A collapse of the ceasefire in Iran or a widening of the conflict would pose “serious additional risks” to global energy, supply chains, and economic stability, Treasurer Jim Chalmers has warned.
Mr Chalmers joined finance ministers from 10 US allies, including the United Kingdom, japan, and New Zealand, in signing a joint statement calling on the United States, Israel, and Iran to adhere to the ceasefire agreement.
However, the statement warned even a “durable resolution” to the conflict would continue to impact fiscal growth, inflation, and world markets.
It urged for governments to manage their economic recovery in a “co-ordinated, responsible and responsive way”.
“With government balance sheets constrained, we commit to ensuring that any domestic responses must be fiscally responsible and targeted at those who most need support,” the statement read.
“We reaffirm our commitment to open and rules-based trade in energy products.
“We commit to avoiding, and call on all countries to avoid, protectionist actions, including unjustified export controls, stockpiling and other trade barriers in hydrocarbon and other supply chains affected by the crisis.”
The governments also reaffirmed their commitment to “accelerate long-term energy diversification”, including through clean energy transition and “improved energy efficiency”.
“We welcome any steps countries may take to achieve these objectives,” it said.
Mr Chalmers is currently in Washington DC in talks with the International Monetary Fund and World Bank.
The statement welcomed any co-ordination between those organisations, as well as the International Energy Agency, to develop a “shared assessment of global economic impacts”.
“Vulnerable countries are particularly impacted, especially small and remote island states that rely on imported energy to meet basic needs,” it said.
“We call on the IMF and World Bank to provide a co-ordinated emergency support offer for countries in need, tailored to country circumstances and drawing on the full range and flexibility of their toolkits.
“We further welcome advice on domestic responses that are temporary, targeted, and effective, and encourage work to identify steps needed to protect long-term growth.”
The statement was also signed by Sweden, Netherlands, Finland, Spain, Norway, Republic of Ireland, and Poland.
