October 18, 2021

The IMF and the G20 called for tackling supply constraints facing the global economy.

Issued:

Global financial officials gathered in Washington on Wednesday to focus on finding ways to overcome supply chain disruptions that are pushing up prices and threatening to derail economic recovery.

As demand has increased, suppliers have not been able to sustain. Ships lined up outside U.S. ports waiting to unload, U.S. consumer inflation soared in September, world oil prices jumped above 80 80 a barrel, the highest in years, and the British family May be forced to do without Turkey for Christmas dinner.

They are an important meeting point for global supply challenges. International Monetary Fund, A group of 20 developed economies and a group of seven finance ministers.

Epidemic sanctions shut down manufacturing and trade routes, while suppliers, who are facing shortages of labor and truck drivers, could not sustain the sudden increase in demand for goods as economies began to reopen.

Barriers, which some policymakers fear may be long-lasting, have hampered the pace of recovery, prompting the IMF to reduce its growth forecasts for major economies such as the United States and Germany.

G7 officials agreed to work together to monitor the situation.

“Supply chain problems are being felt around the world – and finance leaders around the world must work together to address our common challenges,” said Rishi Sink, the UK’s Chancellor of the Exchequer. Presided over the meeting of the most important countries.

Tea World Bank An estimated 8.5 percent of global container shipments are stopped at or near ports, more than double that of January.

Risk of inflation.

Ignacio Vesco, head of Italy’s central bank, agreed with the IMF and others, who said inflationary pressures were largely due to short-term factors such as rising demand and supply problems.

But he acknowledged that “it could take months to complete.”

G20 Visco studied the issue to see if there were “more structural factors at work” to drive inflation higher than expected, and “is there any component that could be permanent.”

Central bankers are on a good line with support for recovery with easy financial conditions to avoid a steady rise in inflation.

The G20 said central banks would work as needed to “deal with price stability” while looking at inflationary pressures where they are temporary.

But World Bank President David Malpas warned that some of the price increases would not be “temporary.”

“Policymakers around the world will need time and support to address them.”

Head of the IMF Kristalina Georgieva. He said a reduction in vaccination rates to control epidemics in developing countries was contributing to supply disruptions, and that “as it expands, the risk of disruptions in the global supply chain will increase.”

‘Never again’

In the world’s largest economy, US President Joe Biden on Wednesday announced measures to reduce backlogs by extending 24-hour service to ports and suppliers.

He won extension working hours from Los Angeles’ largest West Coast port and the International Longshore & Warehouse Union, as well as companies including Walmart, FedEx and UPS.

But Biden said policies should be put in place to reduce reliance on single sources and increase domestic production to avoid a supply crisis.

“Never again should our country and our economy be unable to make the necessary products because we do not have access to the materials we need,” Biden said. “Then we will never have to rely so much on one company or one country.”

The issue was also raised by French Finance Minister Bruno Le Maire, who told reporters at the meeting: “The answer is in one word: freedom.”

(AFP)

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