Transcript of IMF Press Briefing

March 18, 2022

MR. RICE: Good morning, everyone. And welcome to this press briefing on behalf of the International Monetary Fund. I am Gerry Rice of the Communications Department. And nice to see all of you online today and thanks for joining us. As usual, this morning’s briefing will be embargoed until 10:30am. That's Washington time. We will try and take as many of your questions as we can. Since the last time I was here at this desk, of course, we have the war in Ukraine that has broken out, which is probably the major development since the last time we were able to meet. So, I imagine there'll be a number of questions on that today.

The IMF, of course, has expressed its profound concern about the humanitarian suffering that is going on there. And about the impact the war in Ukraine may have not just for Ukraine and Russia and neighboring countries, but for the global economy. Amongst other things, you may have seen that just recently, the IMF approved emergency financing for Ukraine of $1.4 billion, that's money that's disbursed immediately to help with urgent needs in Ukraine. You may also have seen our analysis. Clearly the situation is ongoing, but we're trying to provide analysis as best we can. So, we've been publishing staff analysis and statements by IMF management, including the Managing Director Kristalina Georgieva, and the First Deputy Managing Director, Gita Gopinath.

You may also have seen just in the last day or so a blog from the five area heads of departments at the IMF, which looks at the global impact of the war in Ukraine—again, in as much as we can assess at the moment. We also have if you haven't seen it, a one stop-shop landing page on our website, it's very prominent on If you just go to, you will find it there, everything that the IMF is doing in terms of the war in Ukraine. Let me just make two announcements and then get to your questions quickly.

Tomorrow, the Managing Director Kristalina Georgieva will speak at a high-level panel on strengthening support for fragile and conflict affected states. You can watch that live on tomorrow at nine o'clock. And then let me just bring to your attention an event next week again with the Managing Director and with Gita Gopinath, the First Deputy Managing Director. They will be joining Foreign Policy editor Ravi Agrawal for a live stream conversation. And that again, will be on You can watch it live Tuesday, March 22, at 11am.

And with that, I'm going to turn to your questions. Just a heads up I do need to finish probably by a half in half an hour this morning, due to another engagement. But I'll try and be succinct. And I'll try and take as many of your questions as I can. I'm going to begin this morning with Lalit Jha—Lalit I see you there. Come on in.

QUESTIONER: Thank you for doing this. And good morning, I wanted to ask you about the Ukraine crisis. What impact will Ukraine crisis going to have on the developing world in particular on India and China? Is it going to have far more of an impact of COVID-19? What role is the IMF planning to have in this year during this situation to ensure impact on poor and vulnerable is minimized?

MR. RICE: Thanks very much. Your question speaks a bit to that blog I mentioned that we released just in the last day or so, where, you know, I would refer everyone to it. But amongst other things, it does say that we believe the war is going to be a major blow to the global economy. It's going to hurt growth and It's going to raise prices. And again, all of that in addition to the suffering and the humanitarian impact that I referred to earlier. In terms of your question, clearly, it's going to have a more serious impact for the more vulnerable countries, many of them in the developing world, steeper price increases for food, and fuel is going to hurt these countries badly. Gauging the reverberations, specifically for each region, and each country, again, is difficult at this point, given the situations ongoing, again, our blog recently took a stab at that made an attempt at that. What we've said is that we already see our growth forecast, as likely to be revised down next month. And that's when we'll be able to offer a fuller picture of the impact of the war for the global economy and for developing countries. That's going to be in our World Economic Outlook, which I think you all know, is going to be coming next month, and our regional assessments, the regional economic outlooks that then follow that. Maybe just to try and give you a little bit on your specifics. Clearly, the crisis adds to the already difficult tradeoffs in Asia, with rising inflation, limited fiscal space, and the prospect of rising global interest rates amid high public and corporate debt.

All issues that we've discussed here, before, the severity and duration of the conflict will be a key factor to whether Asian central banks can look past this current rise in commodity prices on China, which you asked about. The immediate impact of the conflict is likely to be relatively small. The higher oil price could affect domestic consumption and investment going forward. But price caps will limit the impact.

