Russia’s war in Ukraine is ‘biggest challenge’ to global economy, says Yellen

Russia’s war in Ukraine poses the biggest threat to the global economy, US Treasury Secretary Janet Yellen said on Thursday as G20 ministers prepare to start talks in Indonesia.

The invasion of Moscow has pushed up inflation at a time when the world is struggling to recover from the Covid-19 pandemic, jeopardizing the gains of the past two years and threatening widespread hunger and poverty.

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

“We are seeing negative fallout from this war in all corners of the world, especially in terms of rising energy prices and rising food insecurity,” she added.

“The international community must be clear about holding Putin accountable for the global economic and humanitarian consequences of his war.”

Yellen said she would continue to pressure G20 allies at the meeting for a Russian oil price cap to choke off Putin’s war chest and pressure Moscow to end the oil price cap. its invasion while reducing energy costs.

“A price cap…is one of our most powerful tools,” she said, adding that a cap would deprive Putin “of the revenue his war machine needs.”

She expressed hope that India and China would adhere to such a cap, saying it would “serve their own interests” to put downward pressure on prices for consumers around the world.

But she declined to know whether Western officials would stage a multinational walkout when Russian officials speak, as they did at a G20 meeting in Washington in April.

“It can’t be business as usual,” she said. “I can tell you that I can certainly expect to express in the strongest possible terms my views on the invasion of Russia…to talk about its impact on Ukraine and the whole of world economy and to condemn it.”

“I expect many of my colleagues to do the same.”

– ‘Dimmed’ global outlook –

Russia’s finance minister will not attend the Bali talks but will address them virtually, a week after Russian Foreign Minister Sergey Lavrov found himself outnumbered by his G20 counterparts in their criticisms of the military assault on Moscow.

Yellen’s comments echo the head of the International Monetary Fund, who said on Wednesday that the global economic outlook had darkened “significantly” due to the invasion of Moscow, just months after he revised down his forecast for global growth for 2022 and 2023.

The IMF “expects a further deterioration in global growth” in 2022 and 2023, Kristalina Georgieva said in a blog post published ahead of the meeting this weekend.

The risk of “social instability” was also increasing due to rising food and energy prices, she wrote.

But substantial progress was made in attempts to break the deadlock on Wednesday after Russia and Ukraine met in Turkey for their first direct talks since March on a deal to ease the food crisis caused by the lockdown. grain exports from the Black Sea.

UN Secretary-General Antonio Guterres called it “a ray of hope for alleviating human suffering and hunger around the world” ahead of another round of talks scheduled for next week.

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