Transcript of IMF Press Briefing

November 7, 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.

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

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

So, today and tomorrow the IMF will host our Annual Research Conference, and the topic of this year's conference is Debt, the good, the bad and the ugly, and speakers include our Managing Director, Kristalina Georgieva; our Chief Economist, Gita Gopinath; and some other very illustrious economists including Olivier Blanchard, Jeremy Stein, Ken Rogoff, and others. So, that's today.

And tomorrow, at the IMF, our Annual Economic Research Conference, for those of you who are following those issues.

Then next week there will be another conference, it's actually our statistical forum, and the topic of that, again, fairly topical is the measurement of the informal economy, and again, we will have opening remarks from Kristalina Georgieva, and we can get you more information on that if you're interested. That's November 14 and 15.

Then on November 19th, the Managing Director will be in Berlin to participate with Chancellor Merkel, and others, on the Compact with Africa, which as you know is a G20-realted initiative that seeks to drive business and the business environment and increased private sector investment in Africa. November 19th, in Berlin.

And after Berlin, Kristalina Georgieva will be moving on to China for the so-called OnePlus 6 Meeting, that's the meeting of -- the annual meeting of the Chinese authorities with the six heads of other international, major international financial institutions.

And after China she will move on to Japan for the conclusion of the Article IV Consultation with Japan, and a meeting Prime Minister Abe, and others.

We'll get you more information on Berlin, China and Japan at a later date.

And finally, let me mention that our Deputy Managing Director, Tao Zhang, on November 18 will be in Kosovo to mark the 20th Anniversary of the Central Bank of Republic of Kosovo.

So, thank you for your patience on those announcements. Let me come to your questions in the room.

Good morning, and welcome.

QUESTIONER: Good morning, Mr. Rice. Thanks so much for having me. I'd like to ask you a question on the news of this morning. The Chinese are floating the idea that both sides are looking at rolling back tariffs, if there is a phase one deal.

Now the U.S. has acknowledged not implementing tariffs (inaudible) from the December they haven't talked about necessarily rolling back already-implemented tariffs. But the IMF downgraded its global outlook in part because of this. Does this change the IMF's global outlook if this were to go into effect?

MR. RICE: Thank you. I mean a couple of things. I'd say first of all we have to wait until there is the actual agreement between the U.S. and China before we make an assessment. But, as we've said here many times before, we welcome any step to de-escalate the trade tensions, and to roll back recent trade measures which you just mentioned, and particularly if they can provide a path towards a comprehensive and lasting agreement.

You asked about the effect that that might have on the outlook and the forecast. And given the uncertainty about the content and durability of a possible agreement for now, again, without making a firm assessment, we see it as holding potential to, you know, improve our baseline forecast.

But again, we need to wait for the details. For those of you who haven't followed it, our most World Economic Outlook estimated that the tariffs implemented and announced during 2018 and 2019 would likely reduce the level of global GDP by 0.8 percent by 2020. That was that US$700 billion number that the Managing Director and others referred to.

So, again, you know, just to sum up, we have to wait, I think for the final agreement, and for the details, but we welcome anything, any step that would help to de-escalate the trade tensions and, indeed, contingent on the agreement, there is an upside potential there to the baseline forecast.

QUESTIONER: I have a question about Argentina. I was wondering if you're planning any mission there, or is there any meetings scheduled here in Washington, D.C. And could you give us a sense of where we are with the Argentina issue?

MR. RICE: Sure. Thank you. So where are we on Argentina? The Managing Director, Kristalina Georgieva, congratulated President Elect Fernández on his election, and reiterated the Fund's readiness to engage with Mr. Fernández and his administration to help Argentina address the important challenges facing the economy there, and to pave the way for inclusive and sustainable growth.

So, there was that message from the Managing Director, as the first thing I would say. The second thing is that we stand ready with President-Elect Fernández and his team at their convenience during the transition period. I don’t have any dates for missions planned at this stage. Again, it will depend on the discussions going forward. And again, we stand ready to engage, that's kind of where we are.

QUSTIONER: Thanks, Gerry. Just a quick follow up on that. Has Argentina given you any indication or have they made a formal request for modification of the program? Is that sort of what you're waiting for to begin this engagement?

MR. RICE: You know, we're just ready to engage. We're ready to discuss at any time, again, at the convenience at the new administration in Argentina. And, you know, that's not contingent on any, you know, prior conditions. We're just ready to engage whenever is convenient for them to do so.

QUSTIONER: Yes, thanks Gerry. To follow up on these questions, there's going to be an event in Miami where Alejandro Werner is going to be one of the speakers and also Mr. Nielsen which is a member of Alberto Fernández's team. Wanted to know if there was any meeting scheduled between the two of them in Miami.

