Transcript of the COM Regular Press Briefing

September 27, 2019

MR. RICE: Well, good morning, everyone, and welcome to this press briefing on behalf of the International Monetary Fund. I am Gerry Rice of the Communication Department.

As usual this morning, this briefing will be embargoed until 10:30 a.m., that’s Washington time. And as usual, I'll begin with a few announcements and then come to colleagues in the room and take some questions on line as well.

So beginning with a couple of well, actually a few announcements. Bear with me please. As you saw yesterday, the IMF executive board selected Kristalina Georgieva as the new IMF managing director. And indeed chair of the board for a five year term and that will begin October 1 so in a few days' time.

I want to say as I did yesterday when we introduced her to the media, that Madame Georgieva is indeed the first person from an emerging market country to head the IMF since its inception 75 years ago in 1944. So just to pause that we made a bit of history yesterday. I think its good history and all of us at the IMF are delighted to welcome Madame Georgieva to the Fund.

So also on October 1, as the new Managing Director will begin officially here, the First Deputy Managing Director, David Lipton, will be with Chancellor Merkel in Germany participating in the regular annual meeting of the heads of international financial institutions. That will be in Berlin. There will be a press conference.

And then one week later on October the 9th, our new Managing Director, Madame Georgieva, will give what we call our curtain raiser speech. I think you are familiar with it. It's the opening up of the annual meetings of the IMF and the World Bank for 2019.

And she will lay out there what we see as the main issues, topics, for those meetings that begin on October 14, the week of October 14, the meetings begin. But she will give the curtain raiser speech roughly a week ahead and we'll, we are doing that here at the IMF in the atrium upstairs. You're all invited, you're all welcome and we will get that to you of course.

The day after that, October 9, we start the release of what we call in our jargon, the analytical chapters of the main flagship documents, the World Economic Outlook, Global Financial Stability Report, Fiscal Monitor. And those of you who follow us know that we have a series of chapters of those documents that we release in advance of the Annual Meetings.

So on October 9, so the day after the curtain raiser, we will start releasing those chapters and I'm not going to list them all for you, you can find them on the website, talk to someone from media relations, they'll tell you what the topics of the analytical chapters are.

I'll just mention one, which is the analytical chapter this year of the Fiscal Monitor because its focused on climate change and I mention that because of obviously what has been happening in New York this week at the UN General Assembly. And we will try to help you digest this information, get it to you in advance, get it to you under embargo with summaries and all the rest of it as usual.

So the World Economic Outlook will be released, the WEO, and I know everybody follows that very closely because it has our forecasts and our new numbers. We will be on October the 15th, that's Tuesday, October the 15th, and then we will follow with GFSR and the Fiscal Monitor. So Annual Meetings are the big upcoming event, week of October 14.

So finally, I am pleased to announce that today the IMF has joined the Paris-based network for greening the financial system. And this network as some of you may know is the only forum worldwide that’s bringing together central banks and supervisors committed to understanding and managing the financial risks and opportunities associated with climate change.

So this linkage between central banks, the financial sector and climate change is important. The IMF is joining that network today so another little bit of history that I can give you.

Thank you so much for your patience in listening to me and let me turn to your questions in the room.

QUESTIONER: Thanks, Gerry, good morning. Regarding Argentina, David Lipton said yesterday that the country may have to wait a while to resume the financial relationship with the IMF. Does that mean that Argentina needs to wait to elect a new government, in order to get any new disbursements from the IMF and get the current program back on track?

MR. RICE: Thank you for that. Look, there has been a lot actually going on with Argentina as you well know. So let me just summarize and put your question and the answer to your question in that context.

So again, yesterday, Kristalina Georgieva, the new Managing Director actually met with Minister Lacunza here at the IMF yesterday afternoon. I mentioned that and I think it's notable because it was her first bilateral meeting with any government, with any country so I do think that’s notable that that happened.

And I just want to read what she said, it's very short, for those who didn’t follow it. I know you did and colleagues from Argentina did but what Madame Georgieva said was, "I look forward to working with the Argentine authorities as I take up my duties on October 1. Argentina is an important member of the IMF and we want Argentina to succeed." So I think, again I think that is quite a notable statement from her yesterday, so that’s the first thing I want to say.

