Transcript of IMF Press Briefing

November 9, 2017


MR. MURRAY: Good day. I'm William Murray from the Communications Department here at the International Monetary Fund in Washington. As usual, this briefing is embargoed until 10:30 a.m. Washington time. That's roughly one hour from now. Before I take questions from the journalists here in the room and those of you that are online, let me just run through some brief announcements and other items.

I'll start with management travel. As many of you probably already know, Managing Director Christine Lagarde arrived earlier today in Da Nang, Vietnam, to participate in the APEC Economic Leaders meetings. She will be in Vietnam for the next few days. After that, Tuesday, November 14, Ms. Lagarde will travel to Singapore, where she'll have meetings with the authorities and other stakeholders. I do not expect any public events while she's in Singapore, but Media Relations can update you if that changes.

And then on Thursday, November 16, the Managing Director will be in Kingston, Jamaica, for the Western Hemisphere Department's annual Caribbean Forum, which convenes leaders, finance ministers, central bank governors, and private sector executives. This year's forum is entitled: “Unleashing Growth and Strengthening Resilience in the Caribbean.” That is also the title of a book that will be launched in Kingston on November 17 at the University of West Indies. Both the Caribbean Forum and the book launch at UWI is open to the press, and we will have press officers on the ground in Kingston as well, so if you want to follow up with Media Relations on more details, please do.

She will also then, the Managing Director, on November 17th will have a series of official meetings in Jamaica with the authorities, including with Prime Minister Holness and his cabinet. I expect they'll be a press availability on Friday, November 17 in Kingston following that meeting, and she'll also have a series of meetings with women leaders, a private sector group that serves as an oversight body for the IMF program with Jamaica. And then she'll have a meeting with Jamaica's opposition party leaders before concluding her official visit to Jamaica.

Turning to David Lipton, our First Deputy Managing Director, David will be in London on November 14 to address a conference hosted by UBS. He'll be the keynote at that conference, and Media Relations will be making his remarks available to the press, I assume under embargo, on November 14. On November 16 and 17 here at IMF headquarters we will be hosting the fifth Statistical Forum. That will be where we will discuss how to measure the digital economy. The keynote speaker as this year's forum is the CEO and co-founder of Blockchain, Peter Smith. Deputy Managing Director Tao Zhang will give the opening remarks at the Statistical Forum, and then First Deputy Managing Director Lipton will close the fifth Statistical Forum on November 17.

Let's see. Jumping back a little bit, on November 13, we will be releasing the Regional Economic Outlook for Europe. That will be released at 10:00 a.m. Central European time. That's 4:00 a.m. Washington time. This report covers recent economic developments and the outlook for both Western and Central, Eastern, and Southeastern Europe. This will be the first release in several years of a conjectural chapter covering the whole European continent. The report will also contain two analytical chapters that will explore the effectiveness of judicial reforms in Central and Southeast European countries, and the prospects and challenges for the banking sector in the Western Balkans.

Finally, let me remind everyone here in the room and those watching online that our next press briefing will likely be in three weeks rather than two. That's due to the Thanksgiving holidays that are celebrated here in the United States, which the IMF headquarters observes. That holiday is on November 23, so it's probably going to be three weeks from now that we'll have our next communications briefing. Media Relations, of course, will be on duty and can answer any questions during the holiday period.

With that, let me open the floor to questions, and I'll turn to those that are -- quite a few that we have online. Lady in the back. Thanks.

QUESTIONER: Is the IMF concerned about effects in the global economy if there's a significant delay in concluding the Trans-Pacific Partnership (TPP) negotiations?

MR. MURRAY: Thanks for the question. We're monitoring the developments that are now underway regarding TPP in Asia, but, in terms of its impact on the global economy, we haven't really factored that in to our latest World Economic Outlook. It's something that's, obviously, an important development if there's progress, but right now we haven't drawn a firm conclusion. We have to also see what the content of the TPP is before you're going to decide what its ramifications are.

QUESTIONER: Yesterday the U.S. Treasury repeated, it said this before, that it wants the IMF to be more forceful in addressing currency imbalances, and I was just curious for the view on, you know, whether or not the IMF is already forceful on that topic or whether you agree there's more work to be done there? And kind of what steps are going to be taken to address that?

