Group of 20 finance leaders meeting in Brazil this week are expected to make only a passing reference in their closing statement to regional conflicts, according to a draft version seen by Reuters, due to deep divisions over wars in Gaza and Ukraine.
US Treasury Secretary Janet Yellen on Tuesday called on allies to move forward urgently to unlock the value of frozen Russian sovereign assets to help Ukraine.
"Risks to the global economic outlook are more balanced," with faster-than-expected disinflation and more growth-friendly fiscal consolidation underpinning growth, the draft said.
"Among the downside risks to the global economy are [wars and] escalating conflicts, geoeconomic fragmentation, rising protectionism, and trade routes disruptions," the draft communique said.
The reference to "wars" in brackets reflects efforts to reach a consensus on the final language, said a person familiar with the matter.
G20 finance officials are expected to set aside geopolitics and focus on global economic issues as they gather in Sao Paulo this week.
Brazil's coordinator of the finance track at G20, Tatiana Rosito, said on Tuesday that the group is moving towards a short communique that reflects Brazilian priorities.
In the draft communique, the G20 finance leaders gave an optimistic view on the outlook for price pressures. Inflation has receded in most economies, they said, thanks in part to "appropriate" monetary policies, easing supply chain bottlenecks and moderating commodity prices.
The draft also said the G20 group reaffirms their existing exchange-rate commitment, which warns against excess volatility and volatile currency moves as undesirable for economic growth.
Meanwhile, Yellen said Israel has agreed to resume tax revenue transfers to the Palestinian Authority to fund basic services and bolster the West Bank economy. She called on Israel to allow commerce to resume there for the sake of its own economy and that of the Palestinians.
In the remarks, Yellen said she also urged Israeli Prime Minister Benjamin Netanyahu in a recent letter to reinstate work permits for Palestinians and reduce barriers to commerce within the West Bank.
"These actions are vital for the economic well-being of Palestinians and Israelis alike," Yellen said.
"We continue to explore options for strengthening the West Bank economy" following an executive order issued by President Joe Biden earlier this month, Yellen added.
Yellen said Washington supported the World Bank’s commitments to emergency food security assistance in Gaza and economic support for the West Bank, and other ongoing loan programs by regional development banks and the International Monetary Fund in neighboring Egypt and Jordan.
She said Washington had not seen a significant impact of the conflict on the global economy but would continue to monitor the situation closely.
She noted that Washington had also led efforts to counter the financing of Hamas and responded to Houthi attacks in the Red Sea.
