Washington DC, October 12, 2022
We, the G7 Finance Ministers and Central Bank Governors, met in Washington DC We were honored to be joined by the Ukrainian Finance Minister. We were also joined by the heads of the International Monetary Fund, the World Bank Group, the Organization for Economic Co-operation and Development and the Financial Stability Board.
- We remain steadfast in our support and solidarity with Ukraine. Likewise, we remain united in our condemnation of Russia’s war of aggression against Ukraine and the tragic human casualties resulting from the war and reiterate the statement made by our leaders on October 11, 2022.
- Russia’s war of aggression is causing major global economic disruption, adding strain to a global economy that was only beginning to recover from the pandemic and overcome mismatches between supply and demand. We urge Russia to immediately end its unjust and brutal war – this is both a moral imperative and the most important priority to improve the prospects for the world economy in this difficult juncture. Russia’s war has caused further substantial increases in commodity prices, including energy and food, exacerbating high levels of inflation in many economies around the world and felt disproportionately by countries at low and middle income.
- The G7 central banks are firmly committed to achieving price stability, in accordance with their respective mandates. To this end, central banks are closely monitoring the impact of price pressures on inflation expectations and will continue to appropriately calibrate the pace of monetary policy tightening in a data-dependent and clearly communicated manner. by ensuring that inflation expectations remain well anchored, while being mindful of limiting the impact on economic activity and cross-border spillovers.
- We will also continue to closely monitor global markets given the recent volatility and welcome the Financial Stability Board’s oversight and analysis. Recognizing that many currencies have moved significantly this year with increased volatility, we reaffirm our exchange rate commitments as developed in May 2017.
- We will continue to work together to mitigate the impact of war around the world, especially for low- and middle-income countries, and on our own economies and people by providing the necessary support on a temporary and targeted basis. As we adjust the stance of our fiscal policy in this context, we remain committed to a medium-term macroeconomic policy geared towards stability and growth, which sets us firmly on the path to medium-term sustainability of public finances and of a resilient financial sector.
- Against the backdrop of the particularly devastating effect of Russia’s war of aggression on global food security and nutrition, we warmly welcome the International Monetary Fund’s new food shock window to help meet urgent balance needs. payments linked to food insecurity, especially in vulnerable countries. We fully support the scaling up of the response by international financial institutions and welcome the commitment of the World Bank to provide US$30 billion and the commitment of the International Finance Corporation to provide US$6 billion for food security, including efforts to encourage food and fertilizer production in alignment with sustainability criteria, strengthen food systems and their resilience, remove unjustified trade restrictions and support vulnerable households and producers.
- The G7 will continue to support Ukraine for as long as necessary and remain firmly committed to meeting Ukraine’s urgent short-term financing needs. Since the beginning of this brutal and unjustifiable war, the G7 and the international community have provided strong support to Ukraine, showing great unity and strength to meet Ukraine’s urgent humanitarian, material and financial needs. For 2022, we have mobilized $33.3 billion in budget support, including $4.5 billion in additional grants recently announced by the United States, to help Ukraine close its financing gap and continue to ensure the provision of basic services to the Ukrainian people. The planned additional support to Ukrainian state-owned enterprises and the private sector through the European Bank for Reconstruction and Development and the International Finance Corporation amounts to US$3.4 billion. The aforementioned support is in addition to the ongoing G7 military, humanitarian and early recovery support to Ukraine.
- Thanks to our efforts, disbursements of budget support to Ukraine already amount to US$20.7 billion in 2022. With the disbursement of additional aid planned for the remaining months of this year, the needs Ukraine’s most urgent financial needs should be covered for 2022. Together with the international community and in close cooperation with the Ukrainian government, we remain committed to supporting Ukraine in the months and years to come. Ukraine faces a significant funding gap in 2023 to continue providing basic services, address the most critical infrastructure gaps, and maintain a stable economy. We support the IMF’s close engagement with Ukraine and warmly welcome the IMF Executive Board’s approval of an additional $1.3 billion in emergency assistance for Ukraine. We also appreciate the commitment of the World Bank Group and the rapid disbursements of the resources mobilized. We welcome Ukraine’s request for a staff-monitored program with Executive Board involvement to help Ukraine develop and adhere to a coherent macroeconomic framework, identify financing needs and thus progress towards a full-fledged IMF program, to be followed as soon as possible. We also support the work that donors and international financial institutions are doing with Ukraine to build a viable and inclusive platform for Ukraine’s reconstruction.
- We welcome that the Group of Creditors of Ukraine and the Ukrainian government entered into a memorandum of understanding on September 14, 2022 to implement a suspension of debt service until the end of 2023, to complete the request made by Ukraine to private creditors. The move eases pressure on Ukraine’s liquidity and allows its government to maintain critical spending despite Russia’s war of aggression. This initiative also supported the Ukrainian government’s landmark agreement with private bond and warrant holders to defer debt payment for two years. We urge all other official bilateral creditors to quickly reach an agreement with Ukraine on a suspension of debt service.
- We reaffirm our shared commitment to our determined and coordinated sanctions response to Russia’s war of aggression – including recent and forceful actions in response to Russia’s fraudulent attempt to annex sovereign Ukrainian territory. We remain committed to fully implementing and enforcing our economic and financial sanctions and remain vigilant against circumvention, evasion and substitution of sanctions. We reaffirm that with our measures we are not targeting food; we allow the free movement of agricultural products and make every effort to minimize potential negative impacts and spillovers on third countries, in particular low- and middle-income countries.
- Recalling the statement of the G7 Finance Ministers of September 2, 2022, we reaffirm our common political intention to finalize and implement a comprehensive ban on services that enable the maritime transport of crude oil and petroleum products of Russian origin in the world – the provision of such services would only be permitted if petroleum and petroleum products are purchased at or below a ceiling price. We welcome Australia’s membership in the price cap coalition. We confirm that the coalition has made significant progress on all key aspects since its establishment in September and continues to work to align implementation with the timeline of related measures under the sixth EU sanctions package. We emphasize that by stabilizing global oil prices and already putting downward pressure on Russian revenues, the price cap would have the potential to be particularly beneficial to countries, especially vulnerable low- and middle-income countries. , suffering from high energy and food prices, aggravated by Russia’s war of aggression. We also emphasize that industry in all countries can continue to use coalition shipping services if purchases are at or below the ceiling price, regardless of formal coalition participation.
- In line with the commitments made by G7 leaders at Elmau, we continue to encourage oil-producing countries to increase their production in order to reduce volatility in energy markets. We will continue to engage OPEC+ countries on this critical issue amid tight supply conditions despite their recent disappointing decision.
Group of Creditors of Ukraine: Canada, France, Germany, Japan, United Kingdom and United States of America. The Group’s observers are Australia, Austria, Belgium, Brazil, Denmark, Finland, Ireland, Israel, Italy, Korea, Netherlands, Norway, Spain, Sweden and Switzerland.