Just six months in office, Olaf Scholz hosts Sunday’s G7 summit at a time of peril for the west, as soaring inflation, an energy crisis and the threat of recession test the wealthiest economies’ ability to deploy a co-ordinated response.
The meeting — also attended by the leaders of the US, UK, France, Italy, Japan and Canada — comes as economists across the world downgrade their growth forecasts and revise up their inflation projections. Energy and food prices have spiralled higher since Russia’s invasion of Ukraine in February, and this month central banks have raised rates by bigger margins than markets expected.
“It would have been impossible to imagine at the last G7 summit that we’d be facing a situation like this,” said Holger Schmieding, chief economist at Berenberg Bank. “Things are pretty bad and could get even worse.”