Transcript of IMF Press Briefing

May 11, 2023

MS. KOZACK: Good morning. Welcome to this press briefing. I'm welcoming both those of you who are joining us here in person and also I see we have many colleagues on line as well. It's also very nice to be here in this room. It's my first time actually being in the room with all of you in person, but I hope for you it's also nice to be back in person.

My name is Julie Kozack, I'm the Director of Communications at the IMF.

This briefing is embargoed until 11:00 a.m. Eastern Time. As we normally do, we will start with some announcements and then I'll turn to take your questions, both in person, on Webex, and in the press center.

First, I'll start with management travel. So from May 11 to May 13 the Managing Director Kristalina Georgieva will be in Niigata, Japan for the G7 Finance Ministers meeting. She will also then be back in Japan on May 19 and 20 for the G7 Leaders meeting in Hiroshima. On May 23 the MD will be in London for the UK Article IV concluding discussions and the press conference. On May 24 she will then travel to Qatar for bilateral meetings. On May 26 she will be back in the U.S. to participate in the concluding discussions and a press conference following the United States Article IV consultation.

The First Deputy Managing Director will also be traveling. May 15 to 16 she will be in Chile, where she will hold meetings with the authorities. She will then travel to Brazil May 17 through 19, where she will deliver a speech at the Central Bank of Brazil's annual conference.

In terms of regional economic outlooks, earlier this morning we launched our Regional Economic Outlook for the Middle East and Central Asia. This was in the Central Asia leg. It was in Astana, Kazakhstan. You can find it on Various other regional economic outlooks were launched in recent weeks, as I'm sure you are aware.

And, finally, just a reminder that the 2023 Annual Meetings will be held October 9 through 15 in Marrakesh, Morocco. The full schedule of these events will be available closer to the event. And I also just want to highlight that we recently announced that the 2026 Annual Meetings of the IMF and World Bank will take place in Bangkok, Thailand in October 2026, and this was decided earlier in April by a vote of the Board of Governors of the two institutions. The last time the Annual Meetings were held in Bangkok was 1991.

So now we can move to your questions. Please remember to identify yourselves and the media outlet that you represent.

David, let's start with you.

QUESTIONER: Hi. Hi, David Lawder with Reuters.

We just wanted to get the IMF's perspective on a couple of issues related to the U.S. economy that are highly in the news right now, and especially the knock on effects of these for the global economy, particularly for emerging markets. That's the debt ceiling crisis that is happening now between the White House and Congress, with the prospect of a potential default as early as June 1.

And then also the pressure on the regional banks, sort of the regional banking crisis that's been sort of playing out in slow motion over the last few weeks. There's more pressure, lots of concerns about commercial real estate in those regional banks.

So if you could talk about that a bit.

MS. KOZACK: Certainly. Thank you.

On the debt ceiling, first, it's important to note that these discussion in the U.S. are taking place at a time that is very difficult for the global economy. And our assessment is there would be very serious repercussions, not only for the U.S. but also for the global economy should there be a U.S. debt default. And we strongly encourage the parties in the U.S. to come together to reach a consensus to urgently address this matter.

On the regional banks, what we have seen is that as we have transitioned from a period of low interest rates to a period of higher interest rates, and as that transition has taken place quite rapidly, it has exposed some vulnerabilities in some banks, particularly here in the United States. The authorities in the U.S. have taken rapid action to address those vulnerabilities and that is most welcome. But it is very important that policy makers remain vigilant as more hidden vulnerabilities may emerge in this new high interest rate environment.

Okay, maybe let's go to Argentina. And we can take a few questions on Argentina.

So, Paula, please.

QUESTIONER: Good morning, Julie.

I need to know how the negotiations of the program ––

MS. KOZACK: Paula, can you push the button on your mic please so colleagues on line can hear you.


