The global economy is in a better place today than many had predicted just a few months ago, although there were still significant headwinds, U.S Treasury Secretary Janet Yellen said at a press conference in Bengaluru on Thursday.
“It’s fair to say that the global economy is in a better place today,” she said, adding that in the fall, many had been worried about a sharp economic slowdown across the world.
“The challenges we face are real, and the future is always uncertain. But the outlook has improved since we gathered in the fall,” she elaborated. In its most recent estimates, the IMF had raised its forecast for global growth in 2023 to 3.2%, a notable upgrade from October, she stated.
Ms. Yellen said the U.S. economy remained resilient with year-on-year headline inflation having moderated over the past few months as supply chain pressures had eased and global imbalances had subsided. “At the same time, our labour market remains strong. In January, U.S. unemployment hit a low not seen in over a half-century,” she added.
Ms. Yellen said forums like the G20 were important venues for macro-economic cooperation.
“During our meetings last fall, there was a shared view… that we must take decisive action on the challenges that we face in our own countries, that includes combating high inflation,” she said.
It was also important to be attentive to the spillovers of monetary tightening from major economies to the rest of the world, she noted. “While there’s much more work to do, we are beginning to see lower headline inflation around the globe. In emerging markets, financial conditions remain relatively tight, but have begun to show signs of easing.”
However, Ms. Yellen acknowledged that a number of vulnerable countries continued to face acute distress. “We are not out of the woods yet,” she added.