Transcript of IMF Press Briefing

IMF News, December 12, 2019

Source details

New global debt database will be available on the IMF's website on Tuesday, December 17.
IMF released an IMF staff paper on recent economic developments and prospects for low-income developing countries. Low-income developing countries represent 59 countries of the IMF's membership and about 1.5 billion people.
Managing Director Kristalina Georgieva travel and public engagements:
- Visits to Italy, France, Switzerland in the next 10 days (including a G7 labor ministers meeting and a meeting with the WTO director general in Geneva).
- Speech at the Peterson Institute in Washington on January 17 on new IMF staff research on the financial services sector and its impact on income inequality.
- Attendance in Davos where the IMF will release a World Economic Outlook (WEO) update alongside Gita Gopinath.

IMF staff reached a staff-level agreement with Ukrainian authorities on policies to underpin a new three year arrangement under the IMF's extended fund facility in the amount of about $5.5 billion.
Key conditionalities and priorities:
- Strengthen the rule of law.
- Enhance the integrity of the judiciary.
- Reduce the role of vested interests in the economy.
- Safeguard gains in cleaning up the banking system and recovering costs to taxpayers from bank resolutions.
Status and risks:
- The agreement is staff-level and subject to discussion and approval by the IMF Executive Board.
- Effectiveness of the program will depend on implementation of a set of prior actions.
- Executive Board approval is expected in the period ahead (Board meeting timing: early next year contingent on prior actions).

Recent interactions:
- Multiple recent exchanges between IMF senior staff and incoming Argentine authorities, including meetings involving the Managing Director, Alejandro Werner (Western Hemisphere Director), and discussions with Finance Minister Martín Guzmán and Guillermo Nielsen.
- Managing Director congratulated President Fernández and emphasized shared objectives of reducing poverty and fostering sustainable growth.
Policy stance and sequencing:
- IMF supports Fernández administration's plans to bolster social protection given increases in poverty.
- IMF stands ready to engage further if the Argentine authorities desire.
- The IMF emphasizes sequencing: IMF will first seek detailed policy plans from the new government before conducting debt sustainability analysis or discussing fiscal specifics.
Debt treatment and IMF role:
- Decisions on debt restructuring are the purview of the member country.
- For IMF exceptional access programs, the IMF assesses whether debt is sustainable with high probability.
- Any debt sustainability analysis requires information on authorities' policy plans and macroeconomic outlook consistent with those plans.
Status of the existing program:
- The existing program "remains" while discussions continue; future steps (modifications or adjustments) will depend on the new government's detailed priorities and plans.
Board meetings and timing:
- No awareness of any IMF Executive Board meeting on Argentina before year end.

IMF position:
- Encourages and would welcome progress toward deescalation of trade tensions and a comprehensive, lasting agreement (phrase used by the Managing Director: move from "trade truce to trade peace").
Quantified impact of tariffs implemented and announced:
- Estimated impact on global growth in 2020: 0.8 percent.
- Estimated dollar impact: about $700 billion.
- Impact composed of:
- Direct economic impact of tariffs (quantified).
- Larger impact from policy uncertainty affecting trade and the global economy (disaggregated in IMF analysis).
Near-term milestone referenced: October the 15th (some planned tariffs may take effect or not take effect).

IMF response to civil society concerns:
- IMF works with member countries despite difficult circumstances and pays close attention to governance, corruption, and transparency in programs.
- Governance and anti-corruption elements will be a very important part of any program discussed with the IMF Executive Board.
Government commitment:
- Government of Equatorial Guinea has committed to adopt and implement a national strategy to improve governance and fight corruption.
Status:
- Any program remains to be discussed and approved by the IMF Executive Board.

International support group led by France and the UN met to consider measures to help Lebanon.
IMF stance:
- Supports the urgent formation of a new government to implement a comprehensive and credible plan to restore economic stability.
- IMF is open to supporting Lebanese authorities with technical advice as desired by Lebanon.

IMF actions:
- Working with members to secure financial resources necessary to clear Somalia's arrears to the IMF and to cover the costs of debt relief.
IMF Executive Board:
- The Board will meet on December 18th to agree on how to finance the Fund's contribution to debt relief for Somalia.

Program size: $6 billion program to support Pakistan's economic reforms.
Recent mission:
- IMF mission in November produced a preliminary assessment indicating the program is on track.
- IMF staff reached a staff-level agreement on the first review.
Executive Board:
- The IMF Board will meet to discuss the first review on Thursday, December 19th.
- Staff assessment: all prior actions and performance criteria under the program with Pakistan have been met and financing assurances needed for the program to go forward are in place.

IMF staff position:
- Firmly supports maintaining strong monetary accommodation until the ECB's medium term inflation objective is met.

Current characterization:
- The global economy is in a "synchronized slowdown."
- Countries representing 90 percent of global GDP are in a slowdown.
- The global economy is growing, but more slowly.
Forecast update:
- Fresh numbers and a fresh forecast will be released in about a months' time with the WEO update.

Transcript of IMF Press Briefing — December 12, 2019. IMF Communications Department.