At the closing session of the G20 summit in Bali, Indonesia, Prime Minister Narendra Modi formally took over the presidency of the group and promised to make it a “catalyst for global change” at a “time when the world is simultaneously grappling with geopolitical tensions, economic slowdown, rising food and energy prices and the long-term ill-effects of the pandemic”. India’s official presidency of the G20 will begin from December and India will host the following annual assembly of the group in September 2023.

What precisely is the G20? How necessary is that this group on the planet and has it undergone any adjustments because it got here into being? Here are 4 charts that specify this intimately.

G20 international locations account for 85% of world GDP

This is the one most necessary assertion in regards to the G20’s financial significance within the world financial system. To ensure, the formation of G20 was about diversifying the financial management of the worldwide financial system relatively than concentrating it. In the wake of Asian Financial Crisis in 1999, finance ministers and central financial institution governors of the Group of Seven international locations (G7) – it’s the membership of superior economies on the planet – introduced their intention to “broaden the dialogue on key economic and financial policy issues among systemically significant economies and promote co-operation to achieve stable and sustainable world economic growth that benefits all”(https://bit.ly/3Gkr6xD). This announcement marked the official delivery of what subsequently got here to be referred to as the Group of Twenty international locations (G20). The first official assembly of the G20 leaders came about in Washington D.C in 2008, and since 2011, the G20 summit has been held yearly with member international locations taking rotational presidencies.

Data from the International Monetary Fund exhibits that the G20 economies collectively accounted for 85% of the worldwide output in 2022, which is marginally decrease than the 89% output share this group had in 1999. However, the financial dominance of this group turns into evident if one have been to take a look at the inhabitants share of those economies on the planet. In 2022, the G20 economies accounted for barely greater than 60% of the world inhabitants (62%), that means that 40% of the world inhabitants share and dwell throughout the remaining 15% of the worldwide output. The share of G7 international locations in world GDP and inhabitants is 43% and 9.8%, which underlines the central faultline within the world financial system — inequality.

See Chart 1: World output and inhabitants share of G20 economies in 2022

Emerging markets and India have elevated their financial weight inside G20

Data from the IMF additionally exhibits that the rising economies which are a part of G20 have considerably elevated their financial significance up to now twenty years; Ten rising economies which are a part of G20 embody China, India, Brazil, South Korea, Saudi Arabia, Argentina, Indonesia, Mexico, Russia and Turkey. While these rising economies have considerably elevated their output share in complete G20 output from 13.6% in 1999 to 36.5% in 2022, India has greater than doubled its share in G20 output from 1.6% in 1999 to 4% in 2022.

See Chart 2: India and rising markets’ share in complete G-20 output

Pandemic’s differential affect on G-20 international locations

The pandemic has affected the economies of those G20 nations in a different way. A comparability of the newest GDP numbers with the GDP numbers earlier than the start of the pandemic exhibits this. While few superior international locations (Australia, South Korea) and few rising economies (Turkey, China, Indonesia) confirmed important financial restoration, some international locations nonetheless lag behind their pre-pandemic ranges. To ensure, even in 2022, the GDP of Mexico, Russia and Turkey are anticipated to be behind their 2019 ranges by 1.6, 1.5 and 1.4 proportion factors respectively, exhibits IMF information. India’s GDP in 2022-23 is anticipated to be 8.5%, larger than its 2019-20 GDP in line with IMF projections.

See Chart 3: Difference in GDP of G20 economies in 2022 from 2019

Even the Ukraine conflict’s affect has been totally different on G20 international locations

Just as the worldwide financial system was making a restoration from the affect of the pandemic, the Russia-Ukraine conflict induced one more disruption. Once once more, the affect has been totally different throughout member international locations. A comparability of progress projections for the most important G20 nations earlier than the rise of the conflict in Ukraine, and the newest projections clearly exhibits this. If one takes IMF’s World Economic Outlook printed in January 2022 because the benchmark for progress outlook earlier than the start of the conflict and compares them with IMF World Economic Outlook’s October 2022 projections, it may be seen that projections for 2022 have been revised down for main G20 economies, besides Brazil, Saudi Arabia and South Africa. Even among the many group of economies whose projections have been revised down in October, the expansion revision for the US and Germany in 2022 are the very best (2.4 and a couple of.3 proportion factors respectively). This comparability excludes Russia.

See Chart 4: IMF Growth projections for main G20 economies in January and October

India takes the presidency of the G20 at a time when it’s anticipated to be the quickest rising main financial system on the planet . It stays to be seen whether or not it might probably persuade the leaders of this necessary group to take coordinated motion on financial points that embody each brief time period issues such because the vitality worth disaster in addition to structural issues akin to discovering frequent floor on problems with local weather finance.