Overall, Chinese exports to Russia are a relatively small share of exports. Overall, however, China would be affected if trade partner growth were to slow significantly, serious supply side disruptions were to emerge, or global financial markets were more severely impacted. And again, the duration of the conflict is a factor that affects everyone in India, which you asked about. The global economic fallout of the war is expected to negatively impact India's economy through a number of channels, which differ from those impacting the Indian economy during COVID-19, which was part of your question.

The sharp rise in global oil prices represents an important terms of trade shock. With macro-economic implications, it will lead to higher inflation and current account deficit. But the impact on the current account could potentially be partially offset by favorable movements in prices of commodities that India exports, for example, wheat.

The negative impact of the war on the US, the EU, and Chinese economies could dampen external demand for India's exports, while supply chain disruptions could negatively affect India's import volumes and the prices. There is also the question of tightening financial conditions and heightened uncertainty, which can affect domestic demand and the fiscal position through higher borrowing costs and reduced confidence.

In summary, I think there's a great deal of uncertainty around the outlook for India. I think that uncertainty is clearly, as I would describe it, as elevated, and will depend again, on the magnitude and persistence of the shock, and whether other macro-economic risks materialize, and of course, on the policies of the government in response to this difficult situation. I imagine there may be other questions on Ukraine. Maybe we should just try and take those and then move on to some other issues. I do see hands raised—Eric Martin Bloomberg. Eric, do you have a question on Ukraine?

QUESTIONER: Thank you, Gerry. I wanted to ask about the use of SDRs for Ukraine. We saw reports today that Ukraine is seeking this program to allow countries to transfer SDRs to support Ukraine, including asking the G7and Netherlands to transfer their SDRs to Ukraine. I didn't know if you have anything on how that would work or how quickly that could be set up.

MR. RICE: Yes, thanks Eric. We talked about it the other day, when we released the staff report on the emergency financing for Ukraine. We talked about this possibility of what we call the IMF administered account. It's part of a broader effort that we have underway to help close Ukraine's financing gap. And in this context, as you indicate, donors have expressed interest for the Fund to establish and administer a vehicle, financing vehicle through which they can channel their resources to support Ukraine. So, we are currently exploring the creation of again, what we call this IMF administered account that would allow interested donors to pool and to channel resources, loans and or grants to assist Ukraine in meeting the extraordinary balance of payments and budget needs arising from the war, while supporting macro-economic stability. The administered account for Ukraine could receive as I say, loans and or grants in either SDRs or reserve currencies and disperse these resources to Ukraine.

Upon meeting specific disbursement conditions, as established by lenders and donors for the for the account. We have used these accounts before. It's something that we have done with single or multi-donor participation, to channel financial resources to countries in need so we can give you examples of where we've done that, and what's the benefit? The benefit is that this allows, as I say, pooling of resources and coordination among donors. And it also helps, and again, I think you're asking about this, Eric, it helps provide safeguards as resources lent through this administered account, can be deposited in the SDR account at the Fund, which helps to safeguard the use of the resources. I'm looking for other questions on Ukraine if there are any. I am seeing Yuliana you have a question on Ukraine.

QUESTIONER: Hi, Gerry. Hi, this is actually my first time attending the Welcome. Welcome to you. Really excited about that. I'm Ukrainian myself, however. I mean, and I just wanted to say thank you to the IMF for supporting the country during this time. My questions were not directly about Ukraine, possibly because I don't really do a broad coverage of micro coverage. So, I focus specifically on, on what countries are in distress, which I know Ukraine is probably one of them now. But I had questions about Lebanon, and Sri Lanka, if you're willing to take those questions, you know, since they are also affected by the war?

MR. RICE: Of course, of course I am. And I actually know that others are interested in Lebanon and Sri Lanka. So, go ahead, of course.

