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3/19/2020

IMFC Statement of Secretary Mnuchin | U.S. Department of the Treasury

IMFC Statement of Secretary Mnuchin
April 10, 2019

Washington – U.S. Treasury Secretary Steven T. Mnuchin issued the following statement at the

Spring Meetings of the International Monetary Fund and World Bank:
I welcome the opportunity to discuss the state of the United States and global economy at the
IMF and World Bank Spring Meetings. While growth in the United States remains robust, growth
abroad has so ened materially, with risks of a further slowdown if countries do not take action
to reduce uncertainty and bolster confidence. Countries should also undertake stronger e orts
to address underlying structural impediments and help raise medium-term growth. A wellfunctioning IMF can play a key role in supporting these e orts, promoting policies aimed at
more balanced and durable global growth, and strengthening economic capacity and
governance.
Strong underlying fundamentals helped power the U.S. economy to its best growth
performance in over a decade in 2018, with real GDP expanding by 3 percent over the four
quarters of last year. One year a er the passage of tax reform, business investment has surged
and productivity growth has begun to pick up. American families are enjoying key benefits
a orded by lower tax rates. Labor markets have continued to strengthen, with the participation
rates for all workers and prime-age employees rising, suggesting that tax reform has drawn
workers back into the labor force in numbers that are more than o setting downward pressure
from demographics. The number of job openings exceeds the number of unemployed persons,
and wage growth has accelerated to its fastest pace in 10 years.
Beyond the United States, global growth has slowed since we last met, and determined action is
needed to return the global economy to strong, broad-based expansion. Disappointing
economic data across most regions of the global economy raise questions about the extent and
depth of current weaknesses. While this may prove to be a temporary so patch, a more
widespread downturn creates risks of a prolonged stagnation. Countries with weak economic
activity or muted growth need to proactively deploy macroeconomic policies and pursue
productivity-enhancing reforms in order to bolster both near-term and medium-term growth.

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IMFC Statement of Secretary Mnuchin | U.S. Department of the Treasury

To that end, the United States continues in its e orts to address restrictive trade practices
around the world that are impeding stronger and more balanced U.S. and global growth. To
achieve a balanced and fair trading system, we must address the significant imbalances in
global trade that stem in part from unfair trade policies and high trade barriers.
The United States-Mexico-Canada Agreement is an example of progress and cooperation across
borders that will move us in the right direction as we look to rebalance North American trade.
Working with Mexican and Canadian counterparts, we negotiated the strongest financial
services provisions of any U.S. trade agreement and secured new commitments on currency
issues, boosting transparency and accountability. This trade agreement is key to ensuring
positive outcomes for businesses and workers across North America.
Continuing large global trade and current account imbalances also pose risks to the strength
and stability of future global growth. While imbalances narrowed following the global financial
crisis, they have been broadly unchanged at close to 2 percent of global GDP since 2013.
Persistent imbalances are intensifying these risks across major economies. In order to support
stronger and more sustainable global growth – particularly at a juncture where global activity is
flagging – countries reliant upon large and persistent external surpluses to drive domestic
growth should reorient their macroeconomic policies to boost domestic demand.
The current state of a airs reinforces the importance of IMF reforms to maintain its relevance
and e ectiveness. This will not be the first time the international community has looked closely
at the IMF. Over the years, the IMF has undergone a series of transformations, responding to
fundamental changes in the world economy and international monetary system, and it should
continue to evolve to respond to the challenges ahead.
Of most immediate concern is ensuring the IMF has su icient financial resources to respond to
potential crises. In our view, the IMF currently has ample resources to achieve its mission, and
countries also have considerable complementary resources should a crisis emerge. Thus, we do
not see a need for a quota increase at this time and support closure of the 15th General Quota
Review as soon as possible. At the same time, we recognize that the IMF’s borrowed resources,
including the New Arrangements to Borrow (NAB) and bilateral borrowing arrangements, are set
to expire in the next few years. We look forward to working closely with the IMF and other
members to identify options for extending a portion of these borrowed resources so that the IMF
can maintain adequate resources to deliver on its mission. We also look forward to agreeing on
a reasonable timeframe for the 16th General Quota Review.

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IMFC Statement of Secretary Mnuchin | U.S. Department of the Treasury

Just as members need to assure that the IMF maintains adequate resources, the IMF also needs
to assure its members that it is delivering e ectively on its core mission. A key aspect of that
mission remains the promotion of debt transparency and sustainability, and here the IMF has a
leading role to play. Debt owed to emerging creditors is at a critical juncture, with debt levels
rising among both low income/emerging and advanced economies. Increasingly, opaque or
unsustainable lending practices weaken investor confidence, erode governance and
accountability, and create a drag on economic growth. We welcome continued progress on the
IMF/World Bank multi-pronged work agenda on debt. While the broad contours of this agenda
are now in place, the IMF’s e ectiveness will rest in the details. The IMF should continue to
promote greater transparency of borrowing from all creditors in its programs, laying a
benchmark for future programs to build upon. In its bilateral surveillance, the IMF must also
proactively identify data gaps and promote disclosure of all current and potential public
liabilities by member countries. Upcoming IMF policy reviews to update the debt sustainability
analysis of market access countries, reexamine the data requirements for surveillance, and
strengthen Special Data Dissemination Standards, will play a key role in reinforcing this
objective of debt transparency and sustainability.
Other policy reviews will also provide invaluable opportunities for the IMF to improve its
e ectiveness. The ongoing review of program conditionality should result in reforms aimed at
strengthening program design, with focused program conditions that prioritize broad-based
growth and median real income. For example, in the case of Argentina, a focused set of
conditions aimed at addressing weaknesses in monetary and fiscal policies helped to stabilize
financial markets, putting the economy on track to return to growth. The review of
conditionality should also address parsimony and criticality of conditions, and help solidify the
need for close coordination with other international financial institutions. The IMF should
leverage the upcoming review of its surveillance framework to better deliver on its core
mandate, prioritizing such issues as resolving data gaps and transparency, enhancing
surveillance of debt sustainability and external sector assessments, and addressing surveillance
challenges in low income countries.
Central to any reforms to improve the IMF, and key to the IMF’s future as an institution, is the
IMF’s continued ability to attract exceptional talent. We are pleased to see the Fund tackle the
challenge of modernizing salaries and benefits head-on with a comprehensive compensation
and benefits review, also known as the CCBR. As we look forward to the results of the CCBR
later this year, we expect to see reforms that promote fiscal discipline, facilitate more career
progression, streamline under-utilized benefits, and support the needs of today’s working
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IMFC Statement of Secretary Mnuchin | U.S. Department of the Treasury

families. Just as we need to modernize and increase e iciencies of IMF sta , the IMF Executive
Board should also leverage this review to examine ways in which it can streamline its own
activities and Board costs, and demonstrate to its sta and the international community that
IMF members are leading by example in an era of competing priorities and shrinking budgets.
We look forward to working with other members and the IMF to execute on these reforms in the
coming year. Not only are these measures key to maintaining the Fund’s e ectiveness and
relevance, they will also lay the foundation for long-term financial sustainability, position the
Fund as a leader among financial institutions, and bolster its credentials as a public institution
funded by IMF shareholders.
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