Transcript of IMF Press Briefing
IMF News, May 20, 2021
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- Published: May 20, 2021
Comprehensive Surveillance Review (CSR) and IMF announcements
- IMF conducting first comprehensive review of surveillance since 2014; Board concluded the review on May the 10th.
- Surveillance described as one of the IMF's three core functions alongside lending and capacity development; includes annual Article IV Assessments in every IMF Member Country (190 countries) and global products such as the World Economic Outlook, Global Financial Stability Report, and Fiscal Monitor.
- Objectives of the CSR: make surveillance "more timely, more topical, more targeted, better informed; in short, modernized."
- CSR priorities take into account: the pandemic, climate change, inequality, digital transformation, demographics, and other factors.
- CSR documents and a summarizing press release being made public on IMF.org by the end of the press briefing (May 20, 2021).
- Upcoming IMF-related events and research:
- Managing Director Kristalina Georgieva participated in the Vienna Economic Dialogue on Gender, Money, and Finance earlier the same day.
- Global Health Summit (tomorrow; co-organized by the Italian G20 Presidency and European Commission): Georgieva to speak; parallel IMF staff research on COVID-19 led by Economic Counselor Gita Gopinath and Ruchir Agarwal to be published.
- Washington Post Live event on May 25th: Georgieva with David Ignatius.
- International Finance Forum in Beijing on May 29th: Georgieva to deliver opening remarks.
- Virtual conference on climate-related financial sector action (June 2nd to June 4th) cosponsored by BIS, Banque de France, IMF, and Network for Greening the Financial System; opening/closing panels to be livestreamed.
IMF operations and headquarters resumption
- Press briefing embargo: until 10:30 a.m., Washington, D.C. time.
- IMF phased return to Washington, D.C. Headquarters buildings begins June 1st, June 1, reflecting improving local COVID-19 health and safety conditions.
- Many virtual operations will continue; Headquarters Resumption Plans will be implemented gradually and monitored as conditions allow.
- No determination yet on return to in-person press briefings.
Country engagements — summaries of updates, requests, and processes
- Chad
- Chad has applied for coverage under the Common Framework for debt treatment.
- Creditor Committee held a technical meeting earlier the week of the briefing; a follow-up meeting is planned for next week.
- Statement: "Chad urgently needs debt relief" and success would encourage other countries to step forward for restructuring.
- India
- IMF following events in India closely; hopes new infections will continue to decline.
- IMF stands ready to "strengthen our dialogue and scale-up our technical collaboration."
- IMF will revisit growth forecasts for India and the global economy in July via the World Economic Outlook Update.
- Immediate policy priorities for India: accelerate vaccination campaign, provide fiscal resources to the health sector, and social support to the most vulnerable.
- Tanzania
- Editor’s note provided in briefing: "Tanzania has requested a Rapid Credit Facility (RCF) at 100 percent of quota; we are ready to enter technical discussions as soon as the authorities are available. Details on access and timing will become available once discussions are under way. Initial discussions will focus on assessing the impact of the pandemic, including on fiscal and external accounts, and Tanzania’s planned policy response."
- Argentina
- Kristalina Georgieva met with President Alberto Fernandez in Rome less than a week before the briefing; meeting described as "very positive."
- Discussions continue on an IMF‑supported program focused on economic stability, protecting the most vulnerable, and a path toward sustainable and inclusive growth.
- No specific dates provided for Article IV timing or program timing; discussions described as constructive.
- On IMF surcharges: the Managing Director "took note of President Fernandez's request for a reform of the IMF's surcharges policy and I will consult with the membership on this issue."
- Context on surcharges: review would require Executive Board/membership decision; surcharges are part of IMF risk management to preserve lending capacity; most lending to poorest countries is via the Poverty Reduction and Growth Trust (PRGT) with highly concessional terms, often at zero interest and without surcharges.
- Tunisia
- Tunisian authorities have requested IMF program support while in Washington earlier that month.
- IMF has received Tunisia's economic reform plan; technical discussions are focused on understanding details of the plan.
- IMF stands ready to support Tunisia to cope with COVID impacts and restore sustainable finances.
- Zambia
- Zambia requested a financing arrangement with the IMF; discussions earlier in the year and continued through the month.
- Zambia has expressed interest in an Extended Credit Facility (ECF); IMF staff report "broad agreement on the macroeconomic framework" and "notable progress" on key policy measures.
- Key remaining challenges: correct large fiscal imbalances, increase revenues, ensure debt and expenditure transparency, halt incurrence of domestic arrears, and fully fund social protection with timely payments.
- Zambia has expressed interest in the Common Framework; discussions are continuing.
- Sudan
- Paris conference produced announcements welcomed by IMF; these steps advance financing needed to clear Sudan's arrears to the IMF and pave way for HIPC decision point.
- Preconditions for decision point: satisfactory policy performance under staff-monitored program and adoption of a poverty reduction strategy (recently adopted).
- IMF notes need for substantial concessional assistance post-debt-relief, reforms to reduce energy subsidies, strengthen governance and anti-corruption, enhance fiscal transparency, and reduce state role via State-Owned Enterprise reform.
- El Salvador
- Authorities have requested an IMF program; IMF missions report progress on macroeconomic and structural policy discussions that could underpin a Fund-supported program.
- Discussions to continue on economic governance, fiscal transparency, and anti-corruption framework.
- Previous IMF engagement: Executive Board approved $389 million in emergency financial assistance to El Salvador.
- Ethiopia
- IMF will not comment on details of ongoing Common Framework discussions for countries engaged under that process until outcomes are available.
- Zimbabwe
- Economic and social situation has deteriorated sharply; IMF continues policy dialogue and capacity development.
- Zimbabwean finance minister announced an IMF staff mission expected in the second quarter of the year, followed by hopes for a staff-monitored program in the third quarter.
- IMF precluded from providing financial support due to unsustainable debt and official external arrears; IMF staff engagement and a virtual mission planned for the first half of June 2021.
SDR allocation and Africa financing
- IMF membership backed an unprecedented Special Drawing Rights (SDR) allocation of $650 billion (largest in IMF history); approval process expected to proceed to Board in June and Board of Governors in August, subject to membership processes.
- Estimated immediate availability to African members: about $33 billion.
- Georgieva's estimate on Africa financing needs: "Africa's additional financing needs for an adequate COVID-19 response at around 285 billion through 2025 and of this, 135 billion for low-income countries."
- Georgieva described that 285 billion as "the bare minimum" and that doing more would cost "roughly twice as much."
- Potential to magnify SDR impact via on-lending at highly concessional terms through mechanisms like PRGT; past on-lending of existing SDRs helped triple concessional lending to low-income countries in the past year.
- IMF emphasizes that additional resources should be complemented by debt relief, domestic reforms, domestic resource mobilization, and private sector investment.
IMF lending and policy posture
- Over the past year IMF provided about "13 times" its average annual lending to Sub-Saharan Africa.
- PRGT: zero-interest concessional lending to poorest countries; used to scale up concessional support.
- On U.S. monetary policy and the Fed: IMF view expressed that recent Fed measures were appropriate and "fundamentally important" to U.S. and global pandemic response; Fed decisions are "data dependent" and should be communicated clearly and in a timely way.
Transcript of IMF Press Briefing, May 20, 2021 — International Monetary Fund — https://www.imf.org/en/news/articles/2021/05/20/tr052021-transcript-of-imf-press-briefing