Transcript of IMF Press Briefing
IMF News, July 23, 2020
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- Published: July 23, 2020
Global outlook and IMF stance
- Managing Director Kristalina Georgieva: "due to the continuing impact of COVID-19, the global economy faces a deep recession this year with partial and uneven recovery expected in 2021."
- Policy prescriptions emphasized:
- Support of fiscal and monetary policies will need to continue as needed until a "safe and durable exit from the crisis."
- Premature withdrawal of fiscal support could derail the recovery and incur larger costs.
- Increased international cooperation required, including on debt issues and debt transparency.
- Debt Service Suspension Initiative (DSSI):
- Highlighted importance for countries with high debt or dependence on hard-hit sectors such as tourism.
- So far, 41 countries have made formal requests under the Debt Suspension Initiative (out of a potentially 73 eligible countries).
- Need for greater private sector participation and greater debt transparency to make the initiative more effective.
IMF financial support and instruments (scope and scale)
- Emergency financing provided to 72 countries in just under four months totaling $25 billion (emergency financing without traditional IMF conditionality).
- Immediate debt relief provided to all 29 poorest IMF member countries eligible under the Catastrophe Containment and Relief Trust (CCRT), totaling about $251 million in debt relief provided directly by the IMF so far.
- Concessional credit to low income countries expected to triple as a result of the crisis and IMF mitigation efforts.
- IMF available resources and exposure:
- "The Fund has about a trillion dollars available to help our membership."
- "Total exposure at this point of about $250 billion and around one third of that has been approved since the crisis began."
- Executive Board decision: temporary increase in annual access limits to financial support from the IMF to allow countries that have already received emergency funds to receive higher levels of financing within the current year.
Country-level summaries and forecasts
- Spain:
- IMF applauds EU agreement on a €750 billion recovery package as "an important contribution" to support Spain's recovery and medium- to longer-term transition.
- IMF World Economic Outlook forecast (published about a month before the briefing): contraction of 12.8 percent in 2020 and recovery of 6.3 percent in 2021 for Spain.
- Forecast already accounts for possible localized outbreaks and targeted limitations; outlook to be updated in October.
- Nigeria:
- Approved $3.4 billion under the Rapid Financing Instrument (RFI), approved towards the end of April.
- Accountability measures committed by Nigerian authorities:
- Conduct an independent audit of crisis mitigation spending and related procurement processes.
- Publish procurement plans and notices for all emergency response activities, including names of awarded companies and beneficial owners.
- Create special budget lines to record all crisis emergency response measures, published daily on Nigeria's Treasury On-Line Portal.
- Zambia:
- Zambian authorities requested IMF support for an economic program to restore macroeconomic stability and emergency financing for pandemic impact.
- A virtual IMF staff mission took place June 22 to July 10 to discuss the emergency financing request; progress was made but discussions continue as authorities determine policies and priorities in the context of a revised 2020 budget and medium-term fiscal stance.
- India:
- IMF projection for India: growth projected at -4.5 percent for fiscal year 2020-21 and 6 percent for fiscal year 2021-22.
- No revised assessment since the World Economic Outlook update three to four weeks prior to the briefing; full WEO update in October will update country outlooks.
- Noted reforms that have improved the investment climate: new bankruptcy code, National Goods and Services Tax; doing business ranking moved to 63 in 2020 from 100 in 2018.
- Further reforms recommended: labor, product, land, and additional infrastructure investment to attract more investment and ensure sustainable, inclusive growth.
- Argentina:
- Debt negotiations between Argentina and private bondholders are bilateral; IMF expects parties to work constructively and in a timely fashion to reach an agreement that restores debt sustainability and underpins inclusive, durable growth.
- Argentine authorities have not requested IMF financing or a program at this stage; any future IMF financing would aim to help meet balance of payments needs, including official sector obligations.
- Lebanon:
- No new information beyond recent comments by the Managing Director and IMF Middle East and Central Asia Department leadership; refer to those recent statements (no additional details provided in this briefing).
- Sub-Saharan Africa and South Africa:
- Sub-Saharan Africa emergency financing activity:
- IMF received "somewhere around 35, 40 requests" from Sub-Saharan African countries for emergency financing plus augmentations of existing arrangements, totaling "in the order of about $16 billion dollars."
- Of those requests, 29 requests totaling approximately $10 billion have been approved.
- Context: average IMF lending to Sub-Saharan Africa in a normal year is $1 billion; so $10 billion so far in the year is roughly 10 times the average.
- CCRT debt relief for Sub-Saharan Africa:
- Up to 22 countries can benefit from CCRT debt relief.
- Under the first six months stretch, 21 Sub-Saharan African countries have received debt relief exceeding $200 million from the IMF.
- South Africa:
- South Africa has requested IMF support (an emergency financing request).
- The request will be considered by the IMF Board on July 27; Board will decide on approval and amount.
Communications, events, and operational notes
- Embargo: press briefing embargoed until 10:30 a.m. Washington time.
- Upcoming IMF events (announced):
- Wednesday, July 29: Kristalina Georgieva interviewed by the New York Times at a live session on the Women's Forum for the Economy and Society; session to be posted on YouTube.
- July 30: Kristalina Georgieva will have a livestream conversation with Ian Bremmer of the Eurasia Group, moderated by Foreign Policy Magazine; open to join live.
- Tuesday, August 4 at 9:00: Gita Gopinath, IMF Chief Economist, will launch The Fund's external sector report (annual assessment on external imbalances worldwide) in partnership with OMFIF, in conversation with Mark Sobel of OMFIF.
- Operational tempo:
- IMF continues rapid operational pace and support to membership despite Board recess and temporary hiatus in press briefings.
Transcript of IMF Press Briefing, July 23, 2020. IMF Communications Department.