I'd like to know how the negotiations of the program with Argentina are going on. And, also, I know that everything is on the table on the discussions, but I'd like to know if they are talking specifically about the possibility of speeding up or front loading the disbursements planned for this year. It's about $10 billion.

Thank you.

MS. KOZACK: Thanks, Paola.


QUESTIONER: Thanks, Julie. Rafael Mathus from La Nacion.

I have two questions on the exchange rate also in Argentina. Is the IMF asking the government to correct the official exchange rate as part of the negotiations on the new revision?

And, also, Minister Massa said this week that the ability of the central bank to intervene in the foreign exchange market is not something that they are willing to renounce. I wanted to know if the IMF is okay with this.


MS. KOZACK: Okay. Very good. Do we have any colleagues online who have questions on Argentina? I think I see Patricia Vale. Patricia, please, go ahead.

QUESTIONER: Hi. Thank you.

Also in line with my colleagues, I would like to know if –– what's the discussion regarding the fiscal objectives of the program. And you mentioned Kristalina Georgieva traveling to South America, but you didn't mention Argentina. I would like to know why she's not visiting.

MS. KOZACK: Okay. Thank you.

Any other questions on Argentina? Liliana, is that you I see with the hand up? You're muted, Liliana, we can't hear you.

QUESTIONER: Hi, good morning. You hear me now?

MS. KOZACK: Yes, yes, good morning.

QUESTIONER: My question is also related. Any date when Argentina and the IMF will conclude these conversations?

Thank you?

MS. KOZACK: Okay. And I think we have Martin, also a question on Argentina, is that right?

QUESTIONER: Yeah. Good morning, how are you?

MS. KOZACK: Good morning.

QUESTIONER: I have two questions. One is inflation is running above 100 percent a year in Argentina. Are you worried about a possible hyperinflation in the country?

And, also, regarding the up front disbursements from the IMF, have you talked with the opposition about this issue given this is an election year?

Thank you.

MS. KOZACK: Okay. Thanks very much for those questions on Argentina.

Maybe just to remind of where we stand on Argentina. On March 31 our Executive Board completed the fourth review of Argentina's EFF program, allowing for an immediate disbursement of $5.4 billion. We have been working closely with the Argentine authorities in the context of the program to address a very challenging and complex situation.

On the status of discussions, we have been working closely, as I said, with the authorities in the context of the challenging economic situation, which of course has been exacerbated by the historical drought that Argentina is facing. The focus of the discussions that are underway now for the fifth review has been on strengthening the authorities' program while also taking into account the drought, there are discussions currently taking place. They’re constructive. They are virtual discussions, and we will communicate on Argentina and the outcome of these discussions in due course. I don’t have anything else on Argentina, so let’s move on maybe. Let’s go here.

QUESTIONER:Thank you, Julie. Yaroslav Dovgopal, Ukrinform News Agency Ukraine, so as we know, the IMF plans to conduct the first review of the EFF program for Ukraine this summer. Can you provide the time arranged for this review, as well as the issues the IMF Mission plans to focus in on Ukraine? And the second question, if I may, the current EFF program for Ukraine assumed that authorities would continue reforms for to strengthen governance and anti-corruption frameworks, including through legislative changes. At what stage the IMF expects legislative changes from -- in Ukraine, and how it depends on the situation at the front line. Thank you.

MS. KOZACK: Okay, very good. So we do expect the first review mission to take place later in May. Once we have more details about that mission, we will provide them, but I don’t have any other details. The focus of the mission, of course, will be to assess the authorities’ progress on meeting the policy commitments and conditionality under the program, principally in the areas of fiscal policy, governance, and monetary exchange rate policy, and of course the review will also take into account the recent economic and financial developments and update the outlook and risks to the economy, both under what we call the baseline scenario, but also in the case of Ukraine, we have a down side scenario, as well, so all of that will take place as part of the review. On the question on legislative changes on governance, the authorities have made a very strong commitment and expressed clear timetables for advancing critical legislative changes. These include enacting a law to restore the asset declaration obligations of public officials, and that is expected by end July, amending the anti-money-laundering framework and law by end September, and adopting legislation to enhance the institutional autonomy of the Specialized Anti-corruption Prosecutor’s Office (SAPO) by end December. Thank you. Let’s go here.

