“Emerging economies like China, Brazil and India are growing very rapidly. That growth is helping to support rapid growth in US exports which in turn is raising income and employment across the United States in manufacturing and high tech and agriculture,” he told the Senate Foreign Relations Committee on Thursday.
The world economy is growing at different speeds with emerging markets growing robustly with advanced economies relatively sluggish, he said citing the IMF forecasts that emerging markets will grow by 6.5 percent this year, while growth in Europe and Japan will be 1.5 percent.
“The US recovery stands in between, with growth gathering momentum and inflation risks modest, but with unemployment still unacceptably high,” Geithner said.
The multi-speed recovery faces several major challenges and risks, he said citing the historic changes in north Africa, including Egypt and Libya, unresolved debt crisis in Europe and rising global commodity prices - including for food and oil - among the factors, he said.
The largest emerging market economies, such as China and India, are also facing the usual pressures associated with strong growth, Geithner said noting inflation is accelerating in these economies.
The US is working in the G20 to help build consensus on long-term reforms that will provide the foundation for a more balanced, more stable global economy, he said.
“Leaders are undertaking the difficult task of designing a financing mechanism that can help support the very challenging, multi-year programmes of fiscal and financial reform that are underway in several of the member states,” Geithner said.