"Over the course of this past year, I think we've seen very constructive movement to get the balance right between fiscal consolidation and growth," he said in a joint news conference with his German counterpart Wolfgang Schaeuble.

"We can continue to discuss where that balance should be but it has moved in the right direction from our perspective over the year," he said, pointing to German plans to introduce a minimum wage and boost investments in infrastructure.

Earlier Lew said: "We have made very clear that we think that more domestic demand and investment would be a good thing. We continue to believe that policies that promote domestic demand would be good for the German economy."

(Reporting by Jason Lange; Writing by Annika Breidthardt; Editing by Noah Barkin)