MR. RICE: Well, I have the same understanding that you do that Alejandro Werner and Mr. Nielsen are both participating in this conference organized by the University of Miami tomorrow. I'm not aware of any planned meeting but they're both going to be there and often on these occasions, there are meetings on the sidelines of these events. So again, no planned meeting but we'll see what happens tomorrow.

QUSTIONER: There's a lot of debate about Argentina's upcoming negotiations with both the IMF and the bond holders. I wanted to ask if you have, the IMF's staff has any position regarding of which negotiations should come first. If Argentina's new government should negotiate first with the bond holders or with the IMF and do the bond holder negotiation under the IMF program.

MR. RICE: So, again we stand ready to engage straight away and regardless as I said earlier. On the issue of potential debt negotiations and discussions, I mean, a couple of things. Alejandro Werner talked about this during the recent Annual Meetings. But, you know, as is the case with all countries, so not just Argentina but all countries, the decision to restructure debt is entirely the purview of the member country and in consultation with their legal and financial advisors.

Our role, the IMF's role, is to assess whether debt is sustainable with a high probability in line with our exceptional access policy. So, in order to conduct our debt sustainability, we need the analysis, we need the information on the authority's policy plans as well as take a look at the macroeconomic outlook consistent with those plans. So, I mean, trying to answer your question, we are not in a position to make that assessment right now because the discussions with the new administration have not yet taken place. But again, you know, the role, the responsibility for the debt restructuring lies with the member country and our role is to assess the debt sustainability. Just very clear responsibilities there.

QUSTIONER: One more on Argentina. The new government, the elected government in Argentina said that in a conversation with President Trump, President Trump said that he has instructed the IMF to work with Argentina. Can you specify what does he mean by that and has there been any conversation between MD Georgieva and President Trump regarding this?

MR. RICE: So, just on your last part I'm not aware of any discussion between the President and Kristalina Georgieva. But, you know, what I would say is that we work with all our member countries and I would really just point to the statement that Kristalina Georgieva made which I referred to at the beginning of the press conference that we stand ready to work with President-Elect Fernández and his administration. And, you know, to help Argentina overcome the challenges and get back on the path of sustainable and inclusive growth. That commitment from the Fund to Argentina has been there and that commitment to Argentina continues to be there today.

QUSTIONER: Last night, Georgieva referred to Argentina, she said she was willing to discuss with Argentina (inaudible) commitment as soon as the IMF could foresee what kind of policies would the new government apply in Argentina. Do you have by now does the IMF have by now a certain idea about what kind of policies, economic policies would the new government display in order to start a conversation?

MR. RICE: Well, you know, I wouldn’t want to again, preempt any discussions that might take place with the new administration and, of course, first to hear their thoughts on the policy path. But perhaps, you know, just to note that during his election night speech and subsequent public pronouncements, President Elect Fernández stated that he is looking to lift Argentina's economy out of the current crisis and pave the way for more solid and inclusive growth. And we fully share those objectives is what I would say on that.

And again, our commitment to help Argentina get onto this better path of sustainable and inclusive growth and we are ready to engage on that as convenient with the new administration.

QUESTIONER: Mr. Fernandez has also talked about restructuring, reprofiling the debt without any removal of the debt, any (speaking Spanish) in Spanish terms. (Speaking Spanish).

And in Argentina, some people have said that the IMF would not recommend that kind of approach in restructuring of the debt. What is, is it true the IMF thinks that there should be a removal of debt in Argentinian negotiations with private creators?

MR. RICE: Yeah, you know, again I wouldn't want to preempt any discussions that might take place on that or other issues. I think those of you who follow the IMF know that from, you know, discussions in other countries, the capacity of the IMF itself to restructure its debt is constrained by its legal and policy frameworks. I'm talking about the IMF debt. So that’s clear and that's true, not again, not just in the case of Argentina, that’s just the case for all member countries.

And responding to the previous question, I tried to delineate the different responsibilities of, the government has the role, the -- in the decision to restructure debt and we have the role of assessing whether the debt is sustainable.

And again, I think all of this has to wait for the engagement to take place between the Fund and the new administration and we will be carrying forward the discussions after that.

QUESTIONER: The, there was an interview by Alberto Fernández --

MR. RICE: I'm sorry, say again, Jeff. Could you speak into the mic?

QUESTIONER: There was an interview on television last night with Alberto Fernández and he said that the IMF prohibits debt haircuts and hopes the IMF will help Argentina pay down its debt.

So the IMF -- does the IMF prohibit debt haircuts and would it help Argentina pay its debt and I'm just asking in a little bit of a different question. Thanks.

