Russia’s war ‘greatest challenge’, says Yellen

Russia's war in Ukraine poses the greatest threat to the global economy, U.S. Treasury Secretary Janet Yellen said yesterday as G20 ministers prepare to start talks in Indonesia.

Moscow's invasion has sent inflation soaring at a time when the world is struggling to recover from the Covid-19 pandemic, endangering the gains of the past two years and threatening widespread hunger and poverty.

"Our greatest challenge today comes from Russia's illegal and unprovoked war against Ukraine," she said on the resort island of Bali ahead of a meeting between finance ministers from the world's top economies and central bank governors today and on July 16.

"We are seeing negative spillover effects from that war in every corner of the world, particularly with respect to higher energy prices, and rising food insecurity," she added.

"The international community must be clear-eyed about holding Putin accountable for the global economic and humanitarian consequences of his war."

Yellen said she will continue to press G20 allies at the meeting for a price cap on Russian oil to choke off Putin's war chest and pressure Moscow to end its invasion while bringing down energy costs.

"A price cap is one of our most powerful tools," she said, adding that a limit would deny Putin "the revenue his war machine needs."

She expressed hope that India and China would join such a cap, saying it "would serve their own interests" to put downward pressure on prices for consumers across the world.

But she refused to be drawn on whether Western officials will stage a multi-nation walkout when Russian officials speak, as they did at a G20 meeting in Washington in April.