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3/19/2020

IMFC Statement of Secretary Mnuchin October 2018 | U.S. Department of the Treasury

IMFC Statement of Secretary Mnuchin October 2018
October 11, 2018

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

International Monetary Fund Conference:
“I am pleased to have the opportunity to discuss global economic developments at the IMF and
World Bank Annual meetings in Bali. Global growth is stronger than it has been since the
financial crisis, and our challenge now is to both build on that momentum and help ensure
growth brings prosperity to all of our citizens. Countries should take steps to address
underlying vulnerabilities amid global financial conditions that have increasingly divergent
e ects on their economies.
“Strong U.S. growth has been a key contributor to the current global economic expansion. Real
GDP growth has averaged nearly 3 percent over the past three quarters. The U.S. economy is set
to exhibit strong growth in the year as a whole and maintain its momentum going forward,
based on sound underlying fundamentals. Business confidence is at an all-time high, and
growth in business investment over the last six months is the fastest since 2012. Consumer
confidence reached its highest level since 2000. Personal consumption expenditure and
business investment are growing, workers in a tightening labor market are seeing wage gains,
and stock markets have reached new highs. Core inflation remains relatively stable, near 2
percent. Importantly, real median household income has been growing, rising by more than
$1,000 last year to reach a post-recession high.
“Increasingly, the benefits of the Administration’s tax reforms and deregulation are reshaping
the economy. The American economy this year has grown at a rate above most predictions, and
the unemployment rate has fallen to match the lowest level in nearly 50 years. The new tax
code, designed to boost economic growth, has accelerated business fixed investment. Looking
ahead, regulatory relief and other pro-growth initiatives will further improve the business
climate. The Administration’s economic policies are designed to spur greater private sector
investment in facilities and workers, boost productivity and wage growth, and draw more
workers into the labor force. These structural reforms will li the U.S. economy to a higher
sustained growth path.
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IMFC Statement of Secretary Mnuchin October 2018 | U.S. Department of the Treasury

“Bolstered by the United States’ strong economic performance, global growth has remained
solid this year. However, some emerging markets face challenging conditions amid rising
interest rates and debt levels. To that end, we urge all members to act decisively to strengthen
economic policy frameworks and pursue sound monetary policies to address macroeconomic
and financial vulnerabilities.
“In order to put in place a secure foundation for strong and broad-based growth across the
global economy, countries need to undertake fiscal and structural reforms that will bring
inflation to target, rebuild bu ers, enhance financial sector resilience, raise growth potential,
and reduce persistent trade and current account surpluses. We highlight again our strong
concern with Europe’s consideration of unilateral digital taxes. Within the OECD, we have
worked hard to advance tax discussions on this issue, and we urge EU Finance Ministers to finish
that process with us.
“For our part, the United States is undertaking e orts to address restrictive trade practices
around the world that are impeding stronger and more balanced U.S. and global growth. We
are working with a number of key allies to achieve more free, fair, and reciprocal trade and to
ensure a level playing field for U.S. firms. We encourage other countries to examine their
policies and take steps to help rebalance global trading relationships and continue the
momentum toward stronger and sustainable global growth. The Administration is committed
to achieving a fair and reciprocal trading and investment relationship with all of our partners,
including China. We welcome the IMF’s work on tari and non-tari barriers, and we encourage
the IMF to focus on less open trade regimes in order to play a constructive role in promoting
global solutions.
“Global trade and current account imbalances, which remain elevated and are increasingly
concentrated in advanced economies, can impede future growth and threaten financial
stability. Without policy action to reduce excessive imbalances, they will pose an ongoing threat
to global economic and financial stability. Last year, the IMFC concluded that strong
fundamentals, sound policies, and a resilient international monetary system are essential to the
stability of exchange rates, contributing to strong and sustainable growth and investment. It is
important that major economies pursue this vision more vigorously.
“The IMF plays a critical role in advising, informing, and helping member countries achieve
global economic stability and strong and balanced economic growth. We encourage the IMF to
clearly indicate where its members continue to employ macroeconomic, foreign exchange, and
trade policies that contribute to unfair competitive advantages. In that vein, we welcome the
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IMFC Statement of Secretary Mnuchin October 2018 | U.S. Department of the Treasury

elevation of the IMF’s External Sector Report (ESR) to a flagship report and the revisions to the
External Balance Assessment methodology, which will yield more robust and transparent
results for key variables. We urge the IMF to be a more forceful advocate in making clear policy
recommendations to narrow external imbalances, including by providing precise policy advice
for countries with large surpluses, in pursuit of more balanced global growth. We also call on
the IMF to firmly press for greater transparency amongst all members on foreign exchange
intervention and reserves.
“Importantly, the IMF has also highlighted the potentially destabilizing e ects of rising public
debt in a number of developing economies. Rising debt levels and debt service burdens,
especially from emergent creditors through non-concessional, poorly coordinated, and nontransparent arrangements, are deepening the fiscal and financial strains on low-income and
developing countries, which will lower growth and prosperity in these countries. To that end,
the international financial institutions can play critical roles in enhancing debt transparency in,
and supporting sustainable borrowing and lending practices by, its member countries.
“The IMF is both a key repository of debt data and an advisor to borrowing countries on debt
policy and management, chiefly through its debt sustainability frameworks for low-income and
market-access countries and its technical assistance. We strongly support the IMF and World
Bank’s multi-pronged work agenda on enhancing debt transparency and sustainability and urge
both institutions to move forward with implementation of the agenda. On the borrower side,
the IMF and World Bank should make e orts to obtain a comprehensive picture of members’
debt positions in both its bilateral surveillance and as part of its lending programs, with the goal
of improving debt sustainability. In particular, the institutions should improve the public
disclosure of a broad range of sovereign debt statistics, including publicly guaranteed and
contingent liabilities, by member countries so as to reduce debt surprises. The IMF also has a
role to play in engaging creditors, in particular non-traditional creditors such as China, whose
lending frequently falls short of international standards for sustainable development finance
and integrity in international business. IMF lending should reinforce the need for transparency,
debt sustainability, and responsible burden-sharing in debt resolution, which in turn will help
reduce opportunities for corruption. Finally, the IMF plays a key role in promoting orderly
sovereign debt workouts, and we urge the IMF to maintain a comprehensive and up-to-date
policy on lending to a member that is in arrears to the private sector.
“The IMF must also advance lending programs that have, as a goal, higher median incomes and
that help incentivize the market-based allocation of capital. To achieve these aims, we urge the
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IMFC Statement of Secretary Mnuchin October 2018 | U.S. Department of the Treasury

IMF to improve the design of lending programs so that they have a clear emphasis on promoting
growth through focused and prioritized policies. A very good recent example of this is the IMF
Stand By Arrangement with Argentina, which focuses on policies that can help bolster
macroeconomic stability and market confidence. We welcome the strong monetary and fiscal
policy adjustments proposed by the Argentine government in its recent sta -level agreement
with the IMF. We strongly support President Macri’s enhanced policy e orts and the new
monetary policy initiative aimed at lowering interest rates and inflation and placing the
Argentine economy and currency on a path to stability.
“The IMF is an important part of the global financial safety net. Countries now have many more
sources of liquidity and financial support, including bilateral swap lines and regional financing
arrangements. At the same time, global growth continues to expand, providing space for
members to rebuild bu ers and strengthen their resilience to future global shocks.”
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