Transcript of the Press Conference on the Release of the July 2016 World Economic Outlook Update

July 19, 2016


Maurice Obstfeld, Economic Counsellor and Director of the Research Department

Gian Maria Milesi‑Ferretti, Deputy Director, Research Department

Oya Celasun, Chief of the World Economic Studies Division, Research Department

Olga Stankova, Sr. Communications Officer, Communications Department

MS. STANKOVA: Good morning, and good afternoon to those who are watching us online from other parts of the world. I am Olga Stankova, from the IMF Communications Department.

Thank you for joining us for this press conference on the World Economic Outlook Update entitled “Uncertainty in the Aftermath of the U.K. Referendum.”

At the press conference with us is Maury Obstfeld, Economic Counsellor and Director of Research of the IMF. To his left is Gian Milesi-Ferretti, Deputy Director in the Research Department. To Maury's right is Oya Celasun, Chief of the World Economic Studies Division in the Research Department.

With this I will pass the microphone over to Maury Obstfeld for his introductory remarks, and then we will take your questions.

MR. OBSTFELD: Thank you, Olga, and good morning everyone. The United Kingdom's June 23rd vote to leave the European Union adds downward pressure to a world economy at a time when growth has been slower amid an array of preexisting risks.

The first half of 2016 revealed some promising signs. For example, stronger than expected growth in the Euro Zone and Japan, some recovery of commodity prices.

As of June 22nd, we were therefore prepared to upgrade our 2016-2017 growth projections slightly. But Brexit has thrown a spanner in the works. The new WEO update gives our revised numbers compared to April when we were predicting 3.2 percent global growth of output in 2016, and 3.5 percent in 2017.

Today's WEO update downgrades both of those numbers by .1 percentage point to 3.1 and 3.4 percent, respectively.

Relative to the April baseline, this new baseline concentrates the growth slowdown through 2017 in the advanced countries. Overall, outside the advanced economies, gains in the emerging country group are balanced out by losses in the low-income group.

The growth reduction in Sub-Saharan, which is largely driven by two of the largest countries, Nigeria and South Africa, has a dramatic implication.

In 2016, regional output growth per capita will actually be negative. In other words, output growth will fall short of population growth.

Our revisions incorporate projected negative effects of Brexit, but also other developments since April that led us to adjust the outlook.

Naturally, the direct effects of Brexit are greatest in the United Kingdom. They also affect Europe to a significant degree. But our projections for other areas are little affected by Brexit in the baseline scenario.

Despite an uneven distribution across regions of the world, our overall growth downgrade for the baseline global projection is moderate. And it reflects, among other things, a relatively benign assessment of Brexit's negative impact.

That scenario, however, is based on country level information that is available now, and now is less than four weeks after the actual Brexit vote, so that's a very limited span of information.

It is important, therefore, to underscore that the real effects of Brexit will play out gradually over time, perhaps over many months adding elements of economic and political uncertainty that will have to be resolved over a long period.

This overlay of extra uncertainty in turn may open the door to an amplified response of financial markets to negative shocks.

Thus far, modestly reduced central scenario is in our judgment the most likely. There are other downside possibilities with substantially lower growth in Europe, and palpable spillovers outside of Europe.

Because the future effects of Brexit are unusually uncertain, the WEO update presents two explicit downside scenarios. These are model-based scenarios - one that is moderately worse than our baseline, and one that is significantly worse than the baseline.

These scenarios are driven fundamentally by the uncertainty Brexit introduces about the U.K.'s ultimate trade relationship with the remainder of the E.U. and with the wider world.

There's also uncertainty about the length and contentiousness of the negotiations, of market's difficulty engaging how the resulting uncertainty will depress demand, specifically, investment, consumer durables, and hiring.

And these scenarios also take account the possibility of a financial tightening that leads to widespread banking sector distress in the Euro Area.

The alternatives to development the international trade effects of Brexit, the negative effects, would have to more disruptive than we now think is likely. And, moreover, the effects of economic uncertainty on demand would have to be greater than is yet evident in the data. But in these scenarios, those effects are high enough to trigger severely negative financial feedback loops.

Indeed, a main reason why we place less weight on those alternative scenarios, especially the more severe one, is that financial markets have proven resilient in the wake of the referendum. They've repriced in an orderly fashion to absorb the news.