QUESTIONER: Okay. On Lebanon, we have been expecting to hear some news on the progress of the IMF talks with the authorities. And, you know, my sources have been telling me that the end of March was an optimistic kind of timing for that. But I do wonder if that war means that there will be delays, especially given that Lebanon is so reliant on wheat and Russia, that I'm just guessing, you know, any base economic scenario that you guys were discussing before, might just have to be rethought of you know, because of the current situation. And the question on Sri Lanka is really about any key takeaways from the visit to Colombo this week. And, you know, whether there's been any confirmation [inaudible], which is on everyone's minds right now. And also in Sri Lanka, it's kind of broader question, whether there is any possibility or any talks going on right now about including kind of countries that are not low income into the common framework would be one such country this framework.

MR. RICE: Yuliana. Thank you for those questions. You're, you're breaking up for me quite a bit, but I think I got the gist of it. And thanks for the questions. And welcome to the press briefing. Your first time with us. On Lebanon, our discussions with the Lebanese authorities are continuing and included a recent staff visit. I can tell you that we expect another staff mission to Lebanon before the end of this month. We remain closely engaged, of course, we are trying to work with the Lebanese authorities to formulate a reform program that can address the severe economic financial challenges Lebanon is facing. I would say the discussions are progressing well. But extensive work is needed in the period ahead. Lebanon's challenges are deep and complex, they will require time and a commitment. You know, our Managing Director has said we're ready to redouble our efforts to help Lebanon and its people. But you know, at this point, the discussions are ongoing. And we will have that mission coming up later this month. On Sri Lanka—clearly another country facing mounting economic challenges. In our article IV consultation recently, we just concluded the Board meeting on that last late last month, we highlighted the urgent need to implement a credible and coherent strategy to restore macroeconomic stability and debt sustainability while protecting vulnerable groups through strengthened well targeted social safety nets.

So, that was our annual consultation with Sri Lanka which we have with every country beyond that Yuliana I am not in a position to share further details at this point. But I can tell you we stand ready to discuss all options for Sri Lanka. Thank you for your questions. I am going to move on to colleagues from Argentina. I see you online. Liliana Martin. I see Rafael there, Paula. I'm going to take a wild guess that you're going to ask me about Argentina. Hey, what why don't we go ladies first Liliana, Paula?

QUESTIONER: Great. Okay, thank you, Gerry. Good morning. The Congress—the Argentinian Congress is expected to approve the program today. When will the Executive Board meet to analyze the program, the Argentinian case? And another question about the mission. Is there going to be any technical mission to Buenos Aires and can missions be virtual or must be face to face. Thank you.

MR. RICE: Okay. Let me take the other questions on Argentina. Paula, do you want to come in?

QUESTIONER: Hi, Gerry. Hey, it's Patricia Valli from El Cronista.

MR. RICE: Patricia, okay, please.

QUESTIONER: How are you? I would also like to ask two questions. One, regarding this whole scenario that you are picturing, the economic crisis. If there are any targets that could be revised in the first revision of the Argentinian agreement? And also, the government requested the Fund, if there were to be new facility, at some point, Argentina would have the opportunity to use it. Is that confirmed? It's part of what's expressed in the letter of intent of the agreement.

MR. RICE: Thanks, Patricia. Anyone else wants to come in on Argentina?

QUESTIONER: Yeah. Hi, Gerry.

MR. RICE: Are you Paula? I'm not clear who's coming.

QUESTIONER: Hello, Gerry. Have you heard my questions?

MR. RICE: No, please go ahead.

QUESTIONER: Okay. Thank you, Gerry. The Argentinian Congress is expected to approve the program today. I would like to know when will the Executive Board go into meet to analyze the Argentinian case. And also, I asked about the technical mission—is there a technical mission to Buenos Aires and then will the mission be virtual or must they be face to face. Yeah. Thanks.

MR. RICE: Thanks. Sorry, Paula. I did hear your question and I will answer it. I think I was confusing you with Liliana, Liliana Do you want to come in?

QUESTIONER: Yes. Do you hear me Gerry?

MR. RICE: Yes, Liliana. Oh, no, I don't. Liliana, I'm not hearing you know. For some reason, let me move on. Liliana. I'll come back to you.

