Gayatri Suroyo, Leika Kihara

JAKARTA/TOKYO – Friday’s warnings by finance leaders representing the Group of 20 largest economies could be a sign that global inflation is on the rise and there are geopolitical threats to the recovery. This comes as the fallout from the COVID-19 pandemic and the Ukraine crisis cloud the future.

G20 central bank governors met to discuss how to cut down on crisis-mode stimulus without disrupting recovery after the pandemic.

Reuters has seen a draft communication in which the top finance officials of major economies worldwide pledged that they would use all available tools to deal with the consequences of the pandemic. However, they warned that future policies could be narrower and more uneven.

According to the draft communique, inflation is high in many countries because of supply disruptions and a mismatch between supply and demand.

Ministers and governors stated that central banks would act if necessary to maintain price stability, in accordance with their mandates. However, they will remain committed to transparent communication about their policy positions.

Although the draft statement did not directly address the Ukraine-Russian border crisis, it stated that only the G20 would continue to monitor potential risks “including those stemming from current geopolitical tensions.”

If Russia (a member of G20), objects to the word, the bracketed “current” indicates that the communique may delete it.

Following their meeting on Friday, G20 finance officials will release the final communique. These talks took place both in Jakarta and virtually.

It is causing problems for the central banks’ policy planning because of the slow pace at which recovery has been made from the pandemic. U.S. Federal Reserve has been predicting steady rate increases, drawing attention to potential implications for emerging markets.

Although cases of Omicron COVID-19 variants are declining in wealthy countries, there are still many rising cases in developing countries like Indonesia.

According to the draft communique, G20 finance chiefs are expected to support ensuring affordable and timely access to COVID-19 diagnostics, vaccines, and other medical supplies to low- and mid-income countries.