This benign result owes importantly to the efforts of central banks, so preparedness to provide liquidity to financial markets which was clear before and in the weeks after the referendum.

But vulnerabilities persist not least in European banks where we've seen the biggest negative stock market readjustments.

Now, aside from the downside possibilities that are associated with Brexit itself, there is a range of downside risks and fragilities to the outlook owing to longstanding vulnerabilities and pressure points in the world economy.

We've talked about these in previous WEOs, but, briefly, both originating and receiving countries face strains from refugees and other displaced people, and these strains have political as well as economic ramifications.

Geopolitical risks remain, of course, along with political strife in a number of countries. Crisis legacies on both the real and financial sides of the economy ranging from continuing long-term unemployment which erodes human capital to nonperforming loans that still clog bank balance sheets are salient.

Emerging and low-income commodity exporters struggle with balance of payments pressures, debt overhangs, and low investment.

China's welcome transition to a more consumption and service-oriented economy still could be bumpy, especially in view of the continuing credit expansion that supports the official growth targets.

These ongoing risks, joined by the additional risks that the Brexit vote has added, are more worrisome still because expectations of long-term potential growth have fallen. In part, this fall is the result of demographic and technological trends. But lower potential growth also reduces demand today, and with it investment generating even lower potential output going forward in a vicious circle.

Weak demand today can also erode an economy's productive capacity through other channels: loss of labor skills, discourage labor force participation; lower dynamism in the creation of businesses; and slower diffusion of technological best practice.

Policymakers should not accept the current low growth rates as a new normal dictated by factors outside the reach of policy. The risks go beyond the pure economic costs of a descent into persistent stagnation.

In addition, a slow growth environment will worsen social tensions, tensions associated with long-term wage stagnation, structural economic change, and threatened entitlement programs.

These stressors are contributing to demands for inward-looking solutions that seek to reverse long-term global trends at the expense of the open dynamic markets that have delivered world-wide growth throughout most of the post-war era.

It's up to policymakers, and even more to political leaders, to offer a narrative about these long-term developments that counters the popular narratives, narratives that blame all ills on globally-oriented markets.

But that narrative also has to be matched by the hope of policy actions that can restore middle classes and a sense among voters that the gains from growth can be more fairly shared.

With policy space constrained along several dimensions, it is critical to deploy all of the main policy levers effectively, growth-friendly fiscal policies, well-sequences structural policies, and a monetary policy framework that supports anchored inflation expectations.

Efficient policy packages will exploit synergies across various policy instruments, and policy can be even more effective if it is able to tap synergies across countries as well.

More than ever, policymakers should consider the incidence of their measures across different income groups, along with accompanying actions to support cohesion while promoting economic growth and stability.

With that, we welcome your comments, your questions. Sorry.

MS. STANKOVA: Thank you, Maury. And now we'll take your questions.

QUESTIONER: You have basically sort of three scenarios that you look at Brexit through, and you've chosen one that's fairly benign, that sort of assumes a lot of continued economic integration between the U.K. and the E.U.

I'm just wondering sort of if you can explain a bit more why you chose that one versus some of the more dire predictions. Sort of was that because of the, you know, the market reaction and the rebounds in the markets? What other facts did you use to make that decision? Thanks.

MR. OBSTFELD: Well, the market reaction has certainly been reassuring in that markets remained orderly. Market function was maintained quite smoothly, and that was a good thing because a number of people worried ex-ante that that might not be the case.

With less than four weeks of data though, it is hard to tell what the ultimate outcome is going to be, and negotiations have not started. Article 50 has not been triggered, so there's a lot or uncertainty.

And as we see more data starting to come in, you know, late in August and the fall, we may revise our picture. And so the question we asked in devising those downside scenarios is: What could be the spillover of that? Now the reason we view those scenarios ad inherently less likely is that they rely on a confluence of negative factors. If you will, the kind of perfect storm effect where a number of things that are not necessarily independent but that may not be that likely taken individually, come together. And so you are basically multiplying probabilities together to get these scenarios.

So, you know, based on what we've seen, it's very hard to say that the moderately severe, and even more so, the terrible scenario are very likely. That's why we went with, you know, what we've had as the -- what we have as the baseline. Something that is moderate that projects a fairly cooperative negotiation ultimately between the EU and the U.K. which we think would also be in the mutual interest of the parties.

