Despite concerns over the health of the U.S. banking system, the global economic outlook is stronger than it was six months ago, a top U.S. Treasury official said Monday.
“The forecasts for 2023 are better than they were six months ago,” said Jay Shambaugh, the Treasury Department’s undersecretary for international affairs.
“Recent events have, in some sense, highlighted some of the downside risks that exist, but they haven’t really fundamentally altered the overall picture,” Shambaugh said in a speech at the Brookings Institution.
In his speech, timed for the start of this week’s World Bank and International Monetary Fund meetings, Shambaugh said that financial stability will be a topic of discussion. He said the financial system is better regulated, better capitalized and more liquid than it was during the global financial crisis of 2008.
“These events remind us of the urgent need to complete any unfinished business on regulatory issues and fix any cracks in the regulatory perimeter that are necessary,” he said.
The main focus of U.S. officials was to move forward on debt relief for emerging-market and low-income countries and to boost global support for Ukraine.
This will require the participation of all creditors, he said.
Shambaugh said the U.S. wanted to resolve debt relief for Zambia, Ghana, Ethiopia and Sri Lanka.
Zambian President Hakainde Hichilema, in an interview with the Wall Street Journal, blamed tensions between the U.S. and China for delaying debt relief to his country and others. China has boosted its international assistance markedly in recent years.
Treasury officials said they would likely hold informal talks with Chinese officials this week.
In his remarks, Shambaugh stressed that the U.S. is not seeking to decouple its economy from China or to limit the growth of China’s economy.
“There’s plenty of scope for an economic relationship that benefits both of us,” he said, noting that bilateral trade between the two countries hit a record level last year.
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