The second thing I want to say is that the day before yesterday, so the First Deputy Managing Director met with President Macri in New York as well as with the Minister Lacunza and Governor Sandleris and they had a discussion around the corridors of the UN General Assembly.

And at the end of that meeting, David Lipton, our first deputy managing director he issued a statement in which he characterized the meeting as constructive and he went beyond that to say that he believed the recent measures taken by the Argentine authorities have helped to calm the markets and he expressed the Fund staffs intention to continue to engage with the authorities and help them respond to the challenging times ahead. So that’s the second thing.

So there was a meeting with the new managing director, a meeting with the first deputy managing director all over the last couple of days. And then yesterday as part of this ongoing dialogue that we have with Argentina, Minister Lacunza and ministers of his team were here at the IMF for meetings with Alejandro Werner who is the Director of Western Hemisphere Department, Roberto Cardarelli, the Mission Chief for Argentina and other members of the IMF team that's working with Argentina.

And again, I would characterize those meeting yesterday as productive. They provided an opportunity to take stock of developments and talk about the broader macroeconomic framework.

So as a result of all this, where are we? So the dialogue continues now over the period ahead. We expect another team from Buenos Aires to be here in Washington on October the 14th, so that relates back to what I said earlier. That’s the beginning of the annual meetings so they will be here for the annual meetings and discussions to continue.

So all of this to say we are -- we continue to be fully engaged in the discussions with Argentina. We continue to be fully committed to helping Argentina get back onto the path of long-term stability, sustainable growth.

Maybe just turning to earlier question that, you know, number one, I think I have seen some press reports today and I want to be clear that it is incorrect to say that the IMF has in some way put the relationship with Argentina on hold. That would be -- that is incorrect. So I just want to clarify that.

And, you know, I think in terms of again, your specific question, what we have been saying and I think what David Lipton has been saying in New York is that we have been closely engaged with the authorities in this area, trying to assist them in their efforts.

You know, in light of the complex situation and the policy uncertainty, it has been difficult to find a quick path forward and, you know, I have said that here before. David has said that. But again, we remain fully engaged, trying to assist the authorities.

I don't have specific information on timing and, you know, again, responding to your question. But the discussions are ongoing, they're playing through and, you know, I think we should wait to see what the discussions bring us in the period ahead. It's been quite active and I think it will continue to be active.

Is there anything further on Argentina and then if not we can move on? Good morning.

QUESTIONER: Good morning.

MR. RICE: Nice to see you again.

QUESTIONER: You too. I just had a quick question (inaudible) Argentina. The discussions that are ongoing, can you sketch out for us perhaps using the historical cases what the range of options are and what, you know, I realize you potentially don’t want to tell us exactly what is going on in the discussions but what is, you know, what are the range of options just, you know, what could happen? What are some of the hypothetical things that are on the table?

MR. RICE: Yeah. Well, you know I don’t do hypotheticals.

QUESTIONER: I said the bad, I said the H word. (Laughter)

MR. RICE: You did. But look --

QUESTIONER: But you can talk history.

MR. RICE: In all seriousness, I think, because we are very serious in trying to support Argentina in the best way forward, we are totally committed to that.

There are as you say, there are a range of options in terms of the way forward and I think we should leave it to the participants in those discussions which are the IMF management and staff and the Argentine authorities to dialogue and work out what's the best way forward.

Our former Managing Director, Madame Lagarde also spoke in New York this week and she made the statement that at all times we have tried to do the best we can for Argentina and that will continue to be the case.

QUESTIONER: Good morning.

MR. RICE: Welcome, nice to see you here.

QUESTIONER: And so (inaudible) reimbursement is not an option. I mean, the $5.4 billion that Argentina is expecting to get from the IMF.

MR. RICE: So again I just want to repeat that discussions continue very actively. I just described it. And, you know, we remain fully engaged and fully committed to helping Argentina in the best way possible. And the best way possible as I just said is going to be the outcome of the discussions that are ongoing between the Argentine authorities and the IMF. So they are ongoing so let them play out and we will see where we are at that point.