QUESTIONER: Since you invited us to come to comment, well, I may just point out that whenever I get a response from the IMF, that they can't comment on speculative scenarios, I will point them back to the Brexit scenarios that were speculated in this wheel. But more seriously, can you tell us what you think, Barry Eichengreen raised the point that perhaps the proposals to implement high tariffs on Chinese imports by Trump, could be a good thing, given low inflation; or, that they could spark inflation where central banks have been unable to do so?

Secondly, can you say specifically what the G20 should be doing this week to address this low growth that they haven't done already? I have more, but I'll save them.

MR. OBSTFELD: I'm embarrassed to admit I haven't read my colleague, Berkeley colleague Barry's piece, so I just have to conjecture about what he is saying. You know, as a matter of theory, a single country can divert world demand away from other countries and toward itself through tariffs, and in fact through manipulating its currency. We saw a lot of that during the Great Depression, and we learned, or we thought we had learned that the problem with that strategy is that other countries respond and at the end of the day everyone can left worse off.

As a result, we decided after World War II to set up cooperative institutions, like the IMF, like the general agreement on tariffs and trade, which evolved into the WTO to promote more cooperative behavior that would be in the interest of the global economy, generally, but also in its members, because it's easy to get into prisoner's dilemma where everyone is worse off if countries just pursue their narrow interest, in the way that occurred during the Great Depression.

That system has generated tremendous growth throughout the world. It's been a huge success on the whole. And conversely stepping back from that system we would open the door to, you know, widespread protectionism, and instability. Now it's an illusion to think that, you know, one country can have the best of it without other countries retaliating, this is why we designed the Post War Order that we've designed. You know, for countries to step away from that Post War Order we would open the door to economic instability and probably more political instability as well.

On the G20, what we are looking for is an endorsement of really using all the policy space efficiently. Monetary policy has been bearing, you know, too much of the burden of bolstering inflation expectations, of bolstering growth. And we think it's time to think more about structural policies and of course the G20 is working on those, in its Framework Working Group.

Think about how fiscal policies can cooperate with structural policies, and how they can be used in, you know, smart, efficient ways to support demand and support structural reform. So, there's a lot that the G20 has been doing, but in our view there's more they could be doing.

QUESTIONER: Two questions for you, one on Turkey and one on the Fed. I mean, even before the attempted coup Turkey was on the list of some people's fragile five. They have a lot of external issues, I'm just wondering what you think will be the macroeconomic impact of the coup. What type of uncertainty effects may play out over the coming months? And then on the Fed, I'm wondering how Brexit may have affected your base case for Fed normalization. Thank you.

MR. OBSTFELD: You know, on Turkey we are watching the situation carefully since it is dynamic and is evolving, and also monitoring the economic factors. We think first of all that aside from the inherent value of democratic institutions it's very important to preserve them in Turkey, that has been one of the foundations of the economic accomplishments that the country has made over several years, and we wouldn’t want to see those endangered.

We are seeing some volatility in the financial markets. The Turkish authorities, particularly the Central Bank, it stepped in very effectively to provide liquidity, and we would anticipate in our -- for the baseline, but that things will settle down. Again, that will require, you know, continued vigilance by the Turkish authorities.

You know, on the U.S. the markets are certainly saying that the further -- any further increase in the Fed-funds rate is going to happen farther out in the future than we would have thought before Brexit.

The Fed is obviously going to continue following its data dependent approach, and we'll be looking at developments in the U.S. economy, as well as threats to the U.S. economy from abroad, you know, based on the data we've seen, one would have to guess that other things equal, we should revise our expectations in the direction to which the market is pointing. But of course, you know, incoming data could change that, and the Fed is going to react flexibly to meet its mandate.

QUESTIONER: I'm just wondering if you could provide some more color on your outlook for the U.S., there have been concerns about the slowdown in hiring really throughout the year, but sort of punctuated by the slowdown in May hiring. Do you feel that that has been put aside of the strong June job support, and what do you see in terms of hiring and the employment rate going forward?

MR. OBSTFELD: Okay. You know, the May number was very low, especially after the downward revision in the subsequent month data. The June data were incredibly strong. These data are quite noisy and in fact the May data, once you take into account the effects of the Verizon strike, strike, we are in the sort of standard error band of the volatility inherent in these data.

