Economic resilience key to weathering shocks: Al-Jadaan

Finance Minister Mohammed Al-Jadaan said that recent experiences have underscored the importance of strengthening economic resilience

Saudi Arabia’s Finance Minister Mohammed Al-Jadaan said the global economy has shown resilience in the face of shocks but has also become more exposed to risks.

He noted that recent experiences have underscored the importance of strengthening economic resilience by diversifying production alternatives, ensuring inventory availability and maintaining infrastructure with spare capacity, as these represent the first line of economic defense against shocks.

Speaking at the second meeting of G20 finance ministers and central bank governors, held under the US presidency of the group in Asheville, North Carolina, Al-Jadaan said external surpluses and deficits may reflect differences in economic conditions and structures across countries and do not necessarily constitute imbalances.

He added that effectively addressing global imbalances requires looking beyond trade flows to include domestic fiscal and economic conditions, as well as the structural factors driving them.

Al-Jadaan stressed the importance of strengthening economies’ ability to achieve strong and sustainable long-term growth, adding that growth constraints vary from one economy to another and evolve as economies develop.

Enhancing growth potential, he explained, requires identifying the most significant constraints at each stage and tailoring policies and reforms to the nature and evolution of these challenges.

Al-Jadaan said building a more robust international framework to address debt challenges is not limited to dealing more effectively with debt crises in vulnerable countries, but also requires curbing the accumulation of debt that does not contribute to sustainable economic and development returns.

He stressed that strengthening countries’ capacity to assess their financing needs and manage debt sustainability is a key pillar in preventing liquidity pressures from developing into deeper debt crises.

According to a ministry statement, Al-Jadaan, finance ministers and central bank governors also exchanged views with private-sector leaders in artificial intelligence (AI), given its role as a driver of innovation, productivity and economic growth.