A draft communique seen by Reuters on Tuesday, July 23, 2024, shows that a group of 20 finance leaders is expected to cheer the growing likelihood of a global economic “soft landing” while warning of the risks from unspecified “wars and escalating conflicts.”

During a meeting this week in Rio de Janeiro, the G20 finance ministers and central bank chiefs still plan to highlight the risks of an uneven global recovery, which is hampered by persistent inflation.

“We are encouraged by the increasing likelihood of a soft landing of the global economy, although multiple challenges remain,” the draft communique said, referring to a scenario in which inflation is tamed without triggering a painful recession or sharp jump in unemployment.

By avoiding explicit mention of the conflicts in Ukraine and Gaza, diplomats are attempting to sidestep the disagreements between Russia and major Western nations that derailed a consensus at the finance chiefs’ gathering in February.

Brazilian negotiators said last week that the G20 had agreed to exclude geopolitical debates from a joint statement to focus on economic cooperation to tackle issues such as global poverty, climate change, and debt crises in less wealthy nations.

“Economic activity has proved to be more resilient than expected in many parts of the world, but the recovery has been highly uneven across countries, contributing to the risk of economic divergence,” the draft communique said.

The document flagged risks to the economic outlook, which remains broadly balanced. Faster-than-expected disinflation and technological innovations were cited among the upside risks.

On the other hand, the document noted downside risks such as escalating conflicts, economic fragmentation, and persistent inflation, which keep interest rates higher for longer.

In line with the Brazilian presidency’s focus on global inequality, the draft communique warned that “climate change … can substantially aggravate inequality challenges,” and flagged “debt distress” in “several low and middle-income countries.”

The draft document also intensified its call for reform of the International Monetary Fund, citing the “urgency and importance of realignment in quota shares to better reflect members’ relative positions in the world economy.”

Although little changed from Brazil’s chair summary in February, the draft communique included a call to resist protectionism as a standalone paragraph.

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