World economy is on track for soft landing - G20

The news: A draft closing statement for this week’s G20 meeting in Brazil, seen by Bloomberg, says that the global economy has a growing chance of achieving a soft landing, as global growth and falling inflation continues to bolster resilience.

The numbers: Last month the International Monetary Fund upped its forecast for global economic growth to 3.1% this year. At a G20 press conference on Tuesday, secretary of the US Treasury Janet Yellen said that inflation is also expected to fall across around 80% of economies.

The context: The draft statement dated February 23 reads: “We note that the likelihood of a soft landing in the global economy has increased […] Risks to the global economic outlook are more balanced. Upside risks include faster-than expected disinflation.” It adds that inflation has receded in most economies as a result of appropriate monetary policies, easing of supply chain bottlenecks and moderating commodity prices.

During her Sao Paolo address, Yellen emphasised the strength of the US economy as a key driver of positive global economic performance, explaining that Biden’s policies have led to strong US GDP growth. Yellen added that had the US suffered a recession in 2023 as had been predicted, global growth would have been thrown off track, and that the US’s path to a soft landing underpinned global growth.