G20: Global economy increasingly soft landing | the world

“We note that the probability of a soft landing for the global economy has increased”, reads a draft report dated February 23 accessed by Bloomberg News. “Risks to the global economic outlook are more balanced. Upside risks include faster-than-expected inflation”.

The text is not final and its draft is subject to intensive negotiations in São Paulo before finance ministers arrive this Wednesday. The G20 meeting has already been marked by sharp divisions, particularly over the Ukraine and Gaza wars that are rocking world politics. Among the challenges, the draft text states “Conflicts in many parts of the world Without naming them, as well “Geoeconomic Tensions”.

The report reflects a relatively optimistic view of the global economy, which has struggled in recent years to cope with the impact of the pandemic, rising inflation and sharp rises in interest rates.

“Inflation has eased in most economies, with sound monetary policies and reduced supply chain bottlenecks” and to moderate raw material prices, the G20 draft says.

“Proped” by the US

The International Monetary Fund last month raised its forecast for global economic growth to 3.1% in 2024, citing a better-than-expected expansion in the United States and fiscal support from China.

At a news conference in Sao Paulo on Tuesday, Treasury Secretary Janet Yellen emphasized the role of the United States.The US path to a soft landing has underpinned global growth”.

Yellen acknowledged risks to the outlook, such as protracted conflicts in Ukraine and the Middle East, rising commodity prices and disruptions in supply chains, and debt problems affecting low-income countries. he noted”Inflation has declined in many countries” but stopped short of suggesting that lowering interest rates would be appropriate.

G20 officials struggled with language to describe conflicts such as Russia's aggression in Ukraine, which has also affected economies around the world. The group of countries includes Russia and China, as well as the United States and its Western allies. A preliminary session on Monday discussed ways to address the economic consequences and risks of war.

It is expected that the ministers will try to prevent some controversial issues from becoming obstacles to other issues. Holding the session at the iconic São Paulo Biennale Center in the middle of a lush park, Brazil is presenting an agenda that includes poverty, sustainable development and the reform of global institutions.

Despite all the divisions, it's unclear how well that agenda will be carried through the meeting. In general, in the final announcement, the ministers set out their agreed vision of the global economy and future challenges.