Moscow: A rise in budget deficits in countries across the world carries the risk of high global inflation, Russian President Vladimir Putin said in a video conference address to a G20 summit on Saturday.
"Excessive stimulus programs have led to overall instability and an increase in the prices of financial assets and goods on certain markets, including the energy and food markets. A serious budget deficit facing developed economies is the basic cause of these processes," Putin pointed out, adding that it "creates the risk of high global inflation in the medium term."
He noted that the Russian government had been able to ensure a budget surplus in 2021 and tighten monetary policy. "As for the G20 nations in general, the situation is slightly different. In 2017-2019, the average budget deficit stood at 3.8% of the GDP but it rose to 11.2% in 2020 amid the coronavirus pandemic, and this year, though the rate has dropped, it still remains rather high at 8.7%. I would like to point out that it is the United States that accounted for 40% of the G20's overall budget deficit in 2020-2021," the Russian leader stressed, adding that the entire global economy depended on the United States' economic situation.
According to Putin, it is important to take steps to normalize budget and monetary policies, improve ways to manage the economy's demand patterns and set economic priorities to resolve inequality issues and raise living standards.