Transcript

International Monetary Fund
Washington, D.C., Thursday, January 15, 2009

MR. HAWLEY: Good morning, everybody. Welcome to the first of our regular press briefings of 2009. I'm David Hawley, Senior Advisor in the External Relations Department of the IMF. The briefing, as usual, is embargoed until 10:30 Washington time, that's 1530 GMT. And welcome to journalists joining us online.

As usual, I would like to start by making a few announcements about events and management travel. First, we'll be releasing updates of the World Economic Outlook and the Global Financial Stability Report on January 29 here in Washington, at a 9:30 a.m. briefing, that's 1430 GMT.

On management travel, I would mention that on February 5, the Managing Director, Dominique Strauss-Kahn, will be visiting Berlin at the invitation of German Chancellor Merkel to take part in a discussion on global economic and financial developments with other heads of international institutions. I believe there will be a press availability following this discussion, but I'd refer you to the German government for details on that. On February 6 and 7, the Managing Director will visit Malaysia to take part in the 44^th Southeast Asian Central Bank Governor's Conference in Malaysia. The first Deputy Managing Director, John Lipsky, will attend the World Economic Forum in Davos on January 29 to 31, where he will be chiefly participating in sessions on topics related to the financial and economic crisis.

From February 9 to 14, Mr. Lipsky and Antoinette Sayeh, the Director of the African Department, will visit Liberia and Cote d'Ivoire for meetings with the authorities and discussions on economic developments in the region.

Earlier in February, on the 2^nd and 3rd, Deputy Managing Director Takatoshi Kato will attend the African Union Summit in Adis Ababa, where he will give a speech on regional economic developments, in particular on how the global financial crisis is effecting Africa.

These and other Africa related travel and events are part of the preparation for the conference in Dar Es Salaam, Tanzania on March 10 and 11, hosted by President Kikwete of Tanzania, and the Managing Director. This conference will bring high level policy-makers together with outsiders to discuss - to talk about the theme of changes, successful partnerships for Africa's growth challenge. And it will look at recent economic successes in Africa and how the region should respond to the financial crisis.

There is a web site which I should mention for this conference, it is www.changes-challenges.org. With those opening remarks, let me turn to questions.

QUESTION: Do you have any update on how the discussions are going on in Turkey, please?

MR. HAWLEY: Yes; as you know, a mission is currently in the field, good progress is being made towards an agreement.

QUESTION: Is any sort of idea on how long this is going to take, you know, any other further guidance on, you know, is this going to be a precautionary one or a stand-by, nothing?

MR. HAWLEY: I've got no further guidance on that at this stage.

MR.HAWLEY: Please.

QUESTION: Hi, Happy New Year.

MR. HAWLEY: Happy New Year.

QUESTION: We've been reading Mr. Belka's interview yesterday (in IMF Survey Online). Today the ECB cut interest rates to minimum - start minimum, and the OECD fix about - very strong recession I heard. I would like to know if the IMF believe that the worst is still to come for the European continent.

MR. HAWLEY: Well, as you know, we're publishing an update of the World Economic Outlook on January 29, so some detail will have to wait until that date. But amid an intensified global crisis, the - has entered a recession, and that is expected to deepen with a slow recovery not likely to start until late 2009.

The deteriorating economic environment has combined with declines in energy and commodity prices to dissipate inflationary pressures, giving way to disinflationary forces, and staff, as a result, expects inflation to fall below the ECB's target in 2009.

QUESTION: Excuse me; could you repeat this last part about these inflation forecasts?

MR. HAWLEY: Yes, indeed. Staff expects inflation to fall below the ECB's target during 2009, because declines in energy and commodity prices are dissipating inflationary pressures.

QUESTION: Given that inflationary forces are dissipating, will there be further -- beyond today's interest rate cuts for further monetary - in the year's end?

MR. HAWLEY: I'd prefer to offer a comment only on today's rate cut, which is that, in line with actions by other central banks, the ECB has appropriately cut its main policy rate by 50 basis points. The cut reflects further weakening in the global and European economies and is necessary to stem disinflationary pressures from the negative feedback loop between the financial sector and the real economy.

