G7 performance on macroeconomic policy

Since the G7 summit’s inception in 1975, global economic stability has anchored its agenda. Traditionally, the G7 has addressed macroeconomic policy challenges by working to strengthen non-inflationary growth. Despite relatively high compliance with macroeconomic policy commitments, the G7’s deliberations and decision-making have consistently declined in its recent years, reflecting missed opportunities for the G7’s role in global economic governance.

Deliberations

Recent G7 summits have contributed progressively fewer words to the summit’s 30,535-word total on macroeconomic policy. In 1975, the first summit gave 52% of its consensus text to macroeconomics. This proportion slid to 12% by 1981, as the 10%–20% range became the norm in the following decades, despite spikes to 48% in 1982, 33% in 1985 and 21% in 1993. Starting in the early 1990s, the percentage of macroeconomic references vis-à-vis the overall G7 text dropped to single digits, falling as low as 2% in 2019. The Covid-19 pandemic in 2020 stimulated a resurgence of G7 conclusions on macroeconomic policy, accounting for 30% of the total text adopted at the virtual G7 summit in 2020. This figure dropped to 6% and remained there until 2023, and then fell further to 4% at the most recent 2024 Apulia Summit.

Decisions

The total of 339 G7 commitments on macro- economic policies account for 4% of all the 7,693 commitments made in G7 history. This puts macroeconomics 12th among all G7 subjects with commitments. Summits in the first decade (1975–1987) produced an average of 21% macroeconomic commitments in a given year. From 1988 to 2022, this average dipped to 6%, with the exception of the virtual summit hosted by the United States in March 2020. This Covid-focused meeting dedicated 32% of its commitments to macroeconomics. However, the momentum was not maintained – the focus on macroeconomic policy quickly dissipated and only accounted for 4% of commitments made in 2021, 3% in 2022, 2% in 2023 and 2% in 2024.

Delivery

Of the 31 macroeconomic commitments assessed for compliance by the G7 Research Group, G7 members scored 84% on average, well above the G7 average of 77% across all subjects. In the macroeconomic domain, no clear trend is observed across compliance levels by year, as the figures do not change much; however, notable dips to approximately 60% compliance occurred in 2003, 2004, 2014 and 2016. In the years producing a high number of macroeconomic conclusions and commitments, 100% compliance came on commitments made in 1996 and 1999. Very high compliance was also observed for commitments made in 2008 and 2018 with 100% each, 2011 with 95%, as well as 2015 and 2021 with 91% each, in part correlated with major global macroeconomic shocks. Most recently, by December 2024 compliance with the assessed Apulia Summit’s macroecononmic commitment was 94%.

The most compliant G7 members are Canada and the United States at 89% each. The European Union, France and the United Kingdom each have 87%, and Germany has 84%. Japan’s compliance is 79%. Italy ranks last with 71%.

Recommendations

As the 2025 G7 host, Canada has identified “building stable and inclusive economies that benefit everyone” as a priority. To improve the G7’s record of macroeconomic compliance, the Kananaskis Summit should introduce concrete references to ministerial mechanisms and the private sector to anchor the G7’s commitments. Previous trends suggest that references to business stakeholders correlate with higher compliance, as the two assessed macroeconomic commitments with such references averaged 97% compliance. An increased number of meetings of finance ministers and central bank governors – designed with a specific focus on macroeconomic stability and a remit mandate to report back to G7 leaders – also helps, especially in light of slowing growth and increasing inflation rates among G7 economies.