War in Ukraine and inflation are major challenges for the global economy, the United States warns

The war in Ukraine poses the greatest threat to the global economy, US Treasury Secretary Janet Yellen warned Thursday as G20 financial officials prepared for a meeting in Indonesia, where this problem and rising global inflation will all be a priority.

The invasion launched from Moscow sent inflation skyrocketing at a time when the world was just recovering from the covid-19 pandemic, threatening the recovery achieved over the past two years and risk of causing widespread hunger and poverty.

“Our biggest challenge today comes from Russia’s illegal and unprovoked war against Ukraine,” Yellen said at a press conference on the island of Bali ahead of the 8pm meeting of finance ministers and central bank governors. major world economies on Friday and Saturday. .

Yellen expressed concern about rising prices around the world, particularly in the United States, where inflation stood at 9.1% in June, an “unacceptably high” level, according to the US secretary.

The head of the US Treasury underlined that “the negative effects of the war are being recorded in every corner of the world, especially in relation to the increase in energy prices and growing food insecurity”.

“The international community must have a clear vision of the economic and humanitarian consequences of his war,” he said, referring to Russian President Vladimir Putin.

Yellen said she will continue to put pressure on American allies at the G20 put a cap on Russian oil pricesa measure that aims to cut the financing of the war and force Putin to end the invasion, as well as reduce energy costs, which have triggered the rise in prices of other goods around the world.

“A price cap is one of the most powerful tools,” he said, adding that such a cap would leave Putin without “the revenue the war machine needs.”

Called in India China

The senior official expressed it expectations that India and China will join this initiative limiting prices by stating that it “fits in with your interests” will anchor inflation for consumers around the world.

However, Yellen has not commented on whether Western representatives and their allies will organize a protest by getting up from their seats when it is the turn of the Russians to speak.

“We can’t do business as usual,” he said. “What I can tell you is that I certainly hope to express my position on the Russian invasion in the strongest possible terms. Talk about its impact on Ukraine and the global economy as a whole and condemn it.”

The treasury secretary said she hopes “many” of her colleagues will do the same.

The absence of Russia

The Russian finance minister will not attend the meeting in Bali and will virtually speak to his colleagues, a week after Russian Foreign Minister Sergey Lavrov confronted a largely critical environment at the G20 foreign ministers’ meeting.

IMF Notices

Yellen’s comments echo Wednesday’s International Monetary Fund warnings the outlook for the global economy has “darkened considerably” due to the invasion launched from Moscow, a few months after the international body revised its growth projections for 2022 and 2023 downwards.

Additionally, IMF Chief Executive Kristalina Georgieva said the Fund will again cut its growth projections “for both 2022 and 2023”, in a report to be released later this month.

The IMF also noted, in an IMF blog post on the eve of the G20 meeting, that rising fuel and energy prices could “ignite social tensions”in a blog post by the entity on the eve of the G20 meeting.

Source: AFP and EFE

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