The big picture if you average over the last year or so is that there is job growth at approximately 150,000 a month, that is very healthy, at this stage of the cycle where the unemployment rate is below 5 percent. It's consistent with further falls in unemployment, in fact, and I don’t think one would look at that jobs picture and say there's a problem. This is a very mature recovery, and seeing those sorts of job numbers, you know, if anything, are real positive in terms of growth.

The other issue that I think is important is participation, we saw participation drop a lot in May. It rose back in June, and that’s going to be another important number to watch. But I don't think -- I think the June numbers have pretty much erased most of the concerns about the very weak May numbers. I don’t know if anyone has anything to add about U.S.

QUESTIONER: I notice the projection for China remain broadly unchanged in the update of the Brexit. So, China has a big trade volume with the EU, and a growing trade with the U.K. Do you think the projection is a little bit too optimistic?

MR. OBSTFELD: Well, we upgraded China actually by 0.1 percentage point for 2016 in view of the support that the authorities have been providing for the economy. Let me say a couple of things. One thing about Brexit first, and then come back to talk a little bit more about that policy support.

You know, China and the EU are important mutual trade partners, and the anticipated slowdown Europe, even in our base line, will affect China slightly. You know, possibly up to 0.1 percentage point down in 2016 and 2017. So the effect is there, and it's offsetting a lift from the policies that the authorities have taken to hit their growth target.

Now, on the other hand, we are concerned about those policies, in the context where there remain some imbalances in the economy in terms of, you know, impaired assets in the banking system, and the process of shifting the economy from state-owned enterprise system more to the privately-owned system.

We've seen continuing strong domestic credit growth, we've seen more support for firms in the state-owned sector, maybe a little bit at the expense of the private sector, and those are trends that -- those actions are counter to the trends of where we think the Chinese economy is going, has to go, where the authorities want it go in the long term. So that leads us to leave our 2017 number unchanged, and to also worry about potential bumps in the road, going forward.

QUESTIONER: I wanted to ask you, refocus on Sub-Saharan Africa for a moment. The overall number is fairly low, it's been downgraded, which is I guess a concern given that Sub-Saharan Africa needs to have fairly strong growth in order to support sit own population growth and development. Secondly, on Nigeria, that number is pretty starkly downgraded in this outlook. Can you tell me what the major reasons are, that you think that Nigeria's numbers have come down so much in the last few months since April. Thank you.

MR. OBSTFELD: Well, it's important to emphasize that Sub-Saharan Africa is fairly diverse in how different economies are doing. And as you say, Nigeria is in particularly difficult situation. I'm going to let my colleague Oya, respond on the details of that.

MS. CELASUN: That’s right. The forecast for Nigeria has been revised down for both years, especially this year. There are multiple reasons; one key reason was the supply disruptions in the oil sector due to activity in the Delta Region, for sure. There were energy power outages. The delayed budget didn’t help, and more generally, effects shortages which is, to some extent, being alleviated now, didn’t help with the purchases of intermediary goods investment.

All of these factors combined to pull down the forecast for this year. Some of these will ease going forward, hence, the downward division for next year was less and we expect some rebound in growth next year.

MS. STANKOVA: I will take a follow up question from online on Nigeria. If you could say a few words to be add what can be done to save the Nigerian economy at the time when the local currency back has been removed.

MR. CELASUN: I think what our team has been emphasizing is a need for a coherent, comprehensive package. One aspect of that is to restore fiscal sustainability, so there’s some work to be done on the fiscal side. Restore external imbalances to greater flexibility on the exchange definitely goes in the right direction there. But there seems to be more to be done.

More generally, there’s also a need to deal with structural reforms, ensuring inclusive growth, better business climate, greater certainty for businesses going forward.

QUESTIONER: You project a negative growth of 3.3 percent for the Brazilian economy this year, and a positive growth of 0.5 percent next year, if I’m reading correctly. That’s a jump of 3.8 percentage points. What do you -- how do you explain this newfound strength that you’re projecting?

MR. OBSTFELD: I will turn that over to Oya, once again.

MS. CELASUN: Okay. So what we’ve observed in Brazil recently, since March, has been a turning around in confidence. We see that in indicators of consumer and business confidence. We definitely see it in financial markets. Exchange rate has strengthened quite significantly as well.

So this strength in the early part of the economy led us to believe that the turnaround to positive growth may be sooner than we had forecast in April. We are expecting -- I mean, the factors that pull down the resilient economy, the adverse terms of trade shocks, political uncertainty, to some extent. They are financial tightening, delayed adjustment in tariffs that weighed on consumer confidence.

