G20 finance ministers and central bank governors gathered in Bangkok, Thailand, on Thursday amid uncertainty for the global economy caused by the US and Israeli war against Iran. The meetings are taking place alongside the annual meetings of the International Monetary Fund and the World Bank, which are being held in the Thai capital from October 12 to 18.
As Al Jazeera reports, the conflict in the Middle East has disrupted economic activity in the region, while disruptions to shipping through the Strait of Hormuz have driven up global energy prices. Oil prices have remained above $100 per barrel for most of the past eight months, putting pressure on government budgets and household spending, particularly in the Gulf countries and the rest of Asia.
Energy and debt
Australian Treasurer Jim Chalmers said he would call in the talks for an end to conflicts in the Middle East and the restoration of shipping through the Strait of Hormuz. According to him, the war is raising fuel prices, inflation and interest rates in various countries.
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Other topics of the meeting include rising debt levels in many countries. Debt exceeds 100% of GDP in the United States, Canada, Japan, Italy and France. IMF Managing Director Kristalina Georgieva warned the day before that mounting debt threatens the global economy and that governments will not be able to avoid either raising taxes or cutting spending.
Differences among participants
Most G20 finance ministers and central bank chiefs, Georgieva, and World Bank Group President Ajay Banga are expected to attend the meeting. At the same time, US Treasury Secretary Scott Bessent will not participate due to domestic commitments; Washington will be represented by Deputy Treasury Secretary Francis Brooke and US Deputy Treasury Secretary for International Affairs Erin Brown.
The United States will also raise the issue of global trade imbalances, including the role of non-market policies and exchange rates. Prospects for joint decisions are complicated by differences among the group’s members: at the previous meeting of G20 financial leaders in the United States in late August and early September, the countries failed to adopt a joint communiqué because of China’s objections to trade-related wording.
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