Transcript of the IMFC Press Briefing

IMF News, October 8, 2016

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Date: October 8, 2016
IMF Communications Department — MEDIA RELATIONS
PRESS OFFICER: Phone: +1 202 623-7100 Email: MEDIA@IMF.org
Speakers: Agustín Carstens (Chairman of the IMFC and Governor, Banco de México); Christine Lagarde (Managing Director, IMF); Gerry Rice (Director, Communications Department)

Discussions at the IMFC were described as "extremely productive" with collective sharing of views and possible solutions to economic and financial challenges.
Sympathy and support extended to governments of the Caribbean, especially Haiti, regarding Hurricane Matthew.
Characterization of the global economic message echoed by the Managing Director: "too low for too long and benefiting too few."

The economic outlook described as mixed with concerns about global activity and a range of downside risks.
Signs of recovery noted as slow and principally focused on emerging market economies and a few advanced economies.
Concern about increasingly inward‑looking policies that may derail benefits of globalization, open trade and markets, and technological change.

Commitments:
- Strong, sustainable, inclusive job reach and more balanced growth.
- Use of all policy tools: structural reforms, fiscal and monetary, exploiting synergies among them.
- Reaffirmed commitment to communicate policies clearly, resist all forms of protectionism, and refrain from competitive devaluations.
- Ensure that everyone has the opportunity to benefit from globalization and technological change.
Specific policy priorities underscored:
- Growth‑friendly fiscal policy.
- Continue supportive monetary policy in advanced economies.
- Prioritize structural reforms to raise potential growth.
- Effective financial sector policies to address legacies from the global financial crisis and head off potential systemic risks.
- Stronger global cooperation, including a concerted effort to maintain economic openness and reinvigorate global trade.

IMF to explore further the impact of globalization and technological change, and to help membership understand policy impacts on inequality.
Endorsed continuing work on challenges facing low‑income countries and fragile states, and capacity‑building.
Welcomed extension of the zero interest rate on all IMFC concessional loans and contributions to PRGT loan mobilization efforts.
Membership welcomed steps to maintain current lending capacity and reiterated commitment to a strong quota‑based and adequately‑resourced IMF as important for the Global Financial Safety Net.
Welcomed strong pledges to extend IMFC access to bilateral borrowing as a backstop for IMF resources.
Noted a general quota increase was just completed and that concluding the 15th General Review of Quotas and agreeing on a new quota formula will take additional time.

Egypt:
- A staff‑level agreement reached about three weeks prior identifying reforms to unleash growth.
- A proposed program: US$12 billion over a period of three years.
- Several prior actions (including on the exchange rate and subsidies) need to be completed before Board review and first tranche release; prior actions described as "almost completed, not quite."
- Sequence for first tranche: complete prior actions → convene Board → Board review and approval → first tranche released.
Mexico:
- Acknowledgement that Mexico has undertaken major reforms (education, telecommunications, oil industry, licenses).
- Fiscal policy continuity expected under new Finance Minister Mr. Jose Antonio Meade.
- Recognition that spillover effects from decisions made outside Mexico are a concern for growth.
SDR and renminbi inclusion:
- Integration of the renminbi into the SDR basket was time‑consuming and required reforms by Chinese authorities to meet inclusion criteria.
- Confidence expressed that there will be more issuance of SDR‑labeled and ‑quoted bonds; process expected to take time.

Trade performance: volume of trade has been weak since 2009 and not showing stellar performance.
Protectionist measures: "more than 1,400 restrictive trade measures have been adopted only in G20 countries during the last year."
Emphasis:
- Promote growth through trade and technological change.
- Address those left behind by globalization through targeted government measures.
- Advocate a comprehensive approach combining monetary policy, fiscal policy, and structural reforms because monetary policy alone is insufficient to raise growth.

IMF self‑assessment and reforms:
- The IMF welcomes ex‑post review and Independent Evaluation Office recommendations, has learned and modified practices to remain "fit for purpose."
Political uncertainty and inclusiveness:
- Managing Director emphasized respect for all human beings, focus on addressing discrimination and barriers to jobs and finance for women, and the economic uplift from closing gender participation gaps.
Need for coordinated policy action:
- Reiteration that central bankers cannot be the only actors; fiscal and structural measures are needed to move the growth needle.

Transcript of the IMFC Press Briefing, October 8, 2016 — IMF Communications Department