation of the global economy into geopolitical blocs is an important factor in reducing growth potential in the long term, with only 3% growth expected in 2028. This is the lowest forecast for five years since then. The fund began issuing such forecasts in 1990.
(Reporting by Christian Cramer; Additional reporting by David Lauder and Andrea Schalal)
