Transcript of IMF Press Briefing
IMF News, June 10, 2022
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- Published: June 10, 2022
Announcements, scheduling, and IMF outreach
- Briefing opened by Gerry Rice of the Communications Department; session embargoed until 10:30 a.m., Washington time.
- Managing Director Kristalina Georgieva:
- Visiting Barbados from June 14 until June 18 for her first trip to the Caribbean region; meetings include Prime Minister Mia Mottley and events open to media and public (students, regional technical assistance recipients).
- Participating in the G7 Leaders’ Summit on June 27 (hosted by Germany).
- Deputy Managing Directors activities:
- Gita Gopinath spoke on the global outlook with Martin Wolf (Financial Times).
- Antoinette Sayeh in Morocco on informality, development, and the business cycle; then Botswana (conference with African Union) and Zambia (meetings with President Hakainde Hichilema and others to discuss economic developments and debt restructuring).
- Kenji Okamura: speech in Poland on monetary policy in the Three Seas Initiative; visit to Moldova (meet President, Prime Minister, visit Ukrainian refugee site and border post).
- Bo Li: speech on regulating, supervising, handling distress in public banks on June 14 at 9:00 in Washington.
Ukraine — damage assessment, IMF support, and Administered Account
- Damage assessment:
- IMF has not conducted a comprehensive damage assessment due to ongoing conflict and access constraints.
- Preliminary external estimate cited: Kiev School of Economics estimated damage to physical infrastructure as of late May already exceeding $105 billion.
- Broader concepts of economic losses (output losses, business closures, foregone revenues, and investment) are "obviously much higher."
- IMF disbursements and Administered Account:
- IMF disbursed $1.4 billion to Ukraine in March for budget and balance of payments support.
- IMF approved establishment of a special Administered Account to channel donor grants and loans to Ukraine.
- Announced donor commitments mentioned:
- Canada pledged $1 billion and indicated an additional loan commitment of $250 million Canadian dollars.
- Germany announced a grant of a billion euros to be channeled via the Administered Account.
- Several other Member Countries are considering channeling support through the Administered Account.
- When asked about the account scale, IMF stated it would like it "to be as large as possible" given large needs; no precise target provided. (Participant reference: "just over 2, right? 2.25.")
- Program support:
- Ukrainian authorities have indicated willingness for an IMF-supported program to help macroeconomic stabilization and later reconstruction when conditions permit.
- Near-term international partner support should focus on emergency assistance, ideally fast-disbursing grants.
- IMF view: program discussions are medium-term and contingent on conditions permitting.
Sri Lanka — program engagement, debt sustainability, mission planning
- Situation:
- Sri Lanka facing severe economic conditions and balance of payments problems; humanitarian and poverty concerns emphasized.
- IMF engagement and timing:
- IMF planning an in-person mission to Colombo "in the coming weeks" to engage on program policy discussions, building on technical discussions held in May.
- Timing for a staff-level agreement depends on the strength of policies proposed and commitments by the authorities.
- Staff-level agreement is distinct from Board approval; Board approval requires adequate assurances that debt sustainability will be restored because Sri Lanka’s debt is assessed as unsustainable.
- Managing Director had a phone call with the Prime Minister to discuss next steps; IMF reaffirmed commitment to support Sri Lanka.
- No specific dates or magnitudes of potential IMF financing were provided at this stage.
Argentina — staff-level agreement, program targets, and intra-quarterly adjustments
- Staff-level agreement:
- IMF and Argentine authorities reached a staff-level agreement on an updated macroeconomic framework and associated policies to complete the first review under Argentina’s 30-month program financing arrangement.
- All quantitative program targets in the first quarter of 2022 were met.
- Initial progress being made on structural agenda in line with program commitments.
- Annual objectives established at approval of the arrangement will remain unchanged.
- Policy commitments and adjustments:
- Authorities committed to reprioritize some public spending and continue to implement the enhanced monetary policy framework to adhere to end-year fiscal and reserve accumulation goals.
- Given the impact of the war in Ukraine and seasonal spending/import patterns, the intra-year quarterly paths to achieve annual objectives will be revised; the overall annual targets remain unchanged.
- Details on updated intra-year quarterly targets and other specifics will be published in the staff report after the Executive Board discusses the first review.
- Timing:
- No precise Executive Board date announced; typical timing between staff-level agreement and Board discussion can be anywhere between three, four, six weeks (no specific date given).
Global outlook and growth forecasts
- April WEO revision referenced:
- IMF revised world growth forecast for 2022 from 4.4 percent to 3.6 percent in April.
- Outlook dynamics and risks:
- Since April, developments (ongoing war in Ukraine, volatile commodity prices—particularly energy and food, a more severe slowdown in China than expected, and rising inflation prompting monetary tightening) could lead to further downward revisions in the July World Economic Outlook update.
- IMF characterization at the time of the briefing: global economy headed into a "growth slowdown"; some countries may face recessions; the U.S. continued to grow strongly but faces inflationary headwinds.
- IMF signaled expectations of a further downward revision in the next WEO update.
Lebanon — resident representative and upcoming staff visit
- Appointment:
- IMF confirmed appointment of a Resident Representative in Lebanon.
- Engagement:
- IMF continues working with Lebanese authorities on implementation of a comprehensive economic reform program.
- Staff team planned to visit Beirut before the end of the month to discuss status of implementation of agreed policies.
- Emphasis:
- Complete and timely implementation of initial steps is key to addressing deep-seated problems and rising poverty in Lebanon.
Tunisia — program request and technical discussions
- Tunisia has requested an IMF-supported program.
- IMF welcomes publication of the authorities’ proposed economic reform program and is in technical discussions that are "advancing."
- IMF hopes technical discussions will lead to a staff mission to start program negotiations "soon" (no precise dates provided).
Nigeria and electoral neutrality; debt concerns
- IMF policy stance on political matters:
- IMF does not comment on elections or political campaigns.
- Economic engagement:
- IMF monitoring economic developments in Nigeria and engaging closely with Nigerian authorities on economic policy, including debt-related issues that are affected by global shocks.
Zambia — creditor committee and debt treatment
- IMF position:
- Welcomed announcement by People's Bank of China that China is ready to join the G20 Official Creditor Committee for Zambia and work expeditiously on debt treatment.
- IMF strongly encourages Zambia’s official bilateral creditors to form the creditor committee and provide financing assurances as quickly as possible to allow IMF consideration of an IMF-supported program and timely presentation to the Executive Board.
- Creditor Committee Secretariat is working with creditors to identify a suitable date; IMF seeks rapid progress but no specific date provided.
Food and fertilizer export restrictions — global concerns and India
- IMF concern:
- IMF is "very concerned" about the use of food and fertilizer export restrictions because they can exacerbate global price increases and market volatility.
- IMF monitoring indicates about 30 countries have curtailed exports of commodity goods, including food and fuel, since the war in Ukraine began.
- India:
- IMF welcomed India’s decision to relax an originally announced wheat export ban to allow contracted shipments and exports to countries with food security needs.
- IMF hopes for further relaxation of export bans by India and other countries that have imposed them.
Transcript of IMF Press Briefing — June 10, 2022. IMF Communications Department.