Agencies: G7 finance ministers warned on Saturday of increasing global economic uncertainty, concluding a three-day meeting overshadowed by the US debt ceiling crisis and the repercussions of the Russia-Ukraine war.

The meeting took place in Niigata, Japan, amid concerns over a potential US debt default that fueled the uncertainty surrounding global economic forecasts, already clouded by rising inflation rates and the US banking crisis.

The finance ministers said in a statement after the meeting, "The global economy has shown resilience in the face of multiple shocks, including the COVID-19 pandemic, Russia’s war on Ukraine, and the associated inflationary pressures."

The ministers added in the statement, "We need to remain vigilant and maintain agility and flexibility in our macroeconomic policies amid growing uncertainty about global economic outlooks."

The statement did not refer to the crisis related to the US debt ceiling faced by the markets, alongside rising borrowing costs due to the monetary tightening policies of the US and European central banks.

US Treasury Secretary Janet Yellen said on Friday that she would meet with top Wall Street bankers this week to discuss a potential US default, which would be the first since 1789.

World Bank Warning

For his part, World Bank President David Malpass confirmed that the possibility of a US debt default would increase the problems facing the slowing global economy.

Malpass told Reuters on the sidelines of the meeting, "It’s clear, the crisis faced by the world’s largest economy will negatively affect everyone."

Regarding banking system problems, the statement said policymakers would address "gaps in data, supervision, and regulation in the banking system."

The finance ministers maintained their April assessment that the financial system is "resilient" thanks to regulatory financial reforms implemented after the 2008 global financial crisis.

The statement showed that amid warnings of ongoing "rising" inflation, the G7 central banks confirmed their commitment to price stability and ensuring inflation expectations remain anchored.

Participants again condemned Russia’s war on Ukraine and pledged to enhance monitoring of cross-border transactions between Russia and other countries.

Supply Chains

The discussions also touched on matters related to China, with Japan, which chaired this year’s meeting, leading efforts to diversify supply chains and reduce heavy reliance on the world’s second-largest economy.

The finance ministers set a deadline by the end of the year to launch a new plan to diversify global supply chains in the statement.

The new plan includes the G7 providing assistance to low- and middle-income countries to enable them to take a larger role in supply chains for energy-related products, such as metal refining and manufacturing supplies processing.

The plan, whose main pillars were unveiled in April, is expected to be implemented in cooperation with the World Bank and other relevant international organizations, according to the statement.

On another note, the G7 finance ministers united in their support for Ukraine and showed determination to impose sanctions on Russia due to its aggression.

The finance ministers and central bank governors concluded three days of talks in Niigata, Japan, with a joint statement pledging to control inflation while helping those most affected by rising prices.