IMFC Press Conference

IMF News, April 13, 2019

Source details

Event: IMFC Press Conference
Date: April 13, 2019
Time: 12:45 p.m. ‑ 1:20 p.m.
Speakers: Lesetja Kganyago (Chairman, IMFC; Governor, Reserve Bank of South Africa), Christine Lagarde (Managing Director, IMF), Gerry Rice (Director, Communications Department, IMF)
Media relations contact: PRESS OFFICER: Alistair Thomson; Phone: +1 202 623-7100; Email: MEDIA@IMF.org

Finding: Global expansion is continuing but at a slower pace since the IMFC last convened in October.
Projection: A pickup is expected next year, but with notable downside risks.
Downside risks highlighted:
- Trade tensions
- Geopolitical risks
- Political uncertainties
Recommendation: Act promptly to protect the expansion.

Fiscal policy:
- Should remain flexible and growth‑friendly.
- Rebuild buffers.
- Strike the right chord between debt sustainability and supporting demand.
- Social objectives should be considered in the fiscal mix.
Monetary policy:
- Ensure inflation is on track towards target.
- Keep inflation expectations well anchored.
- Decisions should be well‑communicated and data‑dependent.
Financial stability:
- Tackle emerging financial stability risks with all available tools, including macroprudential tools.
Governance of the IMF:
- Reaffirmed commitment to a strong, quota‑based, and adequately resourced IMF.
- Goal: complete reforms by the time the IMFC next meets in October at the Annual Meetings.

Joint action and upgraded international cooperation flagged as themes.
Priorities identified:
- Trade
- Global imbalances
- International corporate taxation
- Debt vulnerabilities
- Climate change
- Cyber risks
Support noted for Christine Lagarde's Global Policy Agenda addressing these challenges.

Observations:
- Renewed political pressure on some central banks noted.
- Key principles emphasized by central bank governors:
- Accountability — clearly report back to those they are accountable to.
- Transparency — transparent processes for decisions.
- Communication — improve how central bankers communicate technical decisions.
Conclusion: Independence has served central banks well; clearer mandates facilitate accountability. Broader mandates can make accountability more difficult.

Data points provided by Managing Director Christine Lagarde:
- Total volume of goods traded between the U.S. and China cited: $500 billion.
- Applying tariffs to a large portion of traded goods between the U.S. and China: puts at risk 0.8 percent of global growth.
- Eliminating only 25 percent of the barriers on the trading of services: yields a positive effect of 0.8 percent on global growth.

China:
- China is a member of the IMF and subject to an Article IV assessment; developments in China affect the global economy.
Japan and G20 expectations:
- Support for Japan’s leadership of the G20; priorities include demographics, health/pension/fiscal space, and global imbalances addressed via saving‑investment balance.
Venezuela:
- IMF extremely concerned about the humanitarian crisis and displacement affecting millions.
- IMF actions guided by membership recognition of authorities; readiness to help once membership positions allow.
Zimbabwe:
- IMF will conduct a staff‑monitored program with Zimbabwe.
- Social protection and inclusion principles to be applied, with a social protection framework to be discussed at the Board in the next few weeks.
- Potential role for financial technologies to enhance inclusion given current monetary and currency situation.
Greece:
- Informal discussion noted between Managing Director Lagarde and Euclid Tsakalotos about Greece’s economy, fiscal policies, primary surplus, and Greek cinema.

IMFC communiqué captures agreed assessments and policy recommendations.
Momentum noted coming out of the Spring Meetings, with progress toward completing IMF governance reforms by the Annual Meetings in October.

IMFC Press Conference — April 13, 2019