Transcript of IMF Press Briefing

IMF News, February 7, 2019

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Briefing date: February 7, 2019.
Remarks embargoed until 10:30 a.m. (Washington time).
Managing Director Christine Lagarde:
- In Dubai for the annual World Government Summit; scheduled to deliver a keynote at the Arab Fiscal Forum on February the 9th.
- Visiting Germany next week for the Munich Security Conference and the Munich European Conference; to give a keynote speech on Thursday the 14th and participate in panels (broadcast and live webcast).
Deputy Managing Director Tao Zhang:
- Visiting Dominica and Grenada between February the 11th and the 15th to assess hurricane-affected areas.
Jihad Azour (Director, Middle East and Central Asia Department):
- Launching a departmental paper on financial inclusion for small and medium sized enterprises in the Middle East and Central Asia on February the 12th at the American University in Cairo (open event).
Press registration for the Spring Meetings is open on IMF.org.

Findings and context:

The IMF has not had Article IV policy dialogue with Venezuela since 2004.
The IMF has followed recent statements by First Deputy Managing Director David Lipton highlighting:
- A devastating humanitarian and economic crisis.
- Reports of widespread food and medicine shortages, and worsening health and social conditions.
- Growth projected to contract further in 2019, bringing the cumulative decline since 2013 to over 50 percent.
- Hyperinflation, outward migration, and anticipation that these will intensify in 2019.
Recent IMF contacts with Venezuelan authorities have been focused solely on official data provision.
The IMF has engaged with a broad array of stakeholders as feasible given constraints.

Sequencing, recognition, and program design:

IMF position on official government recognition remains unchanged: the IMF will be guided by the international community/membership on official recognition.
Recognition by the membership is the first step required before further IMF action (including program design) could proceed.
The IMF has a range of instruments (financial instruments, technical assistance, analysis) potentially usable with a member country, but it is premature to discuss specifics for Venezuela until the international community’s guidance on recognition is established.
The IMF is consulting with its membership and “watching that closely” regarding countries’ positions on recognition.

Contacts and timeline:

The IMF is not aware of specific discussions with representatives of the interim leadership or envoys after January 23 (no specific contact date provided).
The IMF has no date for a board discussion on official recognition and will await clarity from membership.

Roberto Cardarelli and an IMF staff team will be in Buenos Aires on February the 11th for the discussion of the third review of Argentina’s economic plan and IMF support.
The IMF strives to meet a broad range of stakeholders in member countries (government, private sector, academia, civil society, sometimes opposition).
Recent meetings: Christine Lagarde met with Minister Dujovne and Central Bank Governor Sandleris; David Lipton also participated.
Lagarde emphasized that program implementation so far has served Argentina well and that continued implementation will enhance resilience and preserve macroeconomic stability.
An updated assessment will be communicated after the Cardarelli mission.

In December the IMF approved a new standby arrangement for Ukraine and a disbursement under that arrangement has occurred.
Lagarde and David Lipton met with President Poroshenko in Davos; the IMF reiterated support for Ukraine and emphasized urgency to accelerate reform.
IMF cooperation objective: to get Ukraine on the path of sustainable growth and improve people’s living standards.
The IMF’s operational stance: it does not engage in politics; it focuses on economics and works with all government political compositions.

The IMF is in post-program monitoring mode with Greece; it has not had a financial program with Greece since 2014.
A recent mission led by mission chief Peter Dolman conducted a visit; the Board will discuss the report in early March and the concluding statement and staff report will be published later.

Key projection:

Banking sector and non-performing loans (NPLs):

Restoring growth-enhancing bank lending requires swift, comprehensive, and well-coordinated actions to prepare balance sheets.
Coordinated steps by key stakeholders are needed to support banks’ efforts to achieve a faster reduction of non-performing loans.
The IMF noted intensified downside risks, including fiscal risks; readers are referred to the recent staff concluding statement for full details.

Confirmation: Zimbabwe has cleared its arrears to the IMF.
Arrears remain outstanding to other multilateral creditors, which limits Zimbabwe’s access to international financial support.
Reported outstanding arrears cited by a questioner (as presented in the briefing):
- 687 million to the African Development Bank.
- 1.4 billion to the World Bank.
- 322 million to the European investment bank.
The IMF encourages peaceful collaboration among stakeholders and policies to stabilize the economy and promote sustainable and inclusive growth.

Barbados:
- The IMF Board approved a program for Barbados under the extended fund facility in October (year not restated here).
Jordan:
- An IMF team led by mission chief Martin Cerisola is concluding a visit conducting the second review under Jordan’s reform program supported by the IMF; the mission is expected to conclude today and the IMF will communicate the outcome.

Federal Reserve:
- The IMF supports the Fed’s recent decision to be patient in determining future changes to the federal funds rate.
- The IMF views the Fed as adhering to data dependence and clear communication to minimize market disruption and spillovers.
World Bank presidency process:
- Selection of the next President of the World Bank is a World Bank membership decision; IMF expects continued strong collaboration with the Bank regardless of outcome.

IMF engagement depends on membership guidance for matters of official recognition.
The IMF updates its Board regularly on relevant country cases; no specific board date is available for Venezuela recognition discussions.
The IMF’s legal department meets regularly with member representatives on technical legal issues; case-by-case guidance is typical for litigation-related opinions.

Transcript of IMF Press Briefing — February 7, 2019. IMF Communications Department.