QUESTIONER: Good morning. Igor Naimushin, RIA Novosti New Agency, Washington Bureau. Thank you for this opportunity. I would like to ask you about the debt distress crisis in low-income countries and around the world, so could you please provide any details regarding the scale of this problem, the number of countries who are in debt distress situations currently, what are the IMF efforts to solve it, and also, I would like you to emphasize the problem of recognizing debt alongside with bondholders issues. Thank you.

MS. KOZACK: Okay. Thanks very much. So we do see a number of low-income countries facing debt distress. We assess that 15 percent of low-income countries are in debt distress and another 45 percent of low income countries are at risk of debt distress. Our focus has very much been on supporting the countries that are in debt distress. The efforts that we have made to help countries resolve and tackle their debt challenges include a wide range of measure. First, many of these countries have IMF-supported programs, so we’re supporting important policy reforms to help countries restore stability. We are also, of course, supporting the G20 Common Framework which aims to deliver debt relief to countries whose debt is unsustainable and to help advance and accelerate progress with the Common Framework. We, alongside with the World Bank and India as G20 presidency, have established a Global Sovereign Debt Roundtable where we have invited creditors, debtor countries, and when I say creditors, I mean both official creditors, both the traditional official creditors like the Paris Club, but also new official creditors like China, India, Saudi Arabia, and also private sector creditors, along with debtor countries, borrowing countries, all to sit around the table to try to find ways to reach common ground and to accelerate the debt restructuring process for countries whose debt does need to be restructured. Thank you. Let us go briefly online. I have Colby Smith. Colby.

QUESTIONER: Thank you so much for doing this. I wanted to follow up on the debt ceiling. I know its everyone’s kind of, you know, first priority that Congress comes to some kind of agreement here, but it seems like, you know, people are talking increasingly about other measures that need to be considered in the event that lawmakers don’t reach an agreement in time, things like Treasury prioritizing payments, you know, mechanisms that the Fed could use to help, you know, stymie any kind of economic fallout. We also hear things about, you know, the 14th Amendment, the trillion dollar coin. Is there anything, and does IMF have a view on any of these potential stopgaps, you know, beyond just coming to some kind of Congressional agreement?

MS. KOZACK: Thanks very much, Colby. As the Managing Director has said repeatedly, we do think that a U.S. default would have very serious repercussions, not only for the U.S., but also for the global economy, and we do for that reason strongly encourage the relevant parties to urgently reach a consensus to resolve this matter as quickly as possible. Let’s take Eric Martin online, and then we’ll go back into the room. Eric, over to you.

QUESTIONER: Thank you, Julie. I wanted to ask a couple of questions on program negotiations. One is if you can confirm that the IMF is updating its macroeconomic framework and debt sustainability analysis for Zambia to reflect more funding from the IFI, as was originally planned, and would this mean that Zambia requires less debt relief from its creditors than was thought last year? Is it possible to quantify an updated number of how much debt relief Zambia requires? And also on Pakistan, our understanding is that the country has agreed not to pursue a cross-subsidy fuel scheme, but could you talk about the disbursement schedule for Pakistan and whether, given that their program expires at the end of June, whether they would need to have all of that funding disbursed, the 2.6 billion remaining by the end of June or has is rolled into a new program, or how that would work for Pakistan in terms of continuing to receive support from the Fund, given the expiration of its current program at the end of June? Thank you.