We already -- the economy is now -- these effects are gradually phasing out going forward. So minus 3.3 is clearly not a normal growth rate for the Brazilian economy. We are just projecting a normalization.

QUESTIONER: 3.8 percentage points is a lot of growth for a performance that since April 2012 has been on the negative direction. You don’t find that too optimistic?

MS. CELASUN: It was a combination of multiple factors, multiple shocks that weighed on the economy. Again, those will be dissipating, and we do see evidence of the economy turning around.

MR. OBSTFELD: I mean, it’s a 3.8 percent turnaround. It’s not 3.8 percent growth.

MR. MILESI-FERRETTI: When the economy was shrinking very fast in the latter part of 2015. So the economy gets this year, a very weak growth rate, because of that. Just stopping that shrinkage by itself implies a very large turnaround in the growth rate. It’s just that the contraction is halting as the tide gradually turns.

MS. STANKOVA: Let me follow up with a question from our online audience. Which elements drive you to rise the growth projections in Mexico in 0.1 points to 2.5 percent?

MS. CELASUN: That’s, again, once again, the performance of the economy early in the year in Q1 has been good, driven by domestic demand. That’s the main factor, and better oil prices are helping as well.

QUESTIONER: Can you explain the impact of Brexit on countries like Macedonia? Most of the Balkan countries who are not member of the EU, but they are candidate entries. What currency is linked to (inaudible).

Last year we had one of the biggest growths in Southeastern Europe, but what about now?

MR. OBSTFELD: I think there’s bound to be some spillover from any reduction in growth in the EU itself. To the extent that currencies are linked to the Euro, the Euro is a little bit weaker. That could be a plus. But in general, while the effects may not be huge, you know, we will definitely see something.

MS. STANKOVA: Thank you. Let me take another question from online that’s on the Middle East. Your impact for the Middle East is small and meek, so you downgraded the oil price outlook. Saudi Arabia, for example, you’ve increased for next year’s likely. If global growth will be slower and weigh on your oil price outlook why is there not a cut for gross outlook for Gulf oil producers?

MS. CELASUN: So on that for the Middle East, on the oil exporters, which are many in the region, the partial recovery in oil prices has brought some relief. There’s a lot of diversity within that forecast. Not many countries have revised their forecast.

One that I would point to which has driven the headline number is Iraq which has seen an upward division for 2016 growth, but a downward division for next year which is weighing in the forecast. This was actually published as part of the Iraq Staff Report last week.

This partly, for this year, especially reflects divisions to national accounts data. Going forward, it reflects a technical revision in terms of our projection for oil production.

QUESTIONER: The IMF has warned the faster credit growth might -- sorry, let me put it that way. The IMF has one of the faster credit growths might create a risk for the economy, and so how the IMF suggest China to strike a balance between reducing the credit, slowing the credit growth and maintaining and relatively stable growth? Thank you.

MR. OBSTFELD: Well, we recommend a number of reforms to the system. There is already a big problem of impaired loans which are on banks’ books which have not really been dealt with. The authorities are exploring mechanisms to handle those, financial engineering types of mechanisms such as debt equity swaps, and secondary markets.

There needs to be a re-intensification of efforts in that area, and in infrastructure for, for example, you know, pricing and disposing of non-performing loans. These sorts of actions will help the banking system more effectively support the economy, actually. So we don’t view the need to strengthen the financial sector as being in conflict with the needs of growth. We think they go together.

QUESTIONER: Thank you. The Japanese have talked about intervening of the yen because of its strength over the last several months. Do you think that the yen’s movement has been orderly?

Secondly, there’s been a lot of effects volatility. Should global policy makers do anything to temper that?

You don’t have Turkey in the adjustments. Can you give us some understanding of your change in outlook for Turkey?

Finally, China’s overcapacity issue. How much is that weighing on the global disinflationary pressures?

MR. OBSTFELD: Okay. That’s a lot of diverse questions. Thank you. You know, on the yen, we have seen some currency volatility in recent weeks, but we would not characterize conditions in the yen market as being disorderly conditions. It is clear that, you know, Japanese growth is facing challenges, and the attainment of a 2 percent inflation target is facing challenges.

We think that policy tools that are available, you know, the three arrows. Plus, perhaps, attention to the wage setting process in Japan through some sort of income policy would be the ways to go to help the economy attain higher growth and a target inflation rate. So we don’t view intervention as being a necessary or useful part of that package.