MR. MURRAY: Okay. Thanks. Let me remind everybody what the process is I think that was referred to in the Hill testimony yesterday.

What’s now known as the External Sector Report. It was a pilot report up until this year when the Executive Board of the IMF, the 24-member Executive Board, that represents the interests of our shareholders, including the United States, had a formal discussion of the External Sector report.

It is an annual report that looks at the 28 largest economies in the world that account for roughly 85 percent of global GDP.

Behind this report is an economic modeling device, the only one of its kind, known as the External Balance Assessment, EBA. That is sort of the exchange rate, analytical took that the IMF uses and has been developing over a number of years.

If you’ve seen our work program, we’ve been pretty clear that the External Sector Report and the EBA will go under a review this coming year in 2018. The model itself, all econometric models need to be updated and dialed in. And that’s certainly the process that’s underway now. It’s early days. I can’t elaborate on where it’s heading at this point or anything. But certainly, there is a process underway to update the modeling that we’re doing.

QUESTIONER: Thanks, Bill.

Just had a question about Venezuela. The IMF Board had issued a warning that they are not in compliance on their data provision that they’re supposed to do as part of their membership. I’m just wondering if you could provide a little bit more rationale behind that move.

And also, we’ve heard that there were some members of the Board that opposed it because they felt it was a political move pushed by the U.S.

I wonder if you could address that?

And then, thirdly, there are U.S. sanctions on Venezuela that would sort of hamper the ability of the country to renegotiate its debt. I wonder if the IMF has a view on that if you think that’s something that is detrimental. Thanks.

MR. MURRY: Thanks.

On the debt question, we’re not involved in the debt negotiations in any way, so I really can’t comment on where things stand there or what the dynamics of those negotiations are.

On the actions that were taken by the Executive Board on Friday of last week, we issued a formal statement. I can only refer to that statement. In terms of the U.S., I’d have to refer you to them. I’m not aware of any specific complaints or anything.

But the process that’s underway, is a well-established process when we have issues with the quality of data that we receive from member countries. I think many of you here in the room are familiar with it. There will be another review by the Executive Board in six months. We’ll see how that goes in the context of Venezuela.

QUESTIONER: Can I just follow up on that?


QUESTIONER: Has there been any contact whatsoever between the Fund and Venezuelan authorities?
MR. MURRAY: Well, they have a representative on the Executive Board. So, there’s contact in that sense. But we have not had any formal, you know, analytical contact, so to speak, assessments. We have not done an assessment of the Venezuelan economy in more than a decade. So, that’s something that needs to be addressed as well. But we have official channels, and since they do have a representative that we can have contact with the authorities with.

QUESTIONER: Thank you.

QUESTIONER: I was wondering if you have any view on Venezuela as well and any risk of contagion in the region? And if yes, which country could be affected? And what would be the conditions of IMF to help Venezuela if the country asks for any help from the IMF?

MR. MURRAY: Thanks for the question.

We have had no requests for support from Venezuela, nor do we have anything to offer in terms of the scale or substance of what that support might take. Of course, it’s a member of the IMF, and we always stand ready to help our members in any way we possibly can. Beyond that, I really am not in a position to talk about our relationship with Venezuela. In terms of spillover effects, that’s something that we are consistently watching.

Alejandro Werner, the Director of our Western Hemisphere Department, addressed this to some degree a few weeks at the Regional Economic Outlook Briefing that we did here in Washington. And it’s certainly an issue that bears watching. At this stage, we’re very, very concerned about the humanitarian crisis that’s involving Venezuela.

QUESTIONER: Can you please update on all the latest developments on the Greek program that is underway? And can you estimate the time of its completion? Will it be before the end of the year? Thank you.

MR. MURRAY: Let me just give you some background in terms of those that are not following Greece closely.

The Fund and the European institutions visited Athens in late October, the 23rd through the 27th of October. That recent staff visit made good progress with the discussions with European institutions and the Greek authorities on ongoing reforms that are supported by the IMF program that was approved in principle last July.

