Financial leaders from major G20 economies have endorsed a global deal to overhaul corporate taxation and have pledged to maintain budget support for their economies while closely monitoring inflation.
G20 finance ministers and central bank governors also said after a meeting in Washington on Wednesday that the International Monetary Fund should establish a new trust fund to channel a $ 650 billion issue of currency reserves to a wider range of vulnerable countries.
Financial leaders noted in a statement that the economic recovery “remains widely divergent between and within countries” and is vulnerable to new variants of COVID-19 and an uneven pace of vaccinations.
“We will continue to support the recovery, avoiding any premature withdrawal of support measures, while preserving financial stability and long-term fiscal sustainability, and protecting against downside risks and negative spillovers,” said the G20 financial leaders in the press release.
Given mounting inflationary pressures from bottlenecks and supply chain shortages as economies struggle to normalize, leaders said central banks “are closely monitoring current price dynamics.”
“They will act as necessary to fulfill their mandates, including price stability, while examining inflationary pressures where they are transient and remaining determined to clearly communicate their political positions,” the G20 statement said.
Bank of Italy Governor Ignazio Visco told a press conference that G20 financial leaders still view high inflation in many advanced economies as being caused by transient factors that will reduce, such as bottlenecks, semiconductor shortages, delivery delays and weather issues.
âBut it can take months to go away, so we have to be prepared and communicate really well about how we see the issues,â Visco said.
G20 financial leaders also pledged to work to address tool shortages to tackle the COVID-19 pandemic in low- and middle-income countries over the coming months, including vaccines, therapeutics and drugs. diagnostics.
G20 financial leaders are meeting in Washington on the sidelines of the annual IMF and World Bank meetings, which come just days after 136 countries agreed to adopt a minimum corporate tax of 15% and partially reallocate corporate taxes. Tax rights of large, profitable multinational companies to countries where they sell products and services.
G20 leaders endorsed the OECD tax deal and called for the swift development of “model rules” to guide countries’ implementation of the deal and “ensure the new rules go into effect. globally in 2023 â.
Associated Australian Press