Good afternoon. Let me begin by thanking our hosts at the IMF and the World Bank, as well as all of you for joining us today.
Over the past two days, my discussions with ministers and governors have centered around a key theme: global growth. Fueling growth to create jobs and raise living standards is at the top of the global community’s economic agenda.
The United States economy remains a key source of strength around the globe, and during the second half of 2014, it expanded at a robust 3.6 percent annual rate. We have now experienced the longest streak of private sector consecutive job growth in our nation’s history, with unemployment falling to its lowest level in almost seven years.
Another vital engine of global growth is trade. We were pleased to see Congress introduce bipartisan legislation yesterday to encourage competition while promoting open trade and investment. Beyond supporting our workers and firms, Trade Promotion Authority will strengthen our hand as we forge trade deals that lift up the middle class in an evolving global economy. This legislation will also bolster our goal of achieving a comprehensive and high-standard Trans-Pacific Partnership Agreement. We strongly agree with Members of Congress that unfair currency practices need to be addressed and have worked to move major economies to market-determined exchange rate systems that are transparent, flexible, and reflect underlying economic fundamentals. We look forward to working with Congress, our domestic stakeholders, and our international partners to conclude this ambitious and important work.
While the U.S. economy is on a solid path, when we look across the world, we see that global growth remains modest. Growth in emerging markets is slowing even as several advanced economies confront the challenge of prolonged low inflation and persistent stagnation. At the same time, the pattern of global growth remains highly imbalanced.
In Europe, recent positive growth is welcome, but the recovery has started from a weak level and challenges remain. Europe needs balanced growth and needs to avoid the risk of becoming too reliant on exports for growth. While the ECB’s QE program should help counter deflationary risks, a comprehensive policy approach, using all policy levers including fiscal policy and structural reform, is needed to promote sustainable and balanced economic growth. Countries with large external surpluses and fiscal space need to adopt fiscal policies that drive demand, such as investment in infrastructure.
Greece was also a particular focus of discussions with our European counterparts. Europe has the capacity to meet this challenge, but all parties need to work in partnership on an effective way forward. Time is of the essence for Greece to work with its international partners to finalize a comprehensive set of reforms that merits financial support from Greece’s creditors. I reiterated throughout these talks that failure to reach an agreement would lead to immediate hardship in Greece and increased uncertainties for Europe and the global economy.
In Japan, slowing economic growth following the April 2014 consumption tax increase and weaker inflation data highlight the need for all three arrows of Prime Minister Abe’s economic program. A strengthening Japanese economy and escape from deflation would provide significant benefits to the global economy.
Growth in China has continued to moderate as the economy undertakes the necessary rebalancing toward greater reliance on consumption. China’s policymakers have embraced the need to transition toward a more market-oriented economy, including undertaking further steps to move to a market-determined exchange rate, and they need to move forward as quickly as possible with these reforms.
And finally, over the past few days, we reaffirmed our commitments to the international financial institutions and discussed the importance of making room for new institutions that are committed to high standards.
We continued to drive home the need for reforms that modernize the IMF, bolster its ability to respond to crises, and preserve the strong role of the United States in the institution. Congress needs to act, and continued failure to approve the IMF quota and governance reforms is causing other countries, including some of our allies, to question our commitment to the IMF and other multilateral institutions. The international community has heard clearly that the United States remains committed to maintaining our leadership position, but Congress must act to keep that commitment.
Over the past few days, I have heard consistently from our international partners that the world continues to count on the United States for its leadership role. It’s a role we’re committed to playing, and we remain steadfast in our commitment to the World Bank, IMF, and other international financial institutions. A strong and well-resourced IMF is in America’s economic and strategic interest, and we will continue to press Congress to approve these much-needed reforms as soon as possible.
It is in the economic and national security interest of the United States for our economic counterparts to succeed, and we will continue to work with our international partners to meet the challenges of the moment and forge a brighter future for all our citizens.
Thank you.
