Transcript of a Press Briefing with David Hawley, Senior Advisor in the External Relations Department, IMF

March 15, 2007

Senior Advisor in the External Relations Department
International Monetary Fund
Washington, D.C.
Thursday, March 15, 2007

View a Webcast of the press briefing

MR. HAWLEY: Hello, everybody. I am David Hawley, Senior Advisor in the IMF's External Relations Department. Welcome to one of our regular press briefings.

Those journalists joining us on the online Media Briefing Center, welcome to you, and I encourage you to put in questions so that we can get around to them during the course of this morning's briefing.

Before I take questions, let me make a couple of announcements. The Managing Director, Rodrigo de Rato, will be in Capetown in South Africa on March the 16th to take part in the annual conference of the Parliamentary Network on the World Bank, or PnoWB, which is taking place on March the 15th to 17th. The PNoWB brings together 200 parliamentarians from about 100 countries, and they will be discussing development issues and the roles of international financial institutions. The opening event is a roundtable discussion on Africa in which the Managing Director, Mr. de Rato, will be participating along with Paul Wolfowitz, the President of the World Bank; Donald Kaberuka, President of the African Development Bank; and Trevor Manuel, the Minister of Finance of South Africa and the current G20 Chair. There will be press availability during that day, Friday, and if you need more details, I encourage you to contact the Media Relations Department.

As I am sure many of you know, we, together with our colleagues at the World Bank, have opened up press accreditation online for the Spring Meetings of the World Bank and IMF which are taking place on the 14th and 15th of April here in Washington. The deadline for registering for press credentials is Friday, April the 6th. A tentative schedule of events is now on our web site on One event which is not on the schedule but which you may wish to note is the press briefing by the IMF on the analytical chapters of the World Economic Outlook, which is scheduled for April the 5th at 10:00 at our time at headquarters.

The next regular press briefing will be held here on March the 29th.

So with that, I am over to you. Thanks.

QUESTIONER: I was wondering if the IMF has got any comment on what is going on in the U.S. housing market and any concerns regarding the subprime mortgage issue. The Fund has said that the risk of a slowdown, housing slowdown, had eased. I was wondering if this was pushing it back up again to one of the main risks to the global economy.

MR. HAWLEY: I don't have much to add to what we have said on the financial markets. As we have said before and continue to regard as the case, the global economy is generally solid, and recent turbulence appears to reflect a market correction. We will be providing a more detailed assessment of these developments as we release, in due course, the Global Financial Stability Report and the World Economic Outlook.

QUESTIONER: Can we expect one of the WEO chapters to address the whole housing market issue? How is the Fund looking at this?

MR. HAWLEY: I will leave WEO questions until we release the WEO if I may.

QUESTIONER: I am going to ask you about your estimate for Italy in view of the last data that came out from OECD who is predicting 2.2 percent GDP for 2007 for our country and our Secretary of Economic Development, yesterday, predicted 2.5 percent. So, even without talking a specific number, in your World Outlook, do you think you are going to upgrade your estimate for Italy and do you think that could be close to 2 percent, if you can comment on this?

MR. HAWLEY: Well, as I have mentioned already, the WEO exercise is still underway, and our growth estimates for Italy along with a number of other countries will be released on April the 11th.

But in respect to Italy, as already anticipated at the time of the issuance of the Article IV consultation documents about a month ago, the mere carryover of the strong fourth quarter number implies 2007's growth will be appreciably above the roughly 1.5 percent we had in the Article IV, and staff will accordingly be revising upwards. The final figure, as always in the case of the WEO, will depend on an iterative process and with forecasts of other main economies.

QUESTIONER: Just to repeat, you said it is going to be appreciably above the 1.5 percent of the Article IV?
MR. HAWLEY: No. We are saying that the mere carryover of the strong fourth quarter number implies 2007's growth appreciably above the roughly 1.5 percent we had at the time of the Article IV.

QUESTIONER: If I can ask a follow-up, you talked about the importance of pension reform especially in Italy, and the government has started opening the table of negotiations right now about these. Does the IMF still feel that this is one of the most urgent reforms for Italy?

MR. HAWLEY: I have nothing to add to what we said in the PIN. I will remind you that we said that the safeguarding of the financial impact of the already legislated pension reform will be essential.

QUESTIONER: There are reports out of Turkey that the country is exceeding IMF budgetary limits by about $1.4 billion. How much of a concern is this for the Fund and what is your current relationship or your current discussions with Turkey on this matter?

MR. HAWLEY: I haven't a specific response to reports of Turkey exceeding an agreed budget target. I would, to infer what I think is the thrust of your question, though, say that any initiative that would endanger the 6.5 percent of GNP primary surplus target would generally be contrary to the spirit and letter of the IMF-supported program.

QUESTIONER: Are we anticipating at the Spring Meetings there will be any kind of an update on the consultations on the imbalances?

MR. HAWLEY: I am sure they will be referred to during the course of the Spring Meetings, yes. So, at that point, the membership will have an opportunity to review the work that has been done in this area with the participating group of countries on the first multilateral consultation.

QUESTIONER: What is the current state of the WEO embargo on some of the reports out of Europe about some of the data that will be in it? What is going on there and will there be any changes in the release because of the data that apparently has come out already?

MR. HAWLEY: Well, as I am sure you know, we don't comment on reports on WEO numbers before the publication of the WEO report which next is going to be on April the 11th.

QUESTIONER: But your announcement last week about the changes to the embargo procedures suggest that they are actual leaks as opposed to just speculation about what might be in there. Does that change anything?

MR. HAWLEY: As I say, I don't have anything to say on the stories about WEO numbers.

QUESTIONER: You said the membership will have an opportunity to review the work that has been done. Does that imply there is some sort of interim report that will be presented?

MR. HAWLEY: I don't have details on the specifics at this point.

Okay, if there are no further questions, we will close this briefing. Thank you very much.

[End of press briefing.]


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