Delegates from the BRICS countries concluded that the outlook for the global economy is overshadowed by high risks of a slowdown. The fragile economic recovery could go off track in the near future.
On February 25, deputy finance ministers and central bank governors of the BRICS countries greenlighted priorities in the agenda set by China for the year ahead. China is taking over as the chair of BRICS for 2022. High-ranking officials highlighted grave headwinds in the global economy and an uncertain scenario of further COVID-19 developments around the world.
The participants in the summit took notice of positive and negative trends in the global economy. By and large, the current economic conditions create the background for cautious optimism, analysts note.
The major risk to economic and financial stability is soaring inflation around the world that was sparked off by protracted fiscal stimulus in advanced economies, mainly, in the US, the EU, and the UK. Analysts reckon that humongous financial aid set the stage for a capital outflow from emerging markets, volatility of their national currencies on Forex, and the increase in interest rates in developing countries.
This year, the infrastructure issue is high on the agenda suggested by Beijing for its BRICS allies. Russia’s finance ministry stated that central banks would proceed with their work on the improvement of the joint pool of forex reserves to be available under various scenarios. Besides, the BRICS countries intend to make concerted efforts to push ahead with revitalizing national economies in the wake of the coronavirus crisis.
Central banks of the BRICS countries commonly exchange information on cybercrimes in the financial sector and share their experience in the field of information security. This year, the People’s Bank of China has come up with a new joint project on analytical research into central bank digital currencies (CBDC) and transition finance. The nearest meeting for the BRICS finance ministers and central bank governors is scheduled for April 2022. Policymakers are due to discuss a lot of burning issues.
