Transcript of IMF Press Briefing
IMF News, July 14, 2022
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- Published: July 14, 2022
Announcements and schedule
- Briefing embargoed until 10:30 a.m. Washington time.
- Kristalina Georgieva in Indonesia for G20 Finance Ministers and Central Bank Governors; will move on to Japan to speak at the 25th Anniversary of the IMF’s Regional Office in Tokyo.
- World Economic Outlook (WEO) update: July 26th at 9:00 o’clock with Chief Economist Pierre-Olivier Gourinchas.
- IMF Annual Meetings: October 10th to October 16 th, held in person.
Debt, G20 Common Framework, and creditor committees
- Managing Director emphasized urgency: "decisive actions now" as debt risks rise.
- Debt distress prevalence:
- "A third of emerging markets and developing economies are in debt distress."
- For low-income countries: "60 percent" in debt distress.
- Creditor committees and timing:
- Chad:
- Staff-level progress on macroeconomic framework and reforms for first review of the Extended Credit Facility.
- Staff-level agreement "remains conditioned on sufficient financing assurances" and "an agreement on the necessary debt treatment."
- Creditor Committee expected to continue meeting; agreement needed promptly to allow submission of first review to the IMF Executive Board.
- Zambia:
- Second Creditor Committee meeting expected "in the next week or so."
- If official creditors provide financing assurances within the next few weeks, Board consideration of a program could follow "around early September," noting Board recess in the first couple of weeks in August.
- Ethiopia:
- Creditor Committee formed under the G20 common framework.
- IMF to meet the Creditor Committee "the week of July 18th" to update on the economic situation.
- Common Framework message to G20: large lenders, sovereign and private, urged to step up and "play their part."
Resilience and Sustainability Trust (RST)
- Purpose: new IMF instrument for macro-critical, longer-term structural challenges (climate change, pandemic preparedness), covering low and vulnerable low-income countries, vulnerable middle-income countries, and fragile states.
- Coverage: "about three-quarters of 190."
- Financial terms and eligibility:
- "Twenty-year maturity, 10-1/2-year grace period, and low interest rates."
- Eligibility: high-quality policy measures, a concurrent financing or non-financing arrangement with the IMF, sustainable debt, and capacity to repay the Fund.
- Funding status and target:
- Initial aspiration: "$45 billion."
- Current: "close to $40" — specifically "we are at $37 billion, about $37 billion right now."
- Timeline: aim to start RST lending "by around the time of our annual meetings in the Fall."
IMF emergency and program support examples
- Recent IMF support mentioned:
- Moldova: "$171 million"
- Senegal: "$456 million"
- Mozambique: "$638 million"
- Emergency financing and rapid responses noted as unprecedented in speed over the last couple of years, including debt relief and SDR allocation less than a year ago.
Country-specific updates and engagement
- Ghana:
- Ghana has requested an IMF program; IMF staff mission in Accra from July 6 through July 13 with an end-of-mission statement issued; discussions at an early stage.
- Argentina:
- Managing Director and Western Hemisphere Director had calls with Minister Silvina Batakis.
- MD characterized call as "very good" and looks forward to continuing "constructive engagement."
- Minister reiterated commitment to implement the Fund-supported program and agreed objectives (including fiscal measures, expenditure controls, tax compliance, and public debt management coordination).
- Second review expected to take place in September.
- China:
- IMF welcomed shift to more expansionary fiscal policy and reduction in key policy rates earlier in the year.
- Recommended fiscal support focused on vulnerable households through transfers and strengthening social protection.
- Recommended the Peoples Bank of China "should continue to provide monetary support."
- Urged ramping up booster shots and targeting under-vaccinated elderly to allow a "more flexible and less restrictive" containment strategy.
- Sri Lanka:
- IMF was in Colombo in June and held "constructive discussions" on policies and reforms that could be supported by a program; no program in place currently.
- Political and social unrest has interrupted those discussions; IMF hopes to resume dialogue when situation stabilizes.
- Technical counterparts remain in some key ministries and the central bank for continued technical discussions.
- Public debt currently assessed as "unsustainable"; Board approval of any program would require "adequate assurances on debt sustainability."
- Pakistan:
- Staff-level agreement reached on combined seventh and eighth review, translating into "about 1.17 million being disbursed to Pakistan."
- Total IMF disbursements under the program now "well over $4 billion, about $4.2 billion."
- Board timing between staff-level agreement and Board decision typically within a roughly three to six week window.
- Ukraine:
- IMF support includes a program loan of "$1.4 billion" and SDR allocation; an administered account established with donor contributions from Canada, Germany, the Netherlands, with more expected.
- Ukraine is "servicing its debt in an orderly way."
- IMF view: priority for Ukraine financing is "grant financing in the immediate and the short-term" to allow operation without incurring further debt.
- Kenya:
- IMF Executive Board scheduled to discuss Kenya's third review on July 18th; full report to be published after the Board meeting.
Annual Meetings and logistics
- Annual Meetings planned in person in Washington in October; IMF hopes for broad in-person participation and will monitor evolving COVID developments.
- WEO update press conference scheduled for July 26th (see above).
Transcript of IMF Press Briefing — July 14, 2022. IMF Communications Department.