Transcript

Transcript of IMF Press Briefing

May 9, 2019

MR. RICE: Good morning everyone. And welcome to this Press Briefing on behalf of the International Monetary Fund. I'm Gerry Rice of the Communications Department here at the Fund.

And as usual our briefing this morning will be embargoed until 10:30 a.m., that's Washington Time.

Let me make a few announcements, and then I'll come to your questions in the room, and take a few online as well.

So, our Managing Director, Christine Lagarde, will be visiting the Central Asia Region and Caucasus from May 16^th until the 22^nd, so that's beginning next week.

On May 16, Madam Lagarde will be in Kazakhstan where she will participate in the Astana Economic Forum. And also participate in a Regional Roundtable on Inclusive Growth and Regional Integration in that area.

Following that, Madam Lagarde will travel to Uzbekistan for a series of public and bilateral engagements, both in Tashkent and Samarkand. And she'll deliver a Keynote Speech; meet with the President and authorities. So, that's Kazakhstan, Uzbekistan.

And then finally, Madam Lagarde will visit Georgia, and will be in Tbilisi delivering a Keynote Speech on May 21^st, and again, a series of other engagements on which we will give you the detail, and of course access to all of those public events.

Our Deputy Managing Director, Tao Zhang, will be visiting African May 12^th to 17^th, he'll be in The Gambia, and then in Cape Verde where he will meet with the authorities and have a number of public engagements. Again, we can get you the details of that.

So, that's on announcements. There's one piece of additional news that I want to bring to your attention, because there have been questions asked about this issue in previous press briefings.

It relates to the Republic of Congo, and I can tell you that we have just released a press statement of the staff visit to the Republic of Congo indicating that in fact, discussions there have concluded, and a staff-level agreement has been reached on a program, an IMF program of support, via an arrangement under our extended credit facility.

And there's a press statement from our Mission Chief that is being made available to you right now, with further details on all of that.

Just to say that once the authorities have implemented the pending actions as agreed during this mission, and those pending actions are related to ensuring more transparency in the management and accounting of oil revenues, the IMF Team will submit a report in support of this three-year arrangement, for consideration and approval of course by our Executive Board, which is always the case following a staff-level agreement. We need the approval of our Board.

And this program will support The Republic of Congo in restoring macroeconomic stability, achieving higher, more inclusive growth. The program seeks to restore debt sustainability, improve governance, reduce corruption. It will protect vulnerable groups,and achieve greater transparency and efficiency in the management of public resources, especially in the oil sector.

One other important point related to this. The recent agreement to restructure the Republic of Congo's bilateral debt with China represents a decisive step to restore debt sustainability. This should be accompanied by finalization of the authorities' previously announced strategy to seek a restructuring of their external debt owed to commercial creditors especially that accumulated with oil traders.

So, I wanted to give you that news, it's made available to you, as we speak. Again, it's been an issue that has been raised here before in our press briefings. So, I just wanted to give you that.

Let me turn to any questions that you may have in the room. Good morning.

QUESTIONER: Good morning, Gerry. Some economists in Argentina are suggesting that the market administration renegotiate the agreement in order to extend the repayment of the loan. Is that being considered? Is it a possibility?

MR. RICE: What I would say on that is that we are focused on the implementation of the current program, and that it's designed in such a way to address Argentina's main underlying challenges, and to assure that the country is able to meet its obligations.

So, you know, I wouldn't speculate on any other scenarios that might or might not happen. We're focused on the current program, the current repayment schedule and, you know, that's ongoing.

Let me take -- I can say a bit more on Argentina but let me take your specific question.

QUESTIONER: Thanks. It has been said that the U.S. Treasury was involved in the latest negotiation between Argentina and staff of the IMF. I was wondering if you could tell us a little bit more about that kind of role does the U.S. Government play in those kinds of changes in the regional program. And following up on Francisco's question, is the IMF open to change the repayment of the SBA? Thanks.

MR. RICE: So, again, just on your last point, you know, there is no discussion of that scenario of changing the repayment schedule, focus on the program as is. We think it's designed in such a way that the repayment schedule can be met, so I wouldn't speculate further.

On your other question on the U.S. Treasury, to my knowledge there was not communication from the U.S. Treasury or involvement of the U.S. Treasury in this issue.

And maybe just stepping back a bit, and I can take a couple of other questions, but just for those, you know, following Argentina, where we are, the Team, the IMF Team is current in Buenos Aires, and this is to discuss the Fourth Review of Argentina's program that is being supported by the IMF. So, various meetings ongoing related to that.

We believe that the authority's economic policies underlying this program are indeed helping to address key macroeconomic vulnerabilities, most notably, reducing Argentina's external and fiscal imbalances.

And again, we think that continued efforts with this program, to implement this program in this direction, will lay the ground for economic stability and sustainable growth.

So, again, just to reiterate that we're focused on the current program, support for that, we think it's on the right track, we think that important achievements have been made, particularly in terms of those external -- those macroeconomic vulnerabilities that I mentioned and addressing external and fiscal imbalances.

I would not want to underestimate the challenges that Argentina faces, I would not want to minimize those challenges in any way. And you may have heard Alejandro Werner the other day, who is the Director of our Western Hemisphere Department, who said that the transition, the effort that Argentina is making toward a more open and resilient economy has proven to be more complex than many anticipated.

But at the same time, and he stressed this also, again, important progress has been made, and that also should not be underestimated.

Anything else on Argentina?

QUESTIONER: If I may just follow up, you know. You said that the program is on track, and the IMF has been pretty clear about the need to for steadfast implementation, as you said, but in Argentina the program is a little bit under fire given that, you know, the latest round of market volatility, you know, the sovereign spread, it's a levels not seen since 2014 when the country was in default. Do you think the criticism towards the program isn't fair? Is it overblown, from the IMF perspective?