MS. KOZACK: Okay, very good. So starting with Zambia, on April 6th, just -- I guess -- a little over a month ago, a staff level agreement was reached for completion of the first review of the ECF. During that mission, as what happened with almost all review missions, staff did update the macro framework and the debt sustainability analysis, including to consider new information from IFIs and IFI financing for Zambia. The details and the impact of those updates will be reflected in the staff report that will be published once the Board considers the request for completion of the first review, and just -- I think it’s important to also just remind that Zambia has met all structural benchmarks and quantitative performance criteria for the first review. On Pakistan, our team is very heavily engaged, of course, with the Pakistani authorities. Because Pakistan, indeed, faces a very challenging situation, the economy is facing stagflation. It also has very large financing needs, and it has also been affected by a series of shocks, including very severe floods. The financing already committed by Pakistan’s external partners is welcome, however, significant additional financing is essential to support the authorities’ policy efforts and to ensure successful completion of the ninth review. That’s all I have for you right now on Pakistan. Let’s go into the room. Let’s go with Lalit, please.

QUESTIONER: If I can follow-up with you on Pakistan because the recent developments of the former prime minister, economies, and the currency --

MS. KOZACK: Can you please use the microphone, please?

QUESTIONER: Thank you. If I can quickly ask a follow-up question on Pakistan because the recent developments of the last few days, what impact this would have on its economy? And then I can come to the question on India.

MS. KOZACK: Okay, so, on Pakistan, all I can say is that we are –- the team is very constructively engaged, of course, with the authorities trying to move the program forward to complete the ninth review. Maybe we can go to India?

QUESTIONER: I’ll come back to India. Where do you see India playing a role in the global and -- Asian economy? And secondly, what is IMF takes on countries like India coming out its own digital currency?

MS. KOZACK: Okay, very good. So, on India, I think we’ve said before and it still is the case that India is a bright spot, both for the global economy and, of course, also in Asia. India is –- has very strong growth, and we do see it as an important player in the region and an important support for the global economy.

On the digital currency in India, what we have seen in India is very rapid progress in developing a digital public infrastructure which has improved financial inclusion, social inclusion, and it has also helped deliver healthcare services. And we do see that there are lessons that could be drawn from India’s experience for other countries.

With respect to a central bank digital currency, what we call CBDC, deciding whether to do a CBDC is, of course, very country specific. There could be benefits from this, but this assessment would, of course, need to take place. But we do see this as something that can be appropriate for some countries. Thank you. Let’s go here.

QUESTIONER: Thank you. A couple questions on Africa, but I’ll keep them all very short. Do you have a read out of the managing director’s visit to Kenya last week? Is there any programs or anything else in the work with the IMF that’s in Kenya? Zambia and creditors were supposed to meet this week; was wondering if, you know, there’s any news or any progress on that front? Tunisia, it looks like there’s progress on the IMF deal despite, you know, what the president had said about not wanting one, so, anything you could, you know, tell us about that on Tunisia, and whether Tunisia seems to be out of the woods now. Ethiopia, have you received or are you expecting to receive any requests for help on post-war reconstruction? And then finally, you know, Ghana’s debt restructuring, what are the milestones that you guys are looking at there? Thank you. So, that’s five.

MS. KOZACK: Okay, very good. Let me start with, we have Kenya. So, indeed the managing director was in Kenya last week. She visited Nairobi, and she had –- she was there for three reasons. One, she had meetings with President Ruto. She also attended the UN Heads of UN Agencies meeting, and she launched an IMF Paper on Trade Integration in Africa. So, on her meeting with President Ruto, she commended President Ruto for the authorities’ vigorous actions to keep the economy vibrant in the face of some very significant headwinds, and she also noted that the IMF’s assessment is that Kenya’s debt is sustainable, and the authorities are moving quickly to improve the country’s fiscal position. Kenya does have an EFF ECF arrangement, and they’ve demonstrated strong commitment to that arrangement. The mission for the fifth review under the EFF ECF has already begun.