QUESTIONER: Yes, sorry. How does the IMF assess than an important part of the government, I mean, linking to the Vice President Cristina Fernandez de Kirchner is against the new IMF program. Do you think it could affect its implementation?

MR. RICE: Okay, thanks, Liliana. Raphael, did you want to come in?

QUESTIONER: Yes. Hi, Gerry. Good morning. Actually, I was going to ask you the same thing Liliana just asked. I would just add a follow up the Vice President Cristina Kirchner. She called the program in a video the IMF plan. And I know you care a great deal about the ownership of the plan. So, I was wondering if you could tell us a little if this could affect the comply with the exceptional access criteria, because, you know, one of the things the Board has to assess is whether the government has the capacity to actually implement the program.

MR. RICE: Okay. All right. Thanks, Rafael. Martin, did you have something else just since I see you there?

QUESTIONER: Yes, thank you. Just to add one more question about…because Argentina has got an inflation of 52% in the last year. Is it possible yet to achieve the goal? It is clearly in the agreement of the inflation goal between 38% and a 48% this year?

MR. RICE: Okay, Martin, let me take that clutch of questions on Argentina. Thank you all. So, look on the status of where we are, earlier this month, IMF staff and Argentine authorities reached a staff level agreement on a pragmatic and realistic program to be supported by the IMF with credible economic policies to strengthen macroeconomic stability and to start addressing Argentina's deep-rooted challenges to sustainable growth. This is envisaged to be a 30-month extended fund facility arrangement. It aims to provide Argentina with the balance of payments and budget support to enhance the prospects for Argentine people to restore growth, as I say, by implementing measures designed to stabilize the economy, promote growth, and protect essential social programs.

Importantly, on Martin's point, the program seeks to begin to reduce persistent high inflation through a multi-pronged strategy involving a reduction of monetary financing of the fiscal deficit and a new framework for monetary policy implementation to deliver positive real interest rates to support peso asset demand. This, of course, will be a challenging task. In light of the evolving global conjuncture, as rising commodity prices are impacting inflation throughout the world, a point we just talked about.

There were questions about the next mission to Argentina. I don't have any information regarding the further information, of course, we are very closely engaged on an ongoing basis right now, with the Argentine authorities, in discussions on how we move this staff level agreement forward to our Executive Board for discussion and approval.

You all know, the staff level agreement, as in all country cases, requires the approval of the IMF Board. So, the Board is expected to discuss the request for this program after the Argentine National Congress approves the economic and financial program. And as I think you all know, this legislative consideration is required by Argentina's domestic law. I do not have a date for the Board meeting yet. But stay tuned. And we will keep you apprised of that. There were some questions about the, you know, impact of the war in Ukraine on Argentina? And would that affect the discussions? Well, Argentina, like other emerging economies we just talked about this is already being affected by the war in Ukraine, including with the rise in global commodity prices already impacting inflation. I can tell you that IMF staff is assessing the potential broader impact on growth, as well as on external and fiscal balances. Uncertainties, however, remain large, and depend on the duration of the conflict.

There were questions about a potential new facility. Look, what I can say on that is that if the IMF Executive Board were to establish any new facility with a longer repayment period for which Argentina were eligible, IMF staff would certainly be happy to work with the Argentine authorities to facilitate their request for support under such a potential new facility. This, of course, would also be the case for other member countries.

And as always, a request for financing under any IMF, under any IMF facility is subject to approval by our Board. And just for those of you who may not be watching the IMF so closely, I think what the question is referring to there is the establishment of the Resilience and Sustainability Trust, which we've talked about before here, a potential new facility for the IMF, on which progress is being made in establishing, and I would expect further progress to be made by the time of the Spring Meetings. So, I think that's what we're referring to there.

Finally, there were questions about, you know, domestic politics, and I think you all know, who follow us, we don't we don't comment on domestic politics. But as we have said before, and you asked about this, we are of the view that broad political and societal support in Argentina would be critical to the overall success of the economic program. You know, broad ownership, broad political and domestic support is, is key. And again, we've said this before,

I'm moving on from Argentina. Matthew Lee. Hey, Matthew, I see you there. Come on in.

