Exceptional Times, Exceptional Action: Opening Remarks for Spring Meetings Press Conference
IMF News, April 15, 2020
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- Published: April 15, 2020
Introduction and Outlook
- Opening context: virtual 2020 Spring Meetings; personal wishes for health and safety; gratitude to doctors, nurses, and front-line workers.
- Quotation: “April is the cruelest month.”
- Crisis characterization:
- Covid-19 is causing tragic loss of life and measures to fight it have turned the world upside down—affecting billions of people and stopping economies in their tracks.
- “This is a crisis like no other.”
- Baseline global growth projection:
- “we project global growth to fall to-3 percent this year.”
- “we project a partial recovery in 2021, with growth expected at 5.8 per cent.”
- Uncertainty statement:
- “We know that it could get much worse depending on many variable factors, including the depth and duration of the pandemic.”
- Emphasis that a path forward can be charted despite extraordinary uncertainty.
Policy Recommendations
- Framework: Global Policy Agenda titled ‘Exceptional Times—Exceptional Action.’
- Three priorities highlighted:
- (1) First—protect lives.
- Continue essential containment measures and prioritize health spending.
- Refrain from export controls on medical supplies and food.
- Rationale: “you cannot have a healthy economy without a healthy population.”
- (2) Second—protect livelihoods.
- Prevent liquidity pressures from turning into solvency problems.
- Create lifelines for households and businesses: cash transfers, credit guarantees, and adjustments to loan terms.
- Maintain a functioning financial system; monetary stimulus and liquidity facilities play an indispensable role.
- (3) Third—plan for recovery.
- Reduce the risk of irreversible economic scarring through policy action now.
- As the global economy stabilizes, coordinated fiscal stimulus will be needed to boost demand and restore growth.
- IMF support will address post-crisis challenges including “debt vulnerabilities, bankruptcies, unemployment, and economic inequality.”
- Support for vulnerable countries:
- Many emerging markets and low-income nations have weaker health systems, are facing “record-high portfolio outflows—more than $100 billion in just the past two months,” and can cover only a portion of their external financing needs, “which are estimated to be in the trillions of dollars; and some may face an unsustainable debt burden.”
- International community must provide increased funding and debt service relief to create space for urgent health spending and mitigate economic impact.
- Global solidarity, common resolve, and coordinated international efforts are urged: “anyone’s fight against the virus is everyone’s fight.”
The Role of the IMF
- Operational posture: “working around the clock—it’s all-hands-on-deck” to support 189 member countries with policy advice, technical assistance, and financial resources.
- Capacity and actions:
- “We have $1 trillion in lending capacity, which we are placing at the service of our membership.”
- Responding to “an unprecedented number of calls for emergency financing—from more than 100 countries.”
- “We have just doubled access to our emergency facilities, which will allow us to meet the expected demand of about $100 billion in financing.”
- “Lending programs have already been approved at record speed for over 20 countries, with many more to come.”
- Executive Board action: “Today our Executive Board will be discussing a new short-term liquidity line—for countries with strong economic fundamentals.”
- Membership exploring additional tools, “including how to best use the SDR.”
- Support for low-income countries:
- Revamped Catastrophe Containment and Relief Trust (CCRT) to provide immediate debt relief on IMF obligations to low-income countries affected by the crisis.
- “Our Executive Board has just approved assistance to 25 countries.”
- Working with donors to almost triple the CCRT from $500 million to $1.4 billion to extend the duration of relief.
- Coordination with the G20 and the World Bank calling for a standstill of debt service to official bilateral creditors for the world’s poorest countries.
- Governance next steps:
- “When Governors of the IMFC meet tomorrow, I will be seeking their endorsement for this concrete package of measures that can be deployed quickly.”
Key Statistics and Figures
- Global growth projections:
- fall to-3 percent (current year baseline)
- recovery at 5.8 per cent (2021 baseline)
- Financial and operational figures:
- $8 trillion in fiscal actions deployed by many countries (aggregate)
- over $6 trillion in liquidity injections by central banks
- record-high portfolio outflows—more than $100 billion in just the past two months
- external financing needs “estimated to be in the trillions of dollars”
- IMF lending capacity: $1 trillion
- emergency financing demand expected: about $100 billion
- emergency lending programs approved for over 20 countries
- IMF membership: 189 member countries
- calls for emergency financing from more than 100 countries
- CCRT target increase: from $500 million to $1.4 billion
- CCRT assistance approved to 25 countries
Closing
- Message of resilience and action:
- “In this time of crisis, we must remember that this too shall pass. We will get through this.”
- “How well and quickly we get through it depends on us acting now—and acting together.”
- “These are exceptional times; we need exceptional action.”
As prepared for delivery — Opening Remarks for Spring Meetings Press Conference, April 15, 2020