G-20 Discord Likely to Thwart Efforts to Boost Sagging Global Economy

Europe may already be slipping into recession as Russia throttles its energy supplies in retaliation for Western sanctions over Moscow’s invasion of Ukraine. Inflation spurred by that conflict is squeezing consumers and businesses around the world and heaping pressure on poorer countries through spiraling import bills for food and energy.

In response, central banks, foremost among them the U.S. Federal Reserve, have been aggressively raising interest rates, intensifying the squeeze on growth and driving up debt-servicing costs for heavily-indebted emerging-market governments.

“While we look at this gloomy picture, even more troubling is the trend towards increased fragmentation—at a time when we need each other the most,” International Monetary Fund Managing Director

Kristalina Georgieva

said Sunday. “And I am very concerned that we may be sleepwalking into a world that would be poorer and less secure as a result.”

A reprieve from those economic pressures looks remote. Central banks are telegraphing further interest-rate increases ahead. The U.S. and its allies are seeking to cap the price of Russian oil, while Saudi Arabia has led a push for oil exporters to cut production, both of which risk stoking energy prices further by squeezing supplies.

Meanwhile, the U.S. and China—the world’s two largest economies—are at loggerheads over issues ranging from trade and technology to national security and Taiwan, with aides setting low expectations for any significant thaw in relations when President Biden meets on Monday with Chinese leader

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