QUESTIONER: Yeah, sure. Hey, thanks a lot Gerry. And I know Ukraine is and Argentina are big ones I wanted to ask about Pakistan and South Africa. But I am going to ask you Ukraine question just because I've seen these reports about the suspension, I guess of a Russian representative Dean, and it's described as a ceremonial position. But there are various stories out there. And I'd like you to explain exactly what was and wasn't done and who makes the decision about those kinds of internal ceremonial posts at the IMF. Now on Pakistan. There are reports that that the IMF is not looking kindly on Imran Khan's relief programs, particularly the suspension of tax amnesty to the industrial sector, and I guess of the cutting of fuel subsidies. Also, back to Ukraine, they're supposedly working with Russia on a gas pipeline. I don't know if you consider that internal politics or external politics. But if you have, do you think that's going to go forward? What's the impact on that? And in South Africa, same thing, they're sort of I don't want to say routine protest, but the Economic Freedom Fighters are very much critiquing the program. And I wanted to know what your response to that is. And if you have anything in particular about the impact of particularly on grain and other things on the South African and other economies in Sub Saharan Africa, of the conflict in Ukraine, thanks a lot.

MR. RICE: All right, Matthew, thank you very much. On South Africa. The Economic Freedom Fighters call for a march shows clearly that society is paying close attention to economic issues around public debt and governance in South Africa. And in fact, these issues are also at the center of our engagement with the South African authorities. You may know our relationship with South Africa is one based on policy dialogue, and technical collaboration, we also help the country address its large external financing needs that arose as the consequence of the pandemic. A drawing on our recent consultation with the South African authorities, it's fair to say that we agree on the importance of reigniting growth, creating jobs, reducing inequality. And, again, all of this in the context of the impact of the pandemic.

We stand ready to continue to engage with the Economic Freedom Fighters and other stakeholders on the implementation of South Africa's economic reforms, is what I have on South Africa. Matthew on Pakistan. Last month, our Board concluded our article IV consultation and completed the sixth review under the program, the financing program that we have with Pakistan, and that allowed for disbursement of about a billion dollars under the program. Discussions continue, I would characterize those discussions as constructive.

Matthew, I don't have the details on the specifics you were asking about. But I would characterize those discussions right now as constructive to reconcile, you know, the key objectives, in fact, to try and meet the key objectives of the program of fiscal prudence, external sector viability, due protection of vulnerable groups from high international energy and, and food prices. So, those discussions are ongoing. On your question about the Dean of the Board, we issued a statement yesterday, Matthew, and let me just repeat it. The Executive Board of the IMF has decided to temporarily suspend the role of Dean of the Board, given Russia's role in the ongoing war in Ukraine. And its potential impact on the ability of the executive director for Russia to carry out this task, effectively. So, that was our statement.

I think it was reported at Matthew, I just want to be clear, I'm not sure I picked you up, quite rightly. But this is not a suspension of the executive director for Russia. It is not. it's a suspension of the role of the Dean of the Board, which, you know, is an honorary title, which goes to the executive director on the Board, who is longest serving. That's how the Dean title is ascribed. So, it's, again, a temporary suspension of the role in the context that I just mentioned, which is the war in Ukraine. I probably have time for maybe one or two more questions. Andrea, I see you there. And the Delphine and that's going to do it for today. I'm sorry, Andrea.

QUESTIONER: Thank you so much. I wanted to see if you could give us a few more details on the trust, the special account that you're setting up for Ukraine, and how quickly you think those details will be available. And then I want to ask you a slightly broader picture, that question that has to do with the changes, sort of what's at stake right now with these discussions about China with China about whether they're going to support the sanctions and just the condemnation of other countries. And I'm wondering whether you know, what you think the impact would be in terms of the functioning of the IMF, if this division gets deeper, or if you see more signs. Kristalina had said in an interview with CNBC, that she had spoken with the head of the Central Bank, and she is of China, and that she assumed that there would be more pressure coming economically. Do you have anything that you can add on either of those questions?