MR. RICE: Yeah. Again, Jeff, you know, I think that’s pretty much along the lines of the previous question. I wouldn't want to get ahead of any discussions that might take place and I have explained the IMF position on its debt, on our debt, and that’s just a long-standing policy for the IMF.

But the discussions on any potential haircut, debt restructuring, that’s really for the government to carry forward and more broadly we remain committed to helping Argentina in any way we can and we stand ready to engage as soon as it's convenient for the new administration.

QUESTIONER: On Ukraine. Recently the central bank governors say that he was hoping to get a new credit from IMF by the end of the year so meaning shortly. Could you update the situation with Ukraine, where we are and if there is any -- something we can expect in the few coming weeks?

MR. RICE: Yeah, let me update you a little bit. So there was an IMF staff mission to Kiev that ended toward the end of September that was for the 2019 Article IV consultation. The mission also started discussions on a new three-year financial arrangement with the Fund that could be supported by our extended Fund facility.

So following this year's elections, the authorities now have an opportunity to advance the much needed reforms and they have set themselves some fairly ambitious targets of transforming the economy.

And as I indicated they have requested a new IMF supported program to help them in this effort. And the discussions on that newer program just to answer your question, they are ongoing.

I can tell you there has been progress made in discussing fiscal and monetary policies and key reform measures, safeguarding central bank independence and financial stability and making every effort to minimize the fiscal cost of bank resolutions are of critical importance as well as strengthening the rule of law and tackling corruption.

And, as I said, the discussions are ongoing. It's not unusual as I think you know that it takes time to agree on the package of policies that could be supported by the IMF program. We certainly are supportive of the broad objective of faster, more sustainable, inclusive growth to improve living standards for the people of Ukraine to attract much need investment.

We think that Ukraine needs to advance some structural reforms. Again notably to improve governance and tackle corruption and to reduce the role of the state and oligarchs while continuing as I said to assign fiscal and monetary policies to maintain macro stability. Let me take some questions online. I'll come back in to the room just if there's anything else. There are a few things online that I will take. There were some questions on Ukraine actually, but I think we've covered that.

There's a question on Sudan from Matthew Lee asking if we can provide a comment on the finance minister saying, Sudan has agreed to roadmap to rehabilitate the country with the IMF adding that the plan involved structural reforms and that is part of the deal. Sudan would not have to pay its lenders debt arrears. Is that true? So, we are in discussion with the Sudan authorities on how the IMF can help with their reform efforts and to acquire adequate donor assistance. Sudan remains eligible for debt relief when it meets all the requirements, including receiving financing assurances from creditors for debt relief, establishing a track record of performance and clearing arrears to the IMF.

So, while we can help Sudan build the track record of performance, progress on those other points I just mentioned will depend on support from creditor countries. So, at this stage it's not possible to provide a firm timeline for the fulfillment of those steps. Let me add that exiting from the U.S. state sponsor of terrorism list would be important for facilitating creditor consensus on debt relief.

There's another question from Matthew, which I'll take on Equatorial Guinea, asking what's the status and the volume of the IMF's consideration of a program for Equatorial Guinea and the weighing, if at all, length of time that President Obiang has been in power. On that, I can say that just recently on October 21st, the Equatorial Guinea authorities and an IMF team reached staff level agreement on a three-year arrangement. Again, under the extended Fund facility, which is the more concessional arm of the IMF's lending. The authorities are working on an agreed set of measures that could allow the new program to be considered by the IMF's Executive Board in December. And Matthew had asked about the volume. We're looking at the program that could be supported by approximately $280 million. So, that's four Equatorial Guinea.

And anything else in the room?

QUESTIONNER: Yeah, I just wanted to see if you have any clarity on what's going on in the Lebanon. If you've been in touch -- if the IMF has been in touch with the government there, since the prime minister tendered his resignation last week; whether there's any, any sense that they will seek IMF funding.

MR. RICE: On Lebanon, David, what I can tell you is that we concluded the Article IV consultation with the Board discussion in September. And, of course, there have been developments since then, which you're alluding to. We've continued to have some technical discussion with our counterparts in Lebanon mainly to get a better understanding of the situation again, given the developments there. We have not yet had a discussion on policies and the authorities have not asked and we are not engaged in any discussion of a program. So, just to be clear on that last point, so discussions are ongoing, but no program request from the authorities there.

Okay. I want to thank you all for coming along today and for your patience and we will see you in two weeks time. And again, I hope you can tune in, or maybe even look in on the Annual Research Conference, which is taking place in another part of the building right now. Thanks everybody.

* * * * *

IMF Communications Department


Phone: +1 202 623-7100Email: