Transcript of a Press Briefing with Gerry Rice, Director of the IMF Communications Department and IMF Spokesman
IMF News, September 15, 2016
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- Published: September 15, 2016
Announcements and Annual Meetings schedule
- Annual Meetings: October 7th to the 9th, Washington.
- Managing Director Christine Lagarde engagements (selected):
- September 18: speech at the International Bar Association, Washington Convention Center.
- September 19: roundtable in New York on implementation of the 2030 Agenda / sustainable development goals.
- September 22: participation in a USAID event on Financing for Development; speak at UN high-level panel on women's economic empowerment (UNGA week).
- September 26: in Cartagena, Colombia, to attend the Signing Ceremony of the Peace Agreement.
- September 28: Curtain-Raiser speech at Northwestern Kellogg School of Management, Chicago (webcast-live).
- Deputy Managing Director Mitsuhiro Furusawa visits:
- Visiting Guinea (today); tomorrow meetings with high-level officials.
- Travel to Senegal to meet government officials and participate in a conference on financial inclusion (organized by the Community of West African States and the IMF).
- IMF publications and releases (timing and focus):
- Tomorrow: Staff Discussion Note (SDN) on the economic impact of conflict and the refugee crisis in the Middle East and North Africa; accompanying blog by Christine Lagarde.
- September 27: release of the analytical chapters of the World Economic Outlook (focus: trade, disinflation, and spillovers).
- September 29: release/presentation of analytical chapters of the Global Financial Stability Report (GFSR) (focus: corporate governance, financial stability in emerging markets, monetary policy and the rise of non-bank finance).
- October 1: China's currency, the renminbi, to be added to the Special Drawing Right basket; IMF will provide communications around this.
Ukraine: second review, disbursement, arrears and next steps
- Board action: approved the second review of the Ukraine program (decision announced yesterday).
- Disbursement announced: $1 billion under the second review.
- Publication plan: report to be published soon, together with the report on the ex post evaluation of the 2014 standby arrangement (exact date not available).
- Re-phasing explanation:
- Original anticipated tranche size referenced as $1.7 billion; actual disbursement was $1 billion.
- Characterized as a re-phasing of disbursement to align financing with balance of payments needs and policy implementation.
- Waivers: technical waivers related to some conditions were used; these are described as normal/technical in such programs.
- Next review and disbursement:
- Possible timing: could be by the end of the year (no firm timing or amounts available).
- Any future disbursements and amounts will be decided by the Board at the time of the next review.
- Arrears and lending-into-arrears policy:
- Ukraine has accrued arrears on a bond held by Russia.
- The Board assessed whether the good faith requirement of the IMF policy for lending into arrears to official bilateral creditors had been met and considered that the requirements of the policy have been met.
- IMF not a party to bilateral negotiations between Ukraine and Russia; welcomes initial contact and encourages continued discussions to find cooperative solutions that contribute to financing and debt objectives of the programs.
Greece: on-the-ground mission, Article IV, and labor market reform
- Current engagements:
- Fund mission on the ground this week working with partners in the Troika and European institutions (discussions around the ESM Program).
- Article IV process with Greek authorities to begin next week (first Article IV with Greece in about three years); normally lasts a couple of weeks; outcome: Article IV communication at end of the process.
- Distinction:
- ESM program discussions (European Program) vs. IMF Article IV consultations (IMF process).
- Labor market reform:
- Under active discussion in the context of the ESM review and the upcoming Article IV.
- No IMF detailed position released in the briefing; IMF described as "always flexible" and will discuss specifics during missions and consultations.
Egypt: staff-level agreement and financing
- Staff-level agreement: three-year facility for an amount of about U.S. $12 billion.
- Board timing: expected to meet in a few weeks' time to consider the program.
- Complementary financing sought:
- IMF proposed commitment: $12 billion over a 3-year period.
- Additional financing sought from others: an indicative additional $5 to $6 billion.
- Progress on reforms:
- VAT law passed; IMF describes this as a "historic achievement" and a modern, efficient tax that will increase revenues, reduce the budget deficit, and free resources for social spending focused on the poor and vulnerable.
- Bilateral discussions on financing:
- Christine Lagarde discussed reform program and financing on the sidelines of the G-20 with President Sisi.
- Productive discussions reported with China and Saudi Arabia regarding contributions to additional financing (no country-specific contribution amounts provided).
- Transparency: specific financing commitments and numbers to be communicated at the time of the Board meeting and in subsequent publication of documents.
Mozambique: undisclosed borrowing issue, audit and engagement
- Presidential engagement: President Filipe Nyusi in Washington; meeting with Christine Lagarde scheduled for this afternoon (ongoing high-level dialogue).
- IMF staff mission: will visit Maputo on September 22 to review recent economic developments, advise on macroeconomic policies, and look in particular at the 2016 revised budget and recently adopted monetary policy measures by the Bank of Mozambique.
- Context:
- Prior staff visit in June was a fact-finding mission linked to previously undisclosed borrowing.
- Reports indicate Mozambican authorities are open to an international audit of its public debt; IMF welcomes transparency measures and sees audit openness as a positive step.
- Program status: the upcoming September 22 mission will not hold discussions for a review under the SCF arrangement currently in place.
Spain: growth and medium-term outlook
- Recent assessment:
- Spain's strong economic recovery continues; real GDP growth in Q2 2016 was stronger than expected.
- Revised projections to be released with the World Economic Outlook at the Annual Meetings in October will reflect stronger growth in Q2.
- Medium-term projection:
- GDP growth projected to moderate to potential rate of around 1.5 percent.
- Constraints: weak productivity growth, debt overhang in some sectors, and high structural unemployment.
- Uncertainty: IMF acknowledges concern about uncertainty as a risk to growth but notes no current evidence of negative impact on Spain’s growth at this stage.
South Sudan and Zimbabwe: operational constraints and arrears
- Zimbabwe:
- Status: no financing program under discussion with Zimbabwe at this point.
- Authorities have announced a plan to clear arrears; once arrears are cleared the IMF Board would need to discuss normalization of relations and potential next steps.
- South Sudan:
- Operational constraints: IMF staff recently evacuated from Juba; technical assistance and capacity development program on hold; all missions suspended.
- Earlier engagement: Article IV consultation conducted earlier in the year (through June); conditions have deteriorated since then and an updated mission would be required to conclude further work, likely not until the end of the year.
United States outlook and IMF forecasts
- U.S. outlook:
- Recent weak U.S. GDP data, particularly on private investment, are of concern and contrast with solid labor market and robust consumer demand.
- IMF staff will revise downward the forecast for the U.S.; specific numbers to be published in October with the World Economic Outlook.
Institutional appointment
- African Department leadership:
- Christine Lagarde appointed Abebe (Abe) Selassie as Director of the IMF’s African Department.
- Abe will begin his work on September 19th, succeeding Antoinette Sayeh.
Transcript of a Press Briefing with Gerry Rice, Director of the IMF Communications Department and IMF Spokesman; September 15, 2016. IMF Communications Department.