G7 finance chiefs, central bankers commit to implementing plan to diversify supply chains by year's end

May 16, 2023

Finance ministers and central bankers of the Group of Seven (G7), ending a three-day summit in, Japan, issued a communiqué on Saturday vowing to implement a plan to diversify supply chains by year's end while stating: "We need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook."

The plan would use aid to increase the importance of low- and middle-income countries in energy-related supply chains. The communiqué said: "Diversification of supply chains can contribute to safeguarding energy security and help us to maintain macroeconomic stability".

The communiqué credited Great Recession-era legislation as keeping markets "resilient" against turmoil in the banking system.

The central bank leaders committed themselves to countering "elevated" inflation.

The group expressed intentions to enforce sanctions on Russia over its invasion of Ukraine and called "for an immediate end of Russia's illegal war against Ukraine, which would clear one of the biggest uncertainties over the global economic outlook".

Japanese Finance Minister told press, "through the pandemic, we learned that supply chains tended to depend on a limited number of countries or one country", noting this caused shortages across countries of items including medicines and computer chips. Suzuki described economic security during the global transition to clean energy as dependent on diversifying the relevant supply chains.

Suzuki said attendees discussed the possibility of the United States defaulting on its debts at a dinner on Thursday, declining to give more details. While not in the communiqué, Reuters characterized it as prominent in talks.

US Treasury Secretary previously warned a default could occur in weeks if US lawmakers do not lift the nation's debt ceiling.

United Kingdom Chancellor said that outcome would be "absolutely devastating".

G7 leaders are scheduled to gather beginning Friday in.