Transcript of IMF Press Briefing
IMF News, February 13, 2020
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- Published: February 13, 2020
Managing Director travel and engagements
- Briefing date: February 13, 2020.
- Embargo: briefing embargoed until 10:30 a.m. Washington time.
- Upcoming engagements:
- February 14: Munich Security Conference (session on the global trading system; some sessions live/open to the press).
- A few days after February 14: Travel to Dubai to attend the second global women's forum (some events public and live webcast).
- February 17 to 20: Visit to Morocco to discuss preparations for the IMF, World Bank Annual Meetings to be held in Marrakech in October 2021 (first visit to Morocco; meetings with head of government, central bank governor, finance minister, civil society, students, and participation in a roundtable on governance).
- February 21 to 23: G-20 meeting of finance ministers and central bank governors in Riyadh, Saudi Arabia (Managing Director to have a public, televised conversation with Tim Adams on the sidelines).
- Press contact: Lucie Mboto Fouda; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson.
Lebanon: request and IMF response
- On February 12, Lebanese authorities requested technical assistance from the IMF to help address economic challenges.
- Key clarifications:
- The Lebanese authorities have not requested financial assistance; the request is for technical assistance and advice.
- IMF view: a package of economic and structural reforms is needed to address sharp deterioration in confidence, restore stability in financing, trading and payment systems, contain inflation, and resume economic growth.
- Longstanding structural problems in many sectors need addressing; reforms would improve conditions especially for the poor and the middle class.
- Debt restructuring decisions are the prerogative of the government and its legal and financial advisors; IMF does not play a role in those negotiations.
Argentina: dialogue, program review, and IMF stance
- Active IMF staff mission in Buenos Aires from February 12 to 19 to discuss Argentina’s plans, debt strategy, and economic outlook.
- Mission leadership: Julie Kozack (Deputy Director, Western Hemisphere Department) and Luis Cubeddu (head of IMF mission for Argentina).
- IMF position and clarifications:
- IMF shares Argentina’s objective of stabilizing the economy, protecting vulnerable groups, and paving the way for sustainable, inclusive growth.
- IMF assures there was no violation of IMF rules in the prior engagement.
- The IMF’s capacity to restructure its own debt or postpone repayments is constrained by its legal and policy frameworks.
- Context:
- Argentine Minister of Economy Martin Guzmán stated Argentina would not achieve a fiscal surplus until 2023 (question referenced; IMF response focused on constructive dialogue rather than endorsing specific dates).
Ukraine: program conditions and priorities
- IMF program agreed with Ukraine last December for $5.5 billion; agreement subject to Board approval and implementation of a set of prior actions.
- Main focus areas under discussion:
- Strengthening the rule of law and tackling corruption.
- Enhancing competition, opening up markets, reducing the role of the state and oligarchs.
- Continuing prudent fiscal policies to ensure medium term sustainability.
- Ensuring central bank independence and financial stability.
- Status: discussions are active and constructive; no Board decision date provided.
Coronavirus (2019-nCoV) — economic uncertainty and scenarios
- Managing Director emphasized high uncertainty; IMF prefers scenario analysis over firm projections at this stage.
- Scenarios discussed:
- V-shaped recovery scenario: sudden but brief interruption of economic activity followed by a sharp rebound driven by pent-up demand (desired scenario; referenced similarity to the SARS outbreak recovery).
- Larger-impact scenarios depending on timing, breadth, and containment of the virus.
- Geographic and sectoral impact notes:
- Immediate impact expected most in China; given China’s economic footprint, other countries—especially neighboring countries in Asia—would be affected.
- Supply chain effects are possible under more negative scenarios, but definitive assessment pending more data.
- Data and timing:
- Managing Director expected to have firmer data to release at the G-20 meeting in Riyadh (timing noted as “the weekend after next” from the briefing date).
- Comparison to SARS: SARS occurred in 2003, 2004; caution that China and the global economy are different today.
- China’s share in PPP measures cited as “about 19 percent” in the briefing.
- IMF stance:
- Strong support for China’s containment and mitigation efforts, including health measures and recent fiscal, monetary, and financial actions.
- IMF stands ready to help and is monitoring the situation daily.
Other country engagements and assessments
- India:
- IMF view: given a weaker economic environment, a more accommodative fiscal stance in the budget this year is appropriate.
- Need remains for more ambitious structural and financial sector reforms and a medium-term fiscal consolidation strategy anchored in tangible revenue and expenditure measures, especially given rising debt levels.
- Somalia:
- IMF Board met to discuss preliminary assessment of Somalia’s eligibility for debt relief under the Highly Indebted Poor Country (HIPC) Initiative; World Bank Board discussing on the following day.
- Financing plan involves mobilizing resources from IMF internal funds and member contributions; mechanism includes distributing funds to members and asking voluntary returns to cover IMF’s share of debt relief (mechanism used previously, e.g., Liberia).
- Current stage is the step before the HIPC “decision point”; decision point timing not set as financing is still being lined up.
- Egypt:
- Previous IMF financial program effective in stabilizing the economy: growth restored, inflation declined to single digits, fiscal and current account deficits reduced.
- IMF view: Egypt needs a new wave of reforms to support private sector development and job creation; IMF engagement type to be discussed (no financing program in place; prior program ended in November).
- Article IV consultation planned later in the year.
- Pakistan:
- Ongoing IMF mission conducting the second review under the IMF financing program; combined mission also undertaking the Article IV consultation. Discussions ongoing; outcomes to be reported when mission concludes.
Procedural and operational notes
- The briefing team characterized ongoing country dialogues as “active” and “constructive” for Argentina, Ukraine, and other missions.
- IMF staff missions were highlighted as the vehicle for program reviews, debt sustainability discussions, and Article IV consultations (Argentina mission: February 12–19; Ukraine program agreed last December for $5.5 billion).
Transcript of IMF Press Briefing, February 13, 2020.