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23 February 2024

Global economy faces challenging environment

By Agencies

The global economy is going through a difficult period but its fundamentals remain solid, according to a draft of the communique to be issued after a February 9 meeting of the Group of Seven leading economies.


The draft of the communique to be issued in Tokyo on Saturday, which was read to Reuters by a G7 source, says the world economy is facing "a more challenging and uncertain environment than last October", when the G7 last met.


But the draft added that the fundamentals of the world economy remained "solid".


The G7 source told Reuters that the wording on foreign exchange markets to be included in the communique had not yet been finalised, but was expected to be unchanged from the October statement.


That statement made no explicit reference to any of the major currencies, such as the dollar or the yen, but called for a faster appreciation of the Chinese yuan.


Host country Japan wants the visiting finance ministers and central bank chiefs from Britain, Canada, France, Germany, Italy, and the United States to calm fears of a worldwide economic downturn.


But it realises that reaching common ground in assessing the current economic problems may be the best it can do.


Prior to the Tokyo gathering the IMF cut its global economic growth forecast to a five-year low of 4.1 per cent for this year, down from an initial estimate of 4.4 per cent. (Reuters)