G20 finance chiefs back tax deal, pledge to sustain recovery, watch inflation
Finance leaders from the G20 major economies endorsed a global deal to revamp corporate taxation and pledged to sustain fiscal support for their economies while keeping a close eye on inflation, Trend reports citing Reuters.
The G20 finance ministers and central bank governors also said in a communique issued after a meeting in Washington that the International Monetary Fund should establish a new trust fund to channel a $650 billion issuance of IMF monetary reserves to a broader range of vulnerable countries.
The finance leaders noted in their statement that economic recovery "remains highly divergent across and within countries" and is vulnerable to new variants of COVID-19 and an uneven pace of vaccinations.
"We will continue to sustain the recovery, avoiding any premature withdrawal of support measures, while preserving financial stability and long-term fiscal sustainability, and safeguarding against downside risks and negative spillovers," the G20 finance leaders said in the statement.
Given rising inflation pressures driven by supply chain bottlenecks and shortages as economies struggle to normalize, the leaders said that central banks are "monitoring current price dynamics closely."
"They will act as needed to meet their mandates, including price stability, while looking through inflation pressures where they are transitory and remaining committed to clear communication of policy stances," the G20 communique said.
Bank of Italy Governor Ignazio Visco told a news conference that G20 finance leaders still view elevated inflation in many advanced countries as caused by transitory factors that will fade, such as supply bottlenecks, semiconductor shortages, shipping delays and weather problems.
The G20 finance leaders are meeting in Washington on the sidelines of the IMF and World Bank annual meetings, which come just days after 136 countries agreed to adopt a 15% minimum corporate tax and partially reallocate taxing rights for large profitable multinational companies to countries where they sell products and services.