On overcapacity, you know, there is global overcapacity in manufacturing that we think does, to some degree, weight on inflation. We will be in the October WEO, World Economic Outlook, having an analytical chapter on global deflation which will look at some of these issues in more detail. So if it’s okay, I’ll sort of put you off until then and plug the WEO at this opportunity.

On Turkey, I will defer to Gian Maria.

MR. MILESI-FERRETTI: So as you can imagine, our forecast was prior to the events of the past few days. It was for a broadly stable outlook over the next two years. Just some marginal reduction for next year given the more difficult external environment. But, of course, we’re going to have to watch how, you know, financial markets react to the current situation. How the situation evolves over the next few months to make an assessment of the implications of recent events on the outlook.

But overall, the whole region had -- Turkey, but also other countries in Central and Eastern Europe had a relatively modest changes to the outlook compared to April.

QUESTIONER: So am I to infer from your response that there is no -- the IMF doesn’t believe at this point there’s a need to think that Turkey’s growth rate could need to be downgraded.


QUESTIONER: Because of the coup?

MR. MILESI-FERRETTI: What I’m saying is that we finalized our projections --


MR. MILESI-FERRETTI: -- before the event occurred.


MR. MILESI-FERRETTI: So, of course, they cannot reflect it for that reason.

QUESTIONER: Got you. Okay.

MR. MILESI-FERRETTI: Which will, of course, watch it as I say, very carefully.

QUESTIONER: That other question about taming -- what can global policy makers do to tame FX volatility, if anything?

MR. OBSTFELD: You know, flexible exchange rates play a very useful role in promoting international adjustment in acting as a buffer when real shocks occur. So it’s not at all obvious that exchange rate volatility, per say, is a bad things. Just as we, you know, think that the adjustment of prices in asset markets can sometimes go a little too far. But in general, you know, those price signals are very useful for guiding economic activity to its most efficient uses.

So, you know, I sort of reject the premise that volatility needs to be tamed. I think when markets become disorderly there is a case for that. But the floating exchange rate system has worked tolerably well in, you know, reconciling different countries’ policies as they seek to pursue their policy mandates. It’s not perfect.

There are tensions that arise, for example, over the role of exchange rates in trade. But overall, I wouldn’t see the G-20 embarking on a new plaza accord or some grand scheme of that sort which would really force them to subjugate national, monetary, and fiscal policies to an exchange rate goal. That’s something that’s simply not going to happen.

MS. STANKOVA: We have only time for maybe two quick questions. One I will take from online, another from the audience.

From online, to follow up to some extent on your discussion. Do you fear that the world with zero to negative interest rates will exacerbate the savings lot, fill the depression global consumption?

MR. OBSTFELD: Well, low interest rates, low real and nominal interest rates reflect both the low growth in the world economy that is current and expected, and low expectations of inflation in many countries. I view these as symptoms rather than causes.

You know, central banks have lowered interest rates to counter low demand in the world, and to try to meet their price stability mandates. The state of demand is such that very, very low interest rates are needed. Now, that’s not to say that these very low interest rates don’t have some side-effects that can be undesirable.

For example, on pension funds. The business of banking. But what that points to is the need that I mentioned before which is to support monetary policy, to complement monetary policy with other policies, with structural policies, fiscal policies, financial stability policies that can both make it more effective and reduce some of the other effects of monetary policy that we might view as adverse.

MS. STANKOVA: Thank you. One last question, sorry, because we will need to go.

QUESTIONER: There’s been some discussion recently on the whole issue of helicopter money, especially in the context of Japan. What factors do you think policymakers should take into consideration as they consider this alternative?

MR. OBSTFELD: You know, the helicopter money metaphor is a very, very colorful one. But, you know, I think it obscures the main economic issues to some degree. The call for helicopter money, to my mind, indicates the need for a fiscal policy to support monetary policy which it is certainly capable of doing under the current institutional features that govern monetary policy and fiscal policy which have, you know, served us pretty well in many respects.

I would worry that setting up some sort of explicit helicopter scheme would blur the lines between monetary and fiscal in way that would, you know, undermine some of the strong institutions we’ve built in the policy arena, and that have helped us in many ways, and that will also help us going forward.

MS. STANKOVA: Thank you for joining us for this press conference. The press conference is concluded.

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