Global finance leaders will tally the economic damage from Russia’s war in Ukraine on Friday.
As they meet on the conflict’s first anniversary with some voicing concerns that more sanctions on Moscow would disrupt a modest improvement in growth.
The meeting of G20 finance ministers and central bank governors on the outskirts of Bengaluru comes amid signs that the global outlook has improved from the group’s last meeting in October when a number of G20 economies were teetering on the brink of recession amid energy and food price spikes caused by the war.
US Treasury Secretary Janet Yellen on Thursday highlighted the improvement, saying the global economy “is in a better place today than many predicted just a few months ago”.
The International Monetary Fund has forecast global GDP growth for 2023 at 2.9%, up from a 2.7% forecast in October, but still well below the 3.4% achieved in 2022.
Yellen attributed the improvement in part to cooperation among G20 central banks and governments over the past year in taking strong action to quell inflation, even at the expense of growth.
Inflation in the United States and other countries has eased alongside lower energy prices, but Yellen added that such efforts needed to continue and more work was needed to mitigate spillovers from the war, such as easing food shortages and holding down energy prices and Russian revenues.
Yellen and fellow G7 ministers on Thursday called for more financial support for Ukraine and vowed to maintain tough sanctions on Russia.
G7 chair Japan’s finance minister, Sunichi Suzuki, told reporters that the group would closely monitor the effectiveness of sanctions and “take further actions as needed”.
German Finance Minister Christian Lindner said the pressure on Russia must be kept high to “completely isolate” Russia’s economy.
But the enthusiasm for squeezing Russia’s economy further is not shared by some members of the broader G20 group, especially India, which does not want additional sanctions against Russia during its G20 presidency this year, according to government sources.
The existing sanctions on Russia, which has historic ties to India, “are having a negative impact on the world,” one of the Indian officials said.
New Delhi has maintained a neutral stance on the conflict, vastly increasing its purchases of cheaper Russian oil and pushing against the term “war” in negotiations over the G20 communique language.
Russia calls its actions in Ukraine a “special military operation”.
Yellen said the communique was still under discussion and she hoped to see a strong condemnation of Russia’s invasion and the damage it has caused Ukraine and the global economy.