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US poised for self-sustaining growth: Brainard

February 12, 2013 10:03 IST

Confident of improving the job prospects for rising middle-class in the country, the US has said it will continue to push for stronger job creation as it is poised for self-sustaining, broad-based growth.

"The United States is poised for self-sustaining, broad-based growth. We will continue to push for stronger job creation and rising middle-class incomes," Lael Brainard, US Undersecretary of the Treasury for International Affairs said.

"President (Barack) Obama is committed to a balanced approach for deficit reduction that delivers on debt sustainability while giving the private sector the support it needs to invest and create jobs," she said.

During election campaigns and in debates last year Obama have pitched for better job opportunities for youngsters and promised for better future in the countries.

Adding she mentioned that US has managed a steady pace of fiscal withdrawal over the past three years, reducing the deficit by an average of more than one percentage point of GDP per year while at the same time protecting the recovery.

"According to new projections released by the CBO (Congressional Budget Office), the deficit as a share of GDP is projected to decline to roughly half the share in 2009,"

the Treasury Official said, adding that in the months ahead, the US will seek balanced deficit reduction to put the debt-to-GDP ratio on a sustainable path.

Noting that the US President remains committed to finding reductions in a balanced way, she said it is important to avoid sequestration, which is a blunt and indiscriminate instrument that poses a serious threat to national security, domestic priorities and the economy.

Private sector activity has now expanded for 14 consecutive quarters and the US is growing faster than most other advanced economies despite the deep damage from the financial crisis and headwinds beyond its shores, Brainard observed.

The private sector she said, has been adding jobs for 35 straight months now for over six million jobs in total. US banks are better capitalised and more conservatively funded than before the crisis and once again providing credit to support business and consumers.

"There's gathering strength across a broad spectrum of the economy: housing, energy, autos, high tech, manufacturing and agriculture. US energy costs have fallen, and companies are once again looking to the US as the premiere destination for investment," the Treasury official said.

"In Europe, we've seen the Central Bank and leaders join together in support of a strategy to ensure countries undertaking reforms retain access to market financing and assure banks have access to liquidity and hold credible capital," she said.

"With the OMT and the ESM, European fiscal and monetary authorities have convinced markets of their commitment. Work is under way to move to common supervision of the largest banks," she said adding that over the medium term, the institutions of the euro area must be further refined to provide foundations for growth and resilience.

In Japan, we're seeing a commitment to end deflation and reinvigorate growth. It will be important that structural reforms accompany macroeconomic policies to achieve these goals, she said.

Complete coverage: Union Budget 2013-14

Lalit K Jha in Washington
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