QUESTION: Dave, do you know if the - if any officials from the Obama transition team has been in touch with the Fund and what those discussions have been?

MR. HAWLEY: No, I don't have information about contacts between the transition team and the Fund. There is a question on the Media Briefing Center, who cites reports that the Fund may need another $150 billion and is actively seeking funds now.

The source of the funding can be borrowed resources, as we have seen in the case of Japan, which has placed at the disposal of the IMF - a credit line, but further details could follow.

QUESTION: Just turn to the meeting in [Tanzania] in March. Could you maybe just expand a little bit on - I mean just let us know - give us some sort of idea what the Fund wants to get out of this meeting? And you said it's a high level, you know, who's going, and you know, anything further?

MR. HAWLEY: Yes, it's a very important meeting, that is the initiative of President Kikwete and the Managing Director. It brings together policy-makers from the region, typically at the level of finance ministers and central bank governors, and prominent outsiders. So, for example, Kofi Annan - people who are in a position to discuss the achievements of Africa in the recent period, but also to address the challenges facing the region in light of the crisis.

It's an opportunity, too, to bring forth an African view to discussions of reform of the global architecture and the reform of international institutions that are taking place in other fora.

QUESTION: Sorry I'm jumping around the world, but we know about the confusion yesterday with Ireland. I was just wondering if there is a mission planned for Ireland. I mean I guess the thing that really struck everybody was - pretty possible that Ireland, you know, could go to the Fund just because the economy is in such terrible shape. But I was interested if there's a mission at all planned, like an Article IV, a technical mission?

MR. HAWLEY: Okay. Well, the next annual Article IV mission to review Ireland's economy is currently planned to take place in April.

QUESTION: The same question for Italy. Usually, if I'm not mistaken, Article IV is in February; is there a mission already planned?

MR. HAWLEY: Well, the Article IV for Italy is in the (IMF Executive) Board in February, so the mission has already taken place.

QUESTION: Excuse me; so you expect the release of the Article IV for Italy -

MR. HAWLEY: The Board is tentatively scheduled for early February, so you would expect the Article IV details to follow in the - with the usual lag. Do we have any other questions? Yes, at the back.

QUESTION: (off mic) I'm sorry, maybe this question was asked already. I'm interested in IMF plans regarding Ukraine in the short future. Do you have any plans to save Ukraine economy or something like that?

MR. HAWLEY: Well, our involvement in Ukraine is well known. We've been working with the country. And no other comments, I've got nothing fresh on Ukraine today.

QUESTION: If I can turn to Gaza; I was wondering, I saw an assessment, and I'm - which was very unclear where the - came from, that there was an assessment of - looking at what might be needed to rebuild or economic revival for the Palestinian area. And I saw $1.4 billion; was that - was the IMF involved in that assessment at all? And No. 2, is the IMF involved in any discussions on a possible donor conference?

MR. HAWLEY: I'm afraid I don't have anything specific on Gaza, but let me just check. I can offer some information, but it's not as specific as you're after. The violence in Gaza has worsened, the dire economic and humanitarian situation. Once the violence subsides, a major reconstruction effort combined with the lifting of the brocade will be needed to ensure a sustainable recovery. I don't, however, have a number; I am not in a position to confirm the number you asked for.

QUESTION: And you don't know anything about a donor conference, discussions, because -

MR. HAWLEY: The timing of the next donor's meeting is uncertain given the violence in Gaza.

QUESTION: I think the gentleman from - be referring to impossible mission to Ukraine. I did see reports of the region on something like that.

MR. HAWLEY: Okay. Let me check, if I may. I'm afraid I don't see information on that. We'll come back to you on that one. I'm sorry, yes, a mission will visit Kiev in the second half of January to assess the implementation of the program and conduct discussions on the first review. I'm sorry I missed that. Okay. Do we have any other questions? Okay. Well, thank you very much. It's embargoed until 10:30.