The Greek authorities have a full agenda ahead of them and discussions at the technical level, to advance this work, continue from respective headquarters. We expect the mission to return to Athens toward the end of November. That’s where that stands.

QUESTIONER: Another question on Greece. It seems that the closer we get to the finish line of the Greek program, the more unlikely it becomes for the IMF to be a true part of it. And have you made up your mind yet, or are you still waiting for that agreement? I mean, is it still possible to have that agreement, the debt agreement?

MR. MURRAY: I don’t have any clear guidance other than the fact that we’re fully engaged with the Greek authorities. You know our position regarding debt sustainability in Greece. And that hasn’t changed, so that’s where we stand.

QUESTIONER: ((inaudible] said last week, (that Greece needs more debt relief. You have told us again and again that there are debt discussions underway. So, what is the truth?

MR. MURRAY: Sorry, can you repeat the top of your question?

QUESTIONER: Sorry. Klaus Regling said last week, “we will see no guest if Greece needs more debt relief,” August of 2018. So, you have told us again and again that there are debt discussions underway. What is the truth?

MR. MURRAY: Well, the debt discussions are between the Europeans and the Greek authorities, right? I mean, that’s where those things stand. So, it’s best to talk to the universe of European authorities.

But, you know, in terms of where we stand, our view is that for an IMF program, for financing, we require a substantial debt relief. And that hasn’t changed.

QUESTIONER: So, you don’t engage in these discussions?

MR. MURRAY: We’re actively monitoring the discussions. But the negotiating is not renegotiating IMF data, it’s renegotiating the extensive debt that the Greeks have with their European colleagues and others.

I’ve got a couple more questions on Greece. I’m going to wrap it up. We’ve got a lot of Greece questions here. She’s not in the room, but she is online. Let me read her question.

“Is the IMF concerned about the delay in setting up a functioning electronic auction system? And what would a further delay mean for the stability of the financial sector given the requirements for banks to reduce their non-performing loans?” Thanks for that question. I can offer a brief statement on that. The full implementation of an effective E-auction system is a key reform supported by the IMF arrangement. This reform, together with other reforms of the debt restructuring legal framework, are essential for banks to be able to reduce their very high level of nonperforming loans. They need to reduce nonperforming loans so that they can support the resumption of credit and growth in Greece over the medium run.

We, therefore, encourage the authorities to move forward with implementing the E auction system as quickly as possible.

That’s what I have on Greece today.

I’ve got another question here. This is from Egypt.

“What are the results of your visit to Egypt to conduct the second review of the Economic Reform Program? Your notes about the Egyptian procedures to improve the economic situation. When will the Fund disperse the third tranche of the $12 billion loan to Egypt?”

MR. MURRAY: Thanks for that question.

Our mission is on the ground in Cairo right now. So, I’m not able to elaborate on exact timing. But the mission is underway, and there will be a communication with press in Cairo when the mission concludes. Thank you for that question though.

Another question from the Mideast. It’s on Jordan.

“According the IMF, the Jordanian government has to come up with $500 million in revenue. What are the IMF’s recommendations to achieve this without hurting the middle class?”

Thanks for that question. Basically, our recommendation regarding Jordan is as follows:

Our recommendation remains to remove tax exemptions that disproportionately benefit higher income groups in Jordanian society while keeping those exemptions related to basic food items.

As we said yesterday in a statement, the IMF recommends economic measures that protect the poor segments of society. And we do not recommend lifting bread subsidies.

And I think that’s my questions online. I’m going to turn back to the room if we have anything. More on Greece? That’s fine.

QUESTIONER: It’s about the financing terms and fiscal implications of the F-16 upgrade that the Greek government is currently discussing with the United States.

MR. MURRAY: We’re continuously assessing the fiscal situation and the government’s plans, both on revenue collection and spending. At this point, we do not see a risk to the program targets, and thus, there is no need for more fiscal measures. That’s all I have on that topic. Again, we’re monitoring the fiscal situation and the government’s plans. And at this time, we do not see a risk to the program targets.

Are there any more questions online? I think I’ve covered those with that. Again, we’re embargoed until 10:30 a.m. Washington time. We hope to see you in about three weeks’ time.

Thank you.

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