On the –- the other main reason she was there was to launch this –- the Paper on Trade Integration in Africa. This paper looks at how Africa could benefit from greater trade integration on the continent. And it finds that there are indeed significant benefits to be had, in particular real incomes -- real per capita income could increase by as much as 10 percentage points –- or 10 percent. And in addition, the paper finds that 30 to 50 million people could be lifted out of poverty with greater trade integration in Africa.

On Zambia, I don’t have anything to add relative to my previous answer with where we are on Zambia.

On Tunisia, wide-ranging economic reforms to secure macroeconomic stability, enhance social protection and equity, and to promote higher growth and private sector-led job creation would benefit Tunisia and its people.

And let me see what I have for you on Ethiopia and Ghana. Okay, so on Ethiopia, I think just for the –- for background, Ethiopia has been subject to multiple shocks, including six consecutive years of drought. It’s also had domestic conflict, and it has also suffered from, of course, the food price shock that came after Russia’s invasion of Ukraine. The economic challenges facing the country are significant, including food insecurity, humanitarian needs, inflation, shortages of FX.

We do welcome the strong progress toward restoring lasting peace in Ethiopia, and we do also welcome the authorities homegrown economic reform agenda. It’s an ambitious reform program that aims to address Ethiopia’s key macroeconomic vulnerabilities, and to unlock Ethiopia’s considerable economic potential.

With respect to IMF engagement, we’ve had an ongoing discussion with the authorities on how we can support their efforts to address humanitarian and economic challenges. We did have an IMF mission in Ethiopia in April, and discussions continued during our Spring Meetings. A new program would require clear commitments from development partners, and financing assurances from creditors under the G20 Common Framework to ensure that it can meet its objectives.

And let’s see on Ghana. So, on Ghana, as you know, on December 12, 2022, we reached Staff Level Agreement with Ghana for a three-year program ECF for about $3 billion. Financing assurances from official bi-lateral creditors are necessary for presenting the program to the Executive Board. We have seen strong progress toward creditors delivering on these financing assurances, and we’re hopeful that they can be delivered very rapidly. Yes, Paula.

QUESTIONER: Thank you. Paula from EFE. I would like to know if you have any update on the outlook for Spain considering that the economic data are better than expected? Thank you.

MS. KOZACK: Thanks, Paula. So, you’re right that the growth outturn in 2022 was certainly stronger than we expected and the same was true of the Q1 data, it was stronger than projected in the first quarter. So, we are seeing some strong economic momentum in Spain. And we will reassess Spain’s forecast as part of the WEO (phonetic) update for the summer.

I can add that if we only looked at the Q1 data, given its strength, it would lead to a mechanical further upgrade for this year. But we will have to, of course, assess prospects for the whole year, which the team will do in -– at the time of the WEO update. Thank you. Yes, right here.

QUESTIONER: Hi, thank you. My name is Ken Sakakibara, from Asahi Shimbun. As you introduced in your remarks, G7 finance ministers meeting is currently taking place in Japan, and G7 summit will follow, and I believe the managing director will attend both meetings. But what kind of discussion do you expect from them, and especially in a current environment that United States banks -– some banks failed because of the severe deposit outflows? We usually call it the (inaudible) because it is happen because of the social media and online banking systems. So, what kind of solution or potential discussion do you expect? Thanks.

MS. KOZACK: Thanks very much. As you noted, and as I said at the introduction, our Managing Director will, indeed, attend the meetings ‑‑ both the Finance Minister and Governors Meeting, and also the Leaders Meeting in Japan. We are looking forward, very much to a constructive set of discussions at the G7 on economic developments, on how to build resilience, and how to improve economic outcomes in their countries and for the world.

We expect that those discussions will be constructive and fruitful; and we do think that the G7 has, of course, a very important role to play in fostering global cooperation to help resolve some of the challenges that the global economy faces. Thank you.

I see we have some questions online on ‑‑ let’s see ‑‑ we have Matthew Lee. Matthew, over to you, please.

