(Bloomberg) — Finance chiefs from the world’s biggest economies are holding their first gathering of the year Thursday and Friday, with the pandemic, inflation and taxes set to dominate talks.
Discussions on capital flows, financial stability and sustainable finance are also on the agenda when central bank governors and finance ministers from the Group of 20 hold virtual and in-person meetings in Jakarta.
Many of the events will be behind closed doors, and much is likely to be discussed on the side, including surging oil prices and tensions with Russia over Ukraine. Since the communique scheduled to be issued Friday afternoon in Indonesia must be agreed on by all members, it’s likely to shun finger-pointing in favor of calls for cohesion around shared goals.
Here’s a guide to the talks Thursday and Friday:
Global Recovery
Top of mind will be navigating a slowing global economy that faces broad-based inflation risks and a pandemic now in its third year. When officials last met in October, price pressures were dubbed as “transitory.” Now investors are betting on the fastest pace of interest-rate hikes since 2010 across the world’s biggest developed markets.
Sill, the inflation outlook is far from uniform. While the Federal Reserve is raising rates, the People’s Bank of China is easing. The IMF three weeks ago cut its world economic growth forecast for 2022, citing weaker prospects for the U.S. and China, along with persistent inflation.
Officials are also expected to discuss Covid-19 assistance to lower-income countries and how to reduce the gap in access to vaccines, as well as hold talks around preparing for future pandemics.
What They Said in October
“Central banks are monitoring current price dynamics closely. They will act as needed to meet their mandates, including price stability, while looking through inflation pressures where they are transitory and remaining committed to clear communication of policy stances.”
— Communique from Finance Ministers and Central Bank Governors Meeting, Oct. 13, 2021
Tax
Officials will discuss the latest step for the ambitious G-20-backed plan to overhaul how countries tax multinational companies.
That agreement, reached last year, intends to halt efforts by big firms to shift profits into low-tax havens through a global minimum tax of 15% for multinationals. It also attempts to address the increasingly digital nature of international commerce by taxing companies, in part, on where they do business instead of where they book profits.
A U.S. official said this week that Treasury Secretary Janet Yellen would continue to express confidence that Congress will approve measures to implement the U.S. portion of the global minimum tax this year. No mention was made about the second portion of the agreement, which would reallocate taxing rights, a component that might face more opposition among U.S. lawmakers.
International Financial Architecture
This section of the meetings will analyze capital flows and threats to both macro-economic and financial stability, along with discussions on boosting financial resilience.
The International Monetary Fund and the World Bank have been warning about risks developing nations face from the spillover of imminent interest-rate increases in the U.S., and the slow progress of the Common Framework for Debt Treatments.
Both institutions have called for the G-20 to allow nations that apply for restructuring a standstill during negotiations. IMF Managing Director Kristalina Georgieva also has urged an expansion in the number of eligible nations. About 60% of low-income countries are at high risk or already in debt distress, double 2015 levels, according to the IMF.
What They Said in October
“We reiterate our commitment to strengthening long-term financial resilience and supporting inclusive growth, including through promoting sustainable capital flows, developing local currency capital markets and maintaining a strong and effective Global Financial Safety Net with a strong, quota-based, and adequately resourced IMF at its centre.”
Infrastructure & Climate Change
Looking at ways to scale up sustainable infrastructure and drive digital investment, along with enhancing social inclusion, will be among key talking points. Also likely to be discussed is G-20 support for the IMF’s proposed initiative on climate change and sustainability, the Resilience and Sustainability Trust. IMF staff last month said they hope the executive board will approve the trust by its spring meetings in April and that it will be fully operational by year-end.
What They Said in October
“We take note of the outcome document of the first G-20 Infrastructure Investors Dialogue on financing sustainable infrastructure for the recovery and we look forward to further collaboration between public and private investors to mobilize private capital.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
