According to Yellen, the global economy remains resilient and praises the USA as an engine of growth

By Andrea Shalal

SAO PAOLO (Reuters) – Strong U.S. economic growth has been a “key factor” in higher-than-expected global growth, U.S. Treasury Secretary Janet Yellen said at a news conference on Tuesday ahead of this week's meeting of G20 finance officials in Sao Paolo, Brazil .

In excerpts of her remarks released by the Treasury Department, Yellen said the International Monetary Fund and other forecasters had forecast a broad-based slowdown in the global economy in 2023, but that has not materialized.

Instead, growth came in at 3.1%, beating expectations, and inflation fell, with prices expected to fall further in about 80% of economies this year, she said.

“Going forward, we remain mindful of the risks facing the global outlook and continue to carefully monitor economic challenges in certain countries, but the global economy remains resilient,” she said.

Yellen said U.S. economic strength has supported global growth, driven by the Biden administration's policies to support businesses hit hard by the COVID-19 pandemic, as well as investments in domestic manufacturing, clean energy and infrastructure.

U.S. inflation has also fallen significantly from its peak and the U.S. labor market is historically strong, she said, with the prime-age workforce above pre-pandemic levels and the unemployment rate near historic lows.

“If a US recession had occurred in 2023, as many predicted, global growth would have been derailed. While there are risks to our outlook, America's growth has consistently exceeded forecasts,” Yellen said.

The IMF last month cut its global growth outlook to 3.1% in 2024, up two-tenths of a percentage point from its October forecast, and left its 2025 forecast unchanged at 3.2%.

IMF chief economist Pierre-Olivier Gourinchas said the global lender's updated global economic outlook showed a “soft landing” was in sight, but overall growth and global trade remained below historical averages.

The story goes on

Yellen said growth in many economies, including Brazil, the current president of the Group of 20 economies, also contributed to global growth, although other economies still face challenges. She did not specify which countries had problems.

IMF spokeswoman Julie Kozack told reporters last week that the global lender would take into account new information about the Japanese and British economies, both of which have slipped into recession, when preparing a new global forecast to be released in April.

(Reporting by Andrea Shalal; Editing by Chris Reese)