(Washington) US Treasury Secretary Janet Yellen said on Tuesday that she had not observed any tightening of credit conditions for households and businesses due to the recent banking crisis, showing herself however to be cautious but also optimistic for the US economy.
“I have not seen evidence, at this stage, of a tightening of credit conditions, although it is a possibility,” said Joe Biden’s Minister of Economy and Finance, during a press conference organized on the sidelines of the spring meetings of the IMF and the World Bank which are taking place this week in Washington.
The turmoil in the global banking sector in recent weeks has raised fears of more difficult access to credit for households and businesses, in a context of already more expensive loans due to rate hikes intended to slow consumption, and, in fine, to fight against inflation.
“Our banking system remains strong and resilient,” Yellen said, and “the U.S. economy is doing exceptionally well.”
“So I don’t expect a slowdown in the economy, although of course that remains a risk,” she said.
Janet Yellen also expressed optimism for the global economy, as the IMF, which released its economic forecast on Tuesday, anticipates global growth of 2.8% in 2023, down slightly from its January estimate. considering however that the main economic regions should avoid recession.
“Of course, there are risks,” acknowledged the American minister, referring in particular to the war in Ukraine. But the outlook is, she says, “reasonably good.”
One of the major topics that will be discussed at the IMF and World Bank meetings will be the restructuring of the debt of poor countries. There is, on this front, “a lot of room for improvement in the international debt restructuring process”, according to Janet Yellen.
“This week, ministers from creditor and debtor countries will meet for the Global Sovereign Debt Roundtable. I anticipate a solid conversation on improvements to the common framework for poor countries and, more broadly, the debt process,” she said, as “more than half of low-income countries are in a situation of over-indebtedness or close to being there”.
Among the main creditors is China, which is accused of a lack of will to successfully restructure these debts. However, “we have seen some movement from China regarding participation in Sri Lanka’s debt restructuring, which is a hopeful sign,” the Treasury Secretary praised last week in a interview with AFP.
“It is vitally important that all creditors, including China, now meet their commitments,” she stressed again during her press conference.
Janet Yellen also said that she “still hopes” to visit China, “at the right time”, recalling that US President Joe Biden had “stressed the importance of opening and maintaining channels of communication”.