G20 finance ministers and central bankers, meeting in Washington, pledged Wednesday to avoid “any premature withdrawal” of support for the economy, while closely monitoring inflationary pressures.
“We will continue to support the recovery, avoiding any premature withdrawal of support measures, while preserving financial stability and long-term fiscal sustainability,” said a statement released after the meeting.
Central banks are also committed to “closely monitor price developments” and to communicate transparently.
The commitment to help the economy comes as inflation accelerated around the world as demand rebounded from the 2020 recession.
All eyes are on the main central banks, including the US Federal Reserve (Fed), which is due to decide in November whether to start cutting aid.
The big money-makers are meeting in Washington on the occasion of the fall meetings of the International Monetary Fund (IMF) and the World Bank.
They stressed that they would use “all the tools available for as long as necessary” to support those most affected by the crisis caused by the pandemic: women, young people and undeclared and low-skilled workers.
The IMF, which lowered its global growth forecast to 5.9% for this year from 6% in July, has warned of the wide disparity in the recovery linked to sluggish vaccination in developing countries.
Regarding vaccination, they will strive “to help address bottlenecks and tool shortages to fight Covid-19 in low and middle income countries, over the coming months.”
“We reaffirm our commitment to ensure safe, equitable and affordable access to vaccines, therapeutics and diagnostics,” they stressed.
The G20 is under the Italian presidency.
Italian Finance Minister Daniele Franco and Italian Central Bank Governor Ignazio Visco considered these problems to be generally transitory.
Getting supply chains back to working order “will take time” given the scale of the pandemic, Visco said at a press conference.
But he estimated that in the coming months, “the bottlenecks (…) will fade and prices will decrease”.
He admitted, however, that there was “debate” within the G20 on the possibility that for certain products, the supply problems become more permanent.
“We have to understand if there are more structural factors,” he noted.