SAO PAULO - Strong US economic growth has been a “key driver” of better than expected global growth, US Treasury Secretary Janet Yellen will tell a news conference on Feb 27 ahead of this week’s meeting of Group of 20 finance officials in Sao Paulo, Brazil.
In excerpts of her remarks released by Treasury, Dr Yellen said the International Monetary Fund (IMF) and other forecasters had projected a broad-based slowdown in the global economy in 2023 that did not happen.
Instead, growth came in at 3.1 per cent, exceeding expectations, and inflation fell, with prices expected to continue falling this year in about 80 per cent of economies, she said.
“Going forward, we remain cognizant of the risks facing the global outlook and continue to carefully monitor the economic challenges in certain countries, but the global economy remains resilient,” she said.
Dr Yellen said US economic strength had underpinned global growth, fuelled by Biden administration policies supporting businesses hit hard by the Covid-19 pandemic and investments in domestic manufacturing, clean energy and infrastructure.
US inflation had also declined significantly from its peak and the US labour market was historically strong, she said, with the prime-age labour force above its pre-pandemic level and the unemployment rate near historic lows.
“Had a US recession come in 2023, like many predicted, global growth would have been thrown off track. While there are risks to our outlook, America’s growth has consistently exceeded projections,” Dr Yellen said.
The IMF in January edged its global growth outlook to 3.1 per cent in 2024, up two-tenths of a percentage point from its October forecast, and left its 2025 forecast unchanged at 3.2 per cent.
IMF chief economist Pierre-Olivier Gourinchas said the global lender’s updated World Economic Outlook showed a “soft landing” was in sight, but overall growth and global trade remained lower than the historical average.
IMF spokeswoman Julie Kozack last week told reporters the global lender would take new information on the Japanese and British economies, which both slipped into recession, into account as it prepared a new global forecast to be released in April. REUTERS
