Transcript - IMF Press Briefing

IMF News, January 26, 2017

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Date of briefing: January 26, 2017.
Press officer contact: Phone: +1 202 623-7100 Email: MEDIA@IMF.org.
Embargo for briefings: 10:30 a.m. Washington time.
Next briefing in Washington: February 9.
Managing Director Christine Lagarde on a "3-nation visit to Africa"; currently in the second country, Uganda, and will next be in Mauritius to deliver a keynote at a conference on cross-border banking and regulatory reforms.
Deputy Managing Director Mitsuhiro Furusawa official visit to Japan scheduled for "February 1st and 2nd" to deliver a keynote at the IMF-JICA Seminar on regional development, fiscal risk, fiscal space and SDGs.

Staff report published this morning following the 2016 Low-Income and Developing Countries Annual Report; explores how growth-boosting policy and reforms affect income inequality in low income and developing countries and how complementary policy measures can offset adverse distributional effects.
Related blog by Managing Director Lagarde published.

IMF does not have annual dues; funding model differs from organizations that require member countries to pay annual dues.
IMF liquidity status: accounts are published weekly on IMF website; described as "liquid" and "in a good place right now in terms of our liquidity."
On U.S. representation: the U.S. has a representative at the Executive Board who "is still seated"; the U.S. Treasury is the IMF's interlocutor with the U.S. government.

Reference to World Economic Outlook Update and January 16 press conference by Maury Obstfeld.
IMF baseline scenario stands as published last week (relative to briefing date).
IMF will revisit forecasts if dynamics affecting the baseline change; long-form World Economic Outlook to be published in April.
Exchange rate monitoring: the IMF looks at exchange rates over a longer timeframe and will assess exchange rates in the context of the U.S. during the IMF's annual review of the U.S. economy finalized by midyear; external sector report published annually in the mid-year June-July period.

IMF remains fully engaged with Mozambican authorities.
IMF is following the ongoing independent audit of Ematum, Proindicus, and MAM and pursuing discussions on the possibility of a new IMF-supported program.
IMF policy on lending into arrears to private debt holders: Fund can provide financial support to members with external arrears to private creditors provided:
- prompt Fund support is considered essential for successful implementation of the member's adjustment program;
- the member is pursuing appropriate policies;
- the member is making a good faith effort to reach a collaborative agreement with its private creditors.

IMF expects the IMF-supported program to continue.
Further discussions on program status will be held during an IMF staff visit to Ghana "at the beginning of February" (staff visit starting in early February) and will carry on into follow-up visits and the Article IV Consultation.

Executive Board expected to discuss the Article IV and the ex-post evaluation reports on "February 6"; publication of those reports will follow shortly after that Board date.
IMF view reiterated: Greece does not need more austerity now; IMF can go along with a program with a "primary surplus target of 1.5 percent of GDP" consistent with policies underway and with commensurate debt relief.
If Greece and European partners decide on a higher primary surplus for a temporary period, IMF would need to evaluate whether there are policies that could credibly support that target.
IMF has articulated a set of reforms (previously) that are viewed as necessary to support a higher target and ensure equitable distribution of adjustment; such reforms should be implemented only once the output gap closes to minimize negative impact on an early recovery.
IMF remains "fully engaged" with Greek authorities and with the European Commission in terms of the ESM program and review.
Timing and decision-making depend on the ongoing process and policy implementation; no guarantees provided on timing, including whether an IMF decision can be made before elections in France and Germany.
IMF Executive Board described as "fully functional" despite questions about U.S. Executive Director vacancy.

Trade is described as an engine of growth for the U.S. and the global economy.
Countries should pursue policies that extend benefits of trade, openness, and integration while alleviating negative side effects of globalization.
On the Trans-Pacific Partnership (TPP): decision to retreat from TPP is a matter for individual countries; IMF hopes to see paths to closer trade integration and will observe follow-up actions.

Good progress made on policies needed to complete the third review under the Extended Fund Facility arrangement.
Remaining issues include finalizing the Memorandum of Economic and Financial Policies regarding the timing of upcoming measures; assuming remaining issues are resolved soon, IMF expects to propose completion of the review to the Executive Board "in the coming weeks" (no specific Board timing provided).

Recommended policy focus: develop a comprehensive economic transformation plan to ensure viability of the dollarized economy.
Specific advice: urgently streamline public sector wages; accelerate public enterprise reform; improve public financial management; develop key infrastructure; strengthen the rule of law and improve governance.

Regional Economic Outlook (Western Hemisphere) published earlier in the week; IMF view:
- Significant uncertainty about the scope, focus, and modalities of U.S. trade negotiations creates a wide range of possible outcomes.
- Expectation that Mexico’s economy will "continue to grow moderately but to enter difficult terrain."
- Outlook clouded by uncertainty about U.S. trade policy and tighter financial conditions, which will be a drag on activity.
- Growth forecasts cited: "1.7 percent for this year and 2.0 percent real GDP growth in 2018."

IMF will publish the Debt Sustainability Analysis (DSA) as part of its materials (DSA "will be part that you’re going to publish").
Press briefing transcript to be published later the same day; updates may be inserted into the official transcript if needed.
For follow-up questions regarding the briefing, contact Media Relations.

Transcript - IMF Press Briefing, January 26, 2017. IMF Communications Department.