Are we all on Argentina? Lots on Argentina. Oh my goodness. Let me take, so there is three more on Argentina and I'll take them and then I think I'm going to move on from Argentina.

QUESTIONER: So my question is if there will be any condition like Argentina has to make the first reimbursement before IMF could release the next tranche for instance.

MR. RICE: Okay. Let me take that one. And good morning.

QUESTIONER: (inaudible) Argentina isn’t there a chance the IMF engages in a discussion not only with an actual government but with a president elect or even candidate. Is there any previous experience of this kind for the IMF?

MR. RICE: Okay so let me take those questions. On the question about the conditions for, you know, the next steps in our engagement with Argentina. Again, I'm not going to try and get into the details of that,= with what the discussions might entail. The elements of the program we've talked about many, many times and, you know, they're on the record. So, there's no surprises in that. So, I won't get into questions of conditions or specifics there.

On the question about working -- how we're working in Argentina. Of course, as in all countries, our engagement is with the government and with the authorities. This is their program and we've been working to support their program. That said, in Argentina and again, this is the case in many other countries as well, we often talk to a wide range of stakeholders. And in Argentina, that has been the case.

We have during our staff missions, I think I talked about this the last time I was here, is I think it's accurate to say there were discussions with the opposition party in Argentina. And, you know, even beyond that, I think in those discussions there was a signaling of a strong support in Argentina across the political spectrum to adopt policies that will pave the way for greater stability and growth.

The focus and priorities, of course, may vary but again, we have observed considerable support for policies that will lead to greater stability and growth. And, you know, on the issue of debt sustainability, of course, that's something that will be part of the discussions that are ongoing so I would not seek to preempt that.

Are we okay on Argentina? Okay, thank you very much for all those questions. Are there questions on any other country other than Argentina? I know I got a few online but I want to stay in the room if there's anything else.

QUESTIONER: (Inaudible). Is the continuity of Christine Lagarde, I mean, will she continue this line of at least talking about social situations of countries or focusing on that? Because we saw the profile, for example, in Instagram and you see that she's in very poor countries.

MR. RICE: That's a good question, thank you. Look, Madame Georgieva made a number of statements yesterday. But I would point you to the press release that we issued her statement. And actually, within that press release there's a link, there's a hyperlink to a longer statement that she made to the Executive Directors here at the Fund just on Tuesday. And it's a very -- it's a succinct statement but it's a very strong statement. But amongst other things, you'll find there a very strong commitment to, of course, prudent and sensible macroeconomic policies which the IMF is always looking to support.

However, on your point, you will also find there a very strong commitment to issues of inequality and gender equity, social protection, climate change. That set of issues that, of course, are also very important to the economic health of our membership. So, I think the answer to your question is yes, that I think you can expect a strong continuation of the work we've been doing here under Madame Georgieva's new leadership.

QUESTIONER: I just wanted to (inaudible) flashing warnings, the warnings are flashing. That sounds pretty urgent and pretty dire. We've had new economic data, you know, since we last spoke. Can you say anything more about the growth outlook for the world economy and I realize you'll be giving us numbers shortly. But can you say anything more to sort of lay the groundwork or prepare us for what will be coming.

MR. RICE: You know, I don't have much to add beyond what you and I discussed actually two weeks ago on this issue. There have been some statements in between from, you know, various IMF representatives. I would, yes, I would point you to that statement that you just mentioned that our incoming Managing Director made yesterday.

Indeed, she did speak of flashing warning signs and in terms of the economic outlook and she did speak of the need for preparedness, the need to be ready. I think you can expect to hear more in that vein when she makes this curtain raiser speech in about a weeks' time or so. And you will hear even more with greater granularity numbers and forecasts when the World Economic Outlook led by Gita Gopinath, our Chief Economist, will be released shortly thereafter. So, I think your questions will be fully answered in a very detailed way at that time.

QUESTIONER: So, but we should -- markets should prepare for a downward revision in the IMF global economic forecast.

