SARB Governor on G20 2025 April Ministerial Meeting

Global economic leaders gathered at the G20's April 2025 Ministerial meeting in Washington to discuss the potential impact of U.S. President Donald Trump's import tariffs on global disinflation. South African Reserve Bank Governor Lesetja Kganyago emphasized that it is still too early to determine the full magnitude of this impact. The meeting, led by National Treasury and the South African Reserve Bank, highlighted the importance of supporting an open, rules-based, and transparent trading system with the World Trade Organization at its core. There was a consensus among members that current trade rules need to be re-examined to ensure fairer trade practices and address global imbalances. The meeting also stressed the need for immediate and coordinated efforts to de-escalate trade tensions, reduce volatility, and provide policy clarity. Participants acknowledged that uncertainty poses a significant challenge to the global economy, likening it to a 'tax without revenue.' It was emphasized that decisive actions and clear policies are essential to prevent uncertainty from becoming the new norm. Despite heightened volatility in financial markets, the core of the global financial system was deemed resilient, thanks in part to regulatory reforms implemented after the 2022 financial crisis. Leaders agreed that these reforms must continue to ensure stability and certainty in the global financial system. The economic situation varies among countries, with some having fiscal space to stimulate demand and others needing to focus on rebuilding financial reserves. Central banks are facing the complex task of managing disinflation, with some countries experiencing a slowdown in the process. While some central banks have the flexibility to provide monetary accommodation, others are grappling with deviations from their inflation targets and must remain vigilant. Overall, the discussions underscored the need for global cooperation and proactive measures to address economic challenges and promote sustainable growth. In his remarks, Governor Kganyago emphasized that the reflections shared at the meeting are important considerations for policymakers and economic stakeholders as they navigate the evolving global economic landscape.