NUSA DUA, Indonesia – The G20 said on Friday persistent trade tension within the group was affecting market confidence and increasing financial volatility.
Nicolas Dujovne, finance minister of Argentina, this year’s G20 chair, said it was imperative to resolve ongoing trade disputes, at a press conference following the group’s two-day meeting held in Bali, Indonesia, on the sidelines of the International Monetary Fund and World Bank annual meetings.
“International trade is an important engine of growth and we need to resolve tensions, which can negatively affect market sentiment and increase financial volatility,” Dujovne said.
“The G20 can play a role in providing the ground for discussions. But the differences that still persist should be resolved by the members that are directly involved in the tensions,” he added.
Although the Argentine minister did not name China and the United States, it was clear that the trade war between the world’s two largest economies, which has been intensifying in recent months, was the focus of the group’s discussions.
Dujovne also warned that expansion had become “less even across economies” and “some of the downside risks that have been discussed earlier in the year are starting to materialize.”
“As monetary policy continues to normalize in advanced economies financial conditions tighten in emerging ones and several emerging economies have experienced market volatility,” he said.
Argentina is a clear example of these financial pressures as it has had to seek a $57.1 billion three-year loan from the IMF after the collapse of the peso.
Other emerging economies, including Turkey, South Africa and Indonesia have also seen the depreciation of their currencies against a stronger dollar, bolstered by a progressive increase in interest rates in the US.