MR. RICE: You know, on your last point, Andrea, I just I really don't have much more to add. I talked earlier. I don't know if you were in the call in the call at that point. Andrea, I did refer to the blog that we issued the other day, from our five area heads of department. And it did speak of, you know, longer term, the potential for the war could alter the global economic, geopolitical arrangements order that we have.

Talking about trade and supply chains and payment, networks, reserve currency holdings, all of that increased geopolitical tensions further raised risks of economic fragmentation, especially for trade and technology that I'm just actually reading from the blog. But I don't really have much beyond that. At this point, on the issue of, of sanctions. Of course, the Spring Meetings are coming into view coming up shortly, the IMF membership will be there. And I'm sure that these issues that you're referring to, will be much under discussion. Andrea, also on the administered account, I did spend some time responding to Eric, if you don't mind, just because I'm so rushed this morning, and I apologize to you. I won't repeat all of that, but you'll find it in the transcript. I went into some detail Eric as pretty much the same question. I'm going to try and squeeze in Delphine and Gabriel if I can, Delphine.

QUESTIONER: Hello, good morning. Thank you for taking my question. Actually, I would like to have more details on Lebanon missions. Do you have a specific date, and will it be in person? And do you also have any information on Tunisia? I was wondering if we can expect any formal talks.

MR. RICE: I lost you a little bit on Tunisia. But I think I catch your drift look on Lebanon. Delphine, I don't have anything to add to what I said in response to the previous question. So, if you don't mind, I'll refer you to that. On Tunisia, as you probably know, we have received from the Tunisian authorities a request for an IMF supported program. The IMF has always been and will continue to be a strong partner for Tunisia. So, over the past several months, we've been in close consultation with the Tunisian authorities. We've had technical discussions on their policy intentions and their economic reform program to consider launching a new financing support program from the IMF. What I can tell you Delphine, a small staff team from the IMF plans to visit Tunisia for further discussions with the authorities later this month. Okay, later on in March, to build on what I would characterize as the good progress that has been made in understanding their reform policies. That's what I have. Gabriel, I've seen your hand. Let me take your question. And I'm afraid this is going to have to be the last question, Gabriel. Come on in.

QUESTIONER: Gerry, thank you for this. I'll be quick. I'll ask about a Fed rate hike yesterday and the expecting more to come especially on its impact on emerging markets. Think it's in January this year, IMF issued a blog alerting about the risk for emerging markets. But now, you know, with everything else to COVID, Ukraine situation is happening, do you see this continuous rate hike from the United States, might pose further uncertainty for developing countries? And do you think that developing countries or the global recovery is ready for this? And if not, how can they cope with that very much?

MR. RICE: Yeah, thanks, Gabriel. Look, let me just comment on the Fed, the Federal Reserve is appropriately moving to a less accommodative stance of monetary policy, beginning to increase the Fed funds rate and signaling the higher future rate path. We saw the decision yesterday, of course, continuing to give clear forward guidance that reacts proportionately to shifts in the data will help keep inflation expectations anchored. Nonetheless, and speaking a bit to your question, Gabriel, this faster pace of Fed normalization increases the risks faced by other countries reliant on dollar funding, especially in emerging and developing economies. Evaluating the impact of monetary policy tightening by the Fed on emerging markets is more difficult now and should be done on a case-by-case basis given the considerable differentiation between countries. And the impact of the war, which we began talking about in this briefing. In terms of what emerging market countries and developing countries can do—Gabriel, thank you for mentioning the blog. I would refer everyone to that, that's a blog we published a bit earlier this year, the one that Gabriel referred to. It does go into some detail about how countries can manage the clearly very difficult tradeoffs they're facing. It talked about actions to strengthen policy frameworks and reduce vulnerabilities in areas of monetary policy, fiscal policy, and financial support for business. It also referred of course, to the importance of the global financial safety net, and countries having access to that as appropriate, including, of course, to support from the IMF, which we stand ready to provide as needed by our membership. So, sorry, people. I do have to rush today. And thank you for your questions. Look forward to seeing you next time out. And thanks for being with us today. Stay safe and well. Bye.

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