Iran War, Inflationary Concerns Loom Over Paris G7 Meet
Finance minister of the Group of Seven (G7) will meet in Paris on Monday as economic growth concerns and the shocks of the Middle East conflict grab the spotlight in the high-profile conclave.
The meet also assumes significance as it comes days after a summit between the top two economies, the US and China concluded on Friday.
French President Emmanuel Macron’s priority is to “tackle imbalances,” and the summit will also be a platform to discuss key economic issues including America’s big budget deficits, dwindling investments in Europe and China’s vast trade surplus, Bloomberg reported.
The US-Israeli strikes on Iran and the resultant shocks of the Middle East conflict, which has pushed oil prices to over $100 a barrel, are also in focus.
“Opening the Strait of Hormuz and bringing the conflict to a lasting end are of the utmost importance in mitigating the impact on the economy,” Eurogroup President Kyriakos Pierrakakis said in a statement.
“Opening the Strait of Hormuz and bringing the conflict to a lasting end are of the utmost importance in mitigating the impact on the economy,” Pierrakakis said, reflecting global concerns about the protracted Middle East conflict.
The Eurogroup is a collective of ministers from the euro area represented at the G7 meeting by Pierrakakis, the Greek finance minister, CNBC reported.
The US, UK, Canada, France, Germany, Italy and Japan are the core members of the elite G7 group.
The summit also comes as investors worry about soaring inflation spurred by disruption of energy supplies in the aftermath of the Iran war. The Islamic Republic has choked the Strait of Hormuz, through which a fifth of global crude supplies passed before the conflict began. The US has in turn effected a naval blockade of Iranian ports and vessels. The steps have spurred a steep rise in energy prices globally, sparking inflationary pressures.
US President Donald Trump has reiterated that he isn’t worried about the finances of Americans while negotiating an end to the Iran war.
China has said after the Trump-Xi talks that it agreed with the US to lower levies on some products to promote trade, an indication of what analysts termed as stabilization of ties between the two economic superpowers.
The summit will also dwell on a especially commissioned report from leading economists and an analysis from the International Monetary Fund, Bloomberg report said.
Former IMF official Gita Gopinath had warned about the risks pose by the widening in global current account balances in March.
US Treasury Secretary Scott Bessent is likely to trumpet the US policy that the sure shot way to contain borrowing is through economic growth.
In an effort to widen the scope of participating nations, France has extended an invitation to BRICS countries India and Brazil, along with South Korea and Kenya to participate in talks on Tuesday. That meeting is likely to result in a separate communique.