MR. RICE: You know, I'll probably just repeat a bit what I said that no one, certainly not at the IMF, would want to minimize the challenges that need to be faced, and that Argentina and the Argentine people are facing.

It's a major set of challenges. But again, we think that important progress has been made that should not be overlooked. We think that this program of stabilizing the economy and transitioning the economy to be more open and resilient is the right program. We believe that the implementation of that program is the right way forward. We are on the ground now, we are in Buenos Aires right now. We are discussing further with the authorities, you know, any way in which, you know, we can strengthen implementation, help to strengthen implementation.

We have tried to be flexible and pragmatic in making adjustments to the program that can be helpful, as the IMF always tries to do in any country that we are trying to help, try to be practical, try to be flexible in helping the country to implement the program. We will continue in that mode and, you know, again I think implementation is the name of the game. Good morning.

QUESTIONER: Thank you, Gerry. My question is about U. S. China trade talks. So President Trump has tweeted that the U. S. will increase the tariffs on $200 billion dollars of Chinese products from 10 percent to 25 percent. And the two sides are also, you know, said to negotiate later today.

So what is the IMF's expectation for this round of trade talks? Are you concerned that the trade talks might fall apart and the tariffs will actually go up? Thanks.

MR. RICE: You know, thank you. We are like everyone else, watching the negotiations and the discussions very closely. As we have said before, everybody loses in a protracted trade conflict. If trade is damaged then it threatens growth.

And when we talked about the risks to the outlook recently in the context of our World Economic Outlook update, and during the Spring Meetings, we did talk about trade as one of the risks to growth that we saw out there. So we are really in the mode that we have been in for some time which is to encourage all parties to seek a resolution that supports and strengthens the international trading system and so we would be hoping for a speedy resolution to these discussions.

Clearly tensions between the United States and China in the trade sphere are as I said a threat to the global economy so again, we hope that these tensions can be resolved as soon as possible in a way that is satisfactory to all sides.

I am going to take a few questions that have come up online. I'll take their questions in the room coming back if there are any. But there are a few questions online.

One is relating to Ukraine. And the question relates to whether we have had contact with the incoming administration in Ukraine and the status of the IMF program with Ukraine to which I can confirm that the Managing Director in fact has been in touch with Mr. Zelensky on his election as president of Ukraine and underscored that the IMF continues to stand ready to support Ukraine and to help it meet the challenges that lie ahead.

Madame Lagarde was also in touch at the same time with outgoing President Poroshenko thanking him for close cooperation during his presidency and expressing the hope and the expectation that progress under the economic program would continue.

So we are in touch with the authorities. I do not have specific dates at the moment for the first review mission under the IMF program but we do expect a mission to return to Kiev sometime in the coming weeks and that will be to assess progress under the program and discuss policies for the remainder of the year with the new administration there.

There is a question on Sri Lanka and I will take that. It's from Salong Today and it is asking about are there any plans for debt relief for Sri Lanka given the aftermath of the terrorist attack there?

And, you know, what I would say of course we are as the Managing Director had said, we are deeply saddened by the horrific attacks in Sri Lanka and we have offered our condolences to the authorities and to the people who have been so badly affected there.

On the substance of IMF help, we have a program there with Sri Lanka that is ongoing and indeed next week, our executive board will consider the request from the authorities to complete the review of the 5th review under our program. And indeed, and I think this is the important issue, to extend that program by one additional year which would mean until June 2020. And that extension again to be approved by our board, discussed and approved, that extension will provide additional time to the authorities to anchor macroeconomic stability and complete their reform agenda.

Outstanding access of about $500 million under the arrangement will be rephrased evenly in three tranches over three semiannual reviews under that extension.

There is one more question that I'll take online and it's -- well, actually I see one other one that’s popped up but the one that is there is on Trinidad and Tobago.

How do you see the near-term growth prospects for Trinidad and Tobago? And then there is a longer question which relates to does the IMF have any comment on the statements made by the finance minister who had questioned the validity of the funds growth estimates for 2018 and did we have any comment on that?

So firstly, broadly on the outlook for Trinidad and Tobago, we believe it has started showing signs of improvement from the second half of 2017 and is estimated to have actually returned to positive growth in 2018. And we will be updating that assessment in the upcoming WEO update in July.

On the question about our forecasts and projections, these were published in the April World Economic Outlook, the WEO. They were based on information that was available as of early March, including data provided by the authorities and published information from official institutions in Trinidad and Tobago.

And again, the team will update those estimates in the context of the July WEO update using information available that should take us through early June including actual GDP growth figures for the full year of 2018 which are expected to be released in the coming weeks.

There is one more question that just popped up and it relates to Greece and did we have any comments on Greece?

What I can briefly say is that our staff just completed a short visit to Greece in parallel to the European partner's third enhanced surveillance mission there and we will provide a full assessment of the government's policies during the Article IV consultation cycle that’s scheduled for mid-2019.

There is a second question on Greece. Did Greece submit a request to the IMF regarding repayment of its debt earlier than expected?

The answer is yes. The Greek authorities have informed us that they hope to prepay the part of the outstanding IMF loan that’s subject to surcharge rates, that's about 40 percent of the outstanding loan.

We agree with the Greek authorities that this makes good sense from a liability management perspective though it's our understanding that Greece would need to get agreement from the European partners before this can advance. So again we think it makes good sense but our understanding is the European partners would need to agree as well.

Is there anything further in the room? Otherwise we can keep the briefing today fairly short. Thanks for coming along. I know there is a lot going on in Washington today and you're busy with that, so thank you very much for coming today. Thanks to those of you online and we will see you in two weeks' time.