MR. RICE: Well again, the way I point to what she said which was that we should look at some of these signals that are flashing in the global outlook. Because there's a combination of factors ranging from trade to trade tensions, geopolitical tensions, Brexit. We're all familiar with what the issues are but the signs are, the warning signs she said are flashing. And, you know, of course, we should always be prepared and that's the work the IMF does. We try to help the membership be as prepared as possible.

I'm going to take three questions online. One is from Matthew Lee in New York and Matthew is pulling himself away from the UN General Assembly to ask about Sri Lanka amongst other things. And he's asking, there are concerns at the significant rise in the value added tax. Given that the brunt of such taxes is often borne by the poorest, what's the IMF's response?

And my response is just to, you know, remind people that on September 25, yesterday, the IMF staff team actually reached agreement with the Sri Lankan authorities. That we call that staff level agreement on the sixth review of the program that we're supporting in Sri Lanka. And I'll probably just refer to that statement.

We welcome the authority's commitment to provide fiscal support for the ongoing recovery from those tragic terrorist's attacks that took place in April. And to answer Matthew's question, other social goals to protect the most vulnerable while, of course, reducing Sri Lanka's high public debt.

There is a question on Turkey. It's also from Matthew asking what is the IMF's response to the ruling AKP deputy chair criticizing a meeting between the IMF and opposition parties, saying Turkey has closed the topic with the IMF. Just a bit of the context there is that we had a routine IMF mission, surveillance mission, visiting Turkey over the last couple of weeks. Finished up on the 23rd of September, actually.

And that, as I said, was routine. It was for our annual Article 4 consultation. And it actually relates back to something I said earlier that in line with usual practice, the mission met with a range of stakeholders, first and foremost the Turkish authorities. But also represents the private sector, political parties, academia, think tanks because, you know, we need to have a wide range of views. And, you know, that was the context for the meeting that is referenced in the question.

And at the end of the visit, the team issued a concluding statement which I will point you to. Perhaps just to underline the fact that I've made here several times before and just to emphasize it that we have received no indication from the Turkish authorities of contemplation of a request for IMF financial assistance. No program requests for Turkey, just want to emphasize that.

Finally, on Mexico, there's a question about will Mexico renew its flexible credit line by the end of October. As you may know, we have a flexible credit line program arrangement with Mexico. It was on the order of about $86 billion, 86 billion. And what I can say is that expires at the end of November this year. And I can also say the Mexican authorities have indeed expressed interest in a successor arrangement prior to the expiration of this FCL at the end of November.

No discussion about the level or the size of the access under that flexible credit line. But I'm confirming that the Mexican government has indeed expressed interest in a successor arrangement on the FCL. You get the last question.

QUESTIONER: Thank you, good morning. I would like to go back to Argentina if that's okay.

MR. RICE: Okay.

QUESTIONER: Given that, you know, I didn't ask the first round. Is there a specific date by when the IMF would be late if it doesn't make the disbursement before a specific date? Are there a lot of precedents for this kind of situation or are we making history as we made history yesterday? Is this unprecedented if it happens. I mean, if we reach a specific date and the disbursement has not been made when will that day be and how frequent is it? Thank you.

MR. RICE: You know, I don't have a firm date or deadline for you today. The IMF is known for its flexibility, its adaptability so the discussions are taking place as I said and I wouldn't want to preempt them by suggesting a date or a deadline for that. You know, perhaps just to say that in terms of the disbursement itself, I think it's Minister Lacunza and others have said that the disbursement is not an immediate necessity. I think, you know, Minister Lacunza has said that.

But again, we will move in the discussions as fast as we can and try to do the best we can for Argentina in every respect. Those discussions are now ongoing and we'll keep you posted as they continue in the period ahead.

QUESTIONER: (off mic).

MR. RICE: The discussions?

QUESTIONER: No, no, no, the (inaudible).

MR. RICE: No, it's not unusual, it's not unusual in our programs to have a delay in the disbursement, no. That happens, well, let me leave it there, it's not uncommon, no. Okay look, thanks very much. Great to see you today and I look forward to seeing you at the curtain raiser next week hopefully and then during the Annual Meetings. Lots going on. Thanks very much.

IMF Communications Department


Phone: +1 202 623-7100Email: