G-20 finance chiefs to end meeting amid rift over war, debt woes

Finance chiefs from the Group of 20 economies will wrap up their two-day meeting on Thursday as divisions over Russia's war on Ukraine threaten to undercut efforts to strengthen coordination amid slow growth, debt distress and banking concerns.

The G-20 has faced a test of its relevance and effectiveness as a multilateral framework to cope with crises, and the latest meeting may end without a joint statement due to differing views on the war.

All members of the group have criticized Moscow for invading its neighbor, except China and Russia, a deep gulf highlighted in the previous finance chiefs' meeting in February.

Since then, fears about the health of the banking sector have gripped financial markets and uncertainty has grown about the pace of aggressive rate hikes by central banks in major economies. The International Monetary Fund has cut its growth forecast for the world economy for this year.

The development comes as the U.S. Federal Reserve and other major central banks have been raising interest rates to tame inflation, benefiting their currencies, such as the U.S. dollar.

Higher rates and a strong dollar, however, make it difficult for mid- and low-income nations that have taken on huge debts to repay them in dollars. Weaker currencies have boosted import costs of energy and raw materials for such nations.

In the previous meeting, the G-20 finance chiefs called for "well-calibrated" monetary, fiscal and other policies to promote growth and ensure financial stability.

Sri Lanka is among the nations whose debt vulnerabilities have been exposed, prompting the IMF to approve a $3 billion loan. Its major creditors -- China, France, India and Japan -- are part of the G-20 group.

The financial aid came after China, which had shown reluctance, decided to support Sri Lanka's debt restructuring.

The G-20 meeting is held on the fringes of gatherings hosted by the IMF and the World Bank. Finance Minister Shunichi Suzuki and new Bank of Japan Governor Kazuo Ueda represent Japan.

Suzuki called for more accuracy and transparency in debt data to prevent future crises, apparently in view of China's lending practices which have been criticized as opaque.

"We expect this exercise of sharing data to be an established practice and to be widely spread among more creditor countries," he told a meeting of the IMF and World Bank.

Along with the Group of Seven nations -- Britain, Canada, France, Germany, Italy, Japan and the United States plus the European Union -- the G-20 includes Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.

© Kyodo News