News Digest: G7 finance heads warn of global distress over US debt crisis
May 15, 2023
Finance leaders representing the G7 grouping of rich countries have forecast increasing uncertainty in the global economic scenario with growing US debt ceiling stalemates garnering more attention for the first time over the Russia-Ukraine conflict, a report says.
The leaders, who met in Niigata city of Japan in the backdrop of a US default, said the global economy had shown resilience against multiple shocks including Covid-19, the war in Ukraine and associated inflationary pressures. While the official statement didn’t mention the US debt ceiling stalemate, it figured constantly in discussions.
The stalemate has hit markets as borrowing costs have risen on aggressive monetary tightening by the US and European central banks. The G7 leaders sought agility in macroeconomic policies but did not mention the US debt ceiling stalemate in any official statement. Meanwhile US Treasury Secretary Janet Yellen said she would meet Wall Street bankers soon over the debt default, the first since 1789, if it happens.