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G-20 Sees Soft Landing, Warns of Uncertainty, Divergence

The G-20 also cautioned against a rise in trade barriers. Photographer: Maira Erlich/Bloomberg (Bloomberg/Photographer: Maira Erlich/Bloom)

(Bloomberg) -- The Group of Twenty’s finance ministers and central bankers see a “soft landing” for the world economy, but warned of mounting risks.

“We observe good prospects of a soft landing of the global economy, although multiple challenges remain,” according to a draft of the communique seen by Bloomberg, which is mostly unchanged from its July statement. 

“Growth has been highly uneven across countries, contributing to the risk of economic divergence,” the G-20 said in the statement, which followed its meeting Thursday on the sidelines of the International Monetary Fund and World Bank meetings in Washington this week.

Global output “remains resilient,” it said, but “some downside risks have increased amid elevated uncertainty,” citing wars, economic fragmentation, excessive spikes in commodity prices and more persistent than expected inflation.

The upcoming US election has been a key focus for global policymakers gathering in Washington. 

Fernando Haddad, finance minister from G-20 president Brazil, said in a briefing the outcome of the competition between Vice President Kamala Harris and former President Donald Trump will have global repercussions.

Brazil’s central bank governor, Roberto Campos Neto, said in the same G-20 briefing that there’s a lot of uncertainty around the impact of the election will disrupt the global economy’s soft landing and drive up inflation. 

The G-20 also cautioned against a rise in trade barriers, which have been a topic of discussion during the meetings particularly given Trump’s plan to impose tariffs to support US industries.

“We commit to resist protectionism and encourage concerted efforts to support a rules-based, non-discriminatory, fair, open, inclusive, equitable, sustainable, and transparent multilateral trading system with the World Trade Organization at its core and continue to support the reform efforts of the organization by its members,” it said.

Similar to the documents released after its July meeting, Brazil will also release a separate “Chair’s Statement” that addressed disagreements between members about the wars in Ukraine and Gaza and whether the G-20 should address them.

--With assistance from Viktoria Dendrinou.

(Updates with comment from Brazil officials.)

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