QUESTIONER: Sure. Thanks a lot. I was going to ask about Ghana but, instead, I’ll turn next door in Côte d’Ivoire. There seems to be, at least it’s reported there, that although it’s moving toward a program that the IMF is encouraging or requiring, you know, reducing subsidies on food and fuel and replacing them with kind of direct cash transfers. I wanted to know, one, if you can confirm that; and two, what the status is on the Ivory Coast; and, also, more generally ‑‑ I was going to tie this to Argentina, but I’ll say it more generally ‑‑ I’ve heard both, you know, the IMF position on kind of cryptocurrency and things like El Salvador. What can you say about the crypto press is saying that many of these program negotiations involve countries committing to, for example, ban digital assets from payment systems, or various ways of implementing this concern the IMF has about cryptocurrency? Is that true, or is that a scurrilous crypto press rumor about the IMF? Thanks a lot.

MS. KOZACK: Okay. Thanks, Matthew. We’ll have to get back to you on Côte d’Ivoire. I don’t have anything for you here, but we’ll certainly come back to you, bilaterally, on Côte d’Ivoire.

On your question on crypto, I think it’s important, in cryptocurrencies, I think it’s important to distinguish the use of these currencies as a legal tender, which is like a, you know, like a currency as opposed to having them as an asset or, you know, for investment. We do not support the use of cryptocurrencies as legal tender. We don’t think that they have the properties to be legal tender; and this was reported ‑‑ you know, we had some analysis last year which discussed this. However, that is just different from digital means of payments, Central Bank digital currencies. So, it is important to distinguish the types of digital currencies that we’re talking about and also differences between, say, the use of cryptocurrencies as a legal tender versus, let’s say, having an effective means of digital payments; and they are different. So, we can certainly provide the references to the papers that we have written and, I think, they would provide the full range of our views and a good and detailed assessment of the differences between the different types of digital assets, and our views on them.

Let’s go to, I have Daniel Avis, from AFP online. Daniel?

QUESTIONER: Hi, Julie. Can you hear me?

MS. KOZACK: Yes, I can hear you. Welcome.

QUESTIONER: Oh, great. Thank you. Thanks very much for doing this. Just a quick follow on the debt-ceiling question. You mentioned, you know, there’d be serious repercussions not just for the U.S. but for the global economy in the event of a default. I wonder can you talk a bit more about what some of those consequences might be for other countries, particularly developing economies? Thank you.

MS. KOZACK: Thanks very much, Daniel. So, I just want to reiterate that, of course, you know, our ‑‑ that we do ‑‑ on the debt ceiling, we encourage all of the interested parties to come together, reach consensus, to urgently resolve the matter; and, of course, the reason that we’re calling for this is because we are concerned about the severe repercussions for both the U.S. economy, but also the global economy.

One of the repercussions, of course, that we would see, we could potentially see, is higher interest rates, some broader instability and economic repercussions. We’ve seen, for example, just looking at the transition from a very low level of interest rates to a level of higher interest rates, how that is having an effect on the global economy, and is affecting some countries adversely, especially, those countries who are in debt distress and who are already facing vulnerabilities. And, certainly, we wouldn’t ‑‑ and we have seen a world in the last few years that have been affected by many shocks. So, we would want to avoid those severe repercussions, and for that reason, we, again, are calling on all of the parties to come together, reach consensus, and resolve the matter as quickly as possible.

Let’s see. We have Doah (phonetic) and Ahmed (phonetic), who I understand have questions on Egypt.

QUESTIONER: Hello. Good morning.


QUESTIONER: Good morning. Can you hear me?

MS. KOZACK: Yes, we can hear you. We can hear you Ahmed.

QUESTIONER: Good morning, Julie. My name Ahmed (inaudible). I’m from Egypt. It is a (inaudible) Muslim newspaper. I have a question about Egypt. Can you give me any details about the last negotiation between Egypt, Egyptian facilities (phonetics) and the IMF concerning the