– Before taking your questions, I would like to step back and recognize president Biden for his leadership. Over the past three and a half years, he has driven a remarkable economic recovery and strong economic growth at home and restored America’s standing in the world, enabling progress on many of the priorities I’ll be focused on in Brazil this week. I am deeply proud to serve the American people with him and Vice president Harris and I look forward to continuing to advance US leadership around the globe and deliver results for American families and businesses at home. – G20 Finance Ministers and Central Bank Governors Meetings
By Janet L. Yellen
Global economic outlook
Over the past four years, we have faced a global pandemic, the effects of Russia’s war against Ukraine, and other challenges. And even two years ago, many predicted a dismal outlook for the global economy. But they were mistaken. Today, the global economy remains resilient – driven in large part by the United States’ remarkable economic performance.
Instead of faltering, US GDP grew by a robust 3.1 percent during 2023. And new data from just this morning shows growth of 2.8 percent in the second quarter of this year, affirming the path we’re on to steady growth and declining inflation. The IMF now expects the US economy to be more than 10 percent larger by the end of 2024 than it forecasted in October 2019, before the onset of the pandemic. In fact, the United States was one of the few major economies with a cumulative contribution to global growth over the past five years that exceeded pre-pandemic expectations.
This morning’s report and the broader strength we’ve seen in the US economy in recent years didn’t happen by accident. It reflects the Biden-Harris administration’s economic plan. 15.7 million jobs have been created since president Biden took office. The unemployment rate remains historically low and the prime-age labor force participation rate is higher than it has been since 2002. Inflation is down significantly from its peak, trending towards the Federal Reserve’s target. Our administration recognizes that prices are still too high for many Americans so we’ve advanced an agenda focused on addressing long-standing cost pressures for families in areas from housing, to health care, to energy.
We are also seeing signs of dynamism across the US economy. There have been record numbers of new businesses applications, showcasing the optimism felt by many American entrepreneurs. Growth in business investment from 2022 to 2024 significantly outperformed what is typical in the years following a recession. And we’ve seen a historic boom in private sector investment in key industries such as semiconductors, clean energy, and advanced manufacturing.
Commitment to multilateralism
While the Biden-Harris administration’s economic plan continues to deliver results at home, we know that there remain risks to the global economic outlook and vulnerabilities in some countries. And because we see that a prosperous and stable global economy benefits not only the world but also the American people, we firmly believe that America must play a leading role, including to bolster resilient supply chains and to address global challenges.
If we step back to reflect on the past few years since our administration took office, I believe we have seen our commitment to strengthening ties with our longstanding allies and with partners around the world and to multilateralism pay off, and we will continue to build on our successes to drive further progress.
Following my and minister Sri Mulyani’s’s call to action, finance and health ministries came together in record time to launch the Pandemic Fund, raising nearly $2 billion for critical global investments in pandemic prevention, preparedness, and response to help mitigate the enormous human and economic costs from potential future pandemics like COVID-19. We are now calling for an additional at least $2 billion to double the Pandemic Fund’s resources. And I was pleased to announce yesterday that the United States intends to pledge up to $667 million, or one third of the $2 billion goal, to support the Pandemic Fund through 2026, with $250 million to be contributed this year.
We worked with the G20 to rally the global community to address food insecurity and have seen the international financial institutions significantly step up, increasing financing for food and agriculture by around 60 percent over the past two years to $15 billion annually. We now continue to press the G20 to do more to strengthen the international food finance architecture.
We have made progress on debt relief through the Common Framework but urge faster progress for debt restructuring and more support to countries struggling with debt service costs.
And we’ve worked including through the G20 to evolve the multilateral development banks’ missions, incentives, operational models, and financial capacity – leading to enabling over $200 billion in additional lending capacity over the next decade, innovating to offer new financial instruments, and delivering historic levels of climate finance. We now continue to advance the MDB evolution agenda and call on the G20 to deliver a robust and impactful IDA policy and financial package.
Climate action
The United States will continue to demonstrate our commitment to multilateralism while here in Brazil this week, including through a focus on climate. Our Administration has made addressing climate change a top priority and Treasury has played a key role including through my work with Minister Haddad and other counterparts, through the G20 Sustainable Finance Working Group the United States co-chairs with China, and through the multilateral climate funds and MDBs.
Supported by Brazil’s G20 leadership, we are also prioritizing work to reform the climate finance architecture to make accessing finance from the multilateral climate funds easier for countries, to better mobilize the private sector, and to support scaling approaches that work. The work of the Independent High-Level Expert Group is ongoing, and I look forward to its recommendations.
We are also focused on continued efforts to position the MDBs to better address climate mitigation, adaptation, and resilience and to pursue broader work on the environment, including on nature and biodiversity. This work is critical to supporting countries in achieving their development goals, and we have made significant progress. Developed countries mobilized a record nearly $116 billion to support developing countries in addressing climate change in 2022, 40 percent of which was through the MDBs.
I will further advance our work on climate this week, including by meeting with my counterparts from the countries of the Amazon Basin and private sector representatives.
Geopolitical issues
Under the Biden-Harris administration, the United States is also playing a key role in working with our partners to address geopolitical challenges. As part of a strong global coalition, the United States has taken unprecedented action against Russia’s brutal and unjust war on Ukraine and Treasury remains committed to using all the tools at our disposal to support Ukraine and degrade Russia’s ability to sustain this war. We continue cracking down on Russian sanctions evasion and have strengthened and expanded our ability to target foreign financial institutions and anyone else around the world supporting Russia’s war machine. As the G7 Leaders agreed in Apulia, we are also advancing work to make available approximately $50 billion in additional funding to Ukraine by the end of this year.
We continue to take action in response to ongoing conflict in the Middle East as well. Treasury remains focused on countering the Iranian regime’s financing of terrorist actors, including by taking joint sanctions actions with our G7 partners; ensuring humanitarian aid can get to Palestinians in Gaza; and stabilizing the West Bank economy. I am glad that Israel has allowed its banks to continue cooperating with Palestinian banks but remain convinced that a 1-year extension of the waiver to facilitate this cooperation is needed.
And our response to geopolitical risks extends from responding to conflict to making sure that people and economies around the world can thrive. The United States has pursued strong collaboration with emerging markets and developing countries and continues to work toward a healthy economic relationship with China in which American firms and workers can compete on a level playing field.
This means that I will keep pressing China to address its macroeconomic model, which is channeling too much savings and too many subsidies into manufacturing, contributing to industrial overcapacity. This poses a threat to the viability of firms and workers around the world, and I know my concerns are shared by many at these meetings.
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