Report To Congress On International Economic And Exchange Rate Policies

Author : U S Department of the Treasury
Publisher : CreateSpace
ISBN 13 : 9781512086805
Total Pages : 36 pages
Book Rating : 4.0/5 (868 download)

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Download or read book Report to Congress on International Economic and Exchange Rate Policies written by U S Department of the Treasury and published by CreateSpace. This book was released on 2015-05-07 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Omnibus Trade and Competitiveness Act of 1988 (the "Act") requires the Secretary of the Treasury to provide semiannual reports on the international economic and exchange rate policies of the major trading partners of the United States. Under Section 3004 of the Act, the Report must consider "whether countries manipulate the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustment or gaining unfair competitive advantage in international trade." This report covers developments in the first half of 2013, and where pertinent and available, data through end-September 2013. This Report reviews the macroeconomic and exchange rate policies of economies accounting for 72 percent of U.S. foreign trade and of global economic developments more broadly in the first half of 2013. The Report concludes there has been some progress on the goal of achieving strong, sustainable and balanced growth and the necessary exchange rate adjustments, but the record is mixed, and further progress is needed. The Administration's policies to promote growth and jobs are bearing fruit. U.S. real GDP grew by an annual rate of 1.8 percent during the first half of 2013, accelerating from the 1.5 percent pace in the second half of last year. A consensus of private forecasters expects growth to strengthen in late 2013 and to accelerate to 2.8 percent in 2014. Growth has been supported by consumer spending and residential investment in an environment of improved household balance sheets, accommodative credit conditions, and faster job creation. Nonfarm payrolls have been increasing by an average of 185,000 per month over the last year and 7.6 million private sector jobs have been created since February 2010. The unemployment rate has dropped to 7.2 percent as of September 2013, the lowest level since November 2008. The federal deficit has fallen rapidly this year, acting as a headwind to growth. In the fiscal year that just ended, the deficit is expected to decline from 7 percent of GDP to just over 4 percent, its lowest level since FY2008. Relative to GDP, this is nearly 6 percentage points of GDP smaller than the FY2009 deficit of 10.1 percent of GDP. The Administration remains committed to further reducing the deficit, consistent with economic conditions, and to placing public finances on a long-term sustainable path. This year has seen stronger growth in advanced economies, coupled with a reassessment of the relative growth prospects of emerging economies. Overall, the IMF projects the global economy will expand by 2.9 percent in 2013, down from 3.2 percent in 2012. Looking forward, the IMF projects global growth will strengthen to 3.6 percent in 2014. There are signs that the lengthy recession in the euro area has come to an end, although unemployment remains very high in many countries. Growth has slowed in many emerging market economies due to the waning of post-crisis stimulus, slowing global export demand, including softer commodity demand from China, and tighter credit conditions. Many emerging market currencies have depreciated in 2013 due to global and local factors. After an initial market selloff in May, markets began to differentiate among emerging market countries according to the strength of their policy frameworks and their current account positions. Many emerging markets have strengthened their economic institutions and policy frameworks over the past decade and thus increased their resilience to shifts in capital flows. Generally, in those countries with stronger frameworks, currencies and financial markets have retraced earlier declines.