Wednesday, June 19, 2024
Wednesday, June 19, 2024
Home » G7 Finance Chiefs Caution Economic Outlook as U.S. Debt Crisis Looms

G7 Finance Chiefs Caution Economic Outlook as U.S. Debt Crisis Looms

by Grayson Henderson
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Finance leaders of the Group of Seven (G7) nations warn about the U.S. debt crisis and urge caution amid mounting global economic uncertainty in a three-day meeting ended Saturday. However, their statement did not address media speculation of targeted restrictions on investments into China.

The gathering in the Japanese city of Niigata came as global policymakers are grappling with a potential default by the world’s largest economy.

While the communique made no mention of the U.S. debt ceiling stalemate, it featured heavily in discussions.

The standoff has hit markets as borrowing costs have risen on aggressive monetary tightening by U.S. and European central banks.

“We need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook,” they added in the communique after the meeting.

U.S. Treasury Secretary Janet Yellen, who has said a first-ever U.S. default could occur within weeks if the impasse is not resolved, telling Reuters on Saturday the standoff was “more difficult” than in the past but remained hopeful of a solution.

Britain’s finance minister, Jeremy Hunt, gave a sobering assessment, saying it would be “absolutely devastating” if the U.S. failed to reach agreement to raise the federal borrowing limit and had its economic growth “knocked off track”.

China, although not a member of the G7, was a focus. The finance leaders did not seek to mention in the communique the idea, flagged by the U.S., of targeted restrictions on investments into China.

In response to recent media reports that G7 members will allegedly declare a joint response, Chinese Foreign Ministry spokesperson Wang Wenbin said on Friday that China is a victim of U.S. economic coercion, and G7 countries are urged to stop engaging in exclusive “small circles” and refraining from becoming accomplices to economic coercion.

Source : CGTN

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