high spending in Western countries led to an increase in global central bank rates – Kommersant

Finance Minister Anton Siluanov, after a meeting of G20 central bank governors, said that large spending by Western countries, including during the COVID-19 pandemic, as well as inflationary factors led to high interest rates around the world.

The meeting of G20 finance ministers and central bank governors took place on October 12–13 in Marrakech. As Anton Siluanov reported, at the meeting the finance ministers came to the conclusion that high interest rates will remain in the medium term.

“The reasons for these high rates are clear – the large expenses that were carried out by the countries of the Western economy, primarily in COVID-19, are unjustifiably high. And recently, of course, additional inflationary factors have had an impact. And this led to an increase in the interest rate,” said the Russian minister, his words are quoted in Telegram channel Ministry of Finance.

According to the minister, Russia insisted at the meeting to “bring the budgets back to normal.” “Because we see: debts are growing, deficits are growing. Where do low rates come from? Therefore, without normal budget consolidation, without working with expenses, with resource support, this is very difficult. We see very well how this is happening in the Russian Federation. But without this, it is impossible to combat inflation and reduce the cost of money in the economy,” he noted.

A September report from the Organization for Economic Co-operation and Development (OECD) notedthat the global economy is slowing amid the fight against inflation. Inflation rates are slowing in most countries, but core inflation remains stubbornly high. Experts explain this, among other things, by delays in fully reflecting the surge in energy prices for the period 2021–2022 in the cost of goods.

More details in the material “High rates hit global growth”.

Anastasia Larina