G20 meet: Infra to sustainable finance, global headwinds take centre stage

The global commodity price and supply-chain shock due to the war in Europe, the macroeconomic outlook for 2023, and the financing of sustainable infrastructure were some of the main points discussed on Day 1 of the meeting of the Finance and Central Bank Deputies (FCBD) of the Group of Twenty (G20) in Bengaluru on Tuesday.

This is the first meeting of the Finance Track of G20 under India’s Presidentship and is expected to set the agenda for the meeting of the G20 finance ministers and central bank governors, scheduled to be held in Bengaluru as well, in February.

The three-day FCBD meeting will see discussions on the global macroeconomic situation, international financial architecture, sustainable infrastructure and its financing, international taxation, and financial inclusion, the finance ministry tweeted.

The ministry and the Reserve Bank of India (RBI) are jointly co-hosting the FCBD meeting.

Heading the meeting are Economic Affairs Secretary Ajay Seth and RBI Deputy Governor Michael Patra. Chief Economic Advisor V Anantha Nageswaran was also present.

“In the first session on global economy and framework for growth, the G20 finance deputies led the discussions on global economic outlook and risks, besides policy responses, to tackle emerging global challenges. Members spoke on immediate challenges of global inflation, food and energy security, along with deliberation on the issue of climate change,” the ministry said.

As a result of Russia’s invasion of Ukraine and the resulting sanctions by Western economies, about a third of the global economy is expected to slip into recession in calendar 2023, according to the International Monetary Fund.

The Finance Track of the powerful G20 grouping is older than the Sherpa Track since G20 was formed with the intention of governance of the global economy.

There are five working groups in the Finance Track, dealing with issues such as infrastructure, climate and sustainable infrastructure financing, global taxation, debt levels, and sustainability, especially in low-income nations, multilateral institutions, cross-border financial crimes, and regulation of cryptocurrency and other digital assets.

Finance Minister Nirmala Sitharaman has spoken about the key focus areas of the Finance Track. Last month, she had said that climate and sustainable development financing, multilateral institution reforms, regulation of digital assets, impact on developing economies from the spillovers of the actions of Western central banks, energy and food security in the backdrop of the war in Europe, and sanctions on Russia and their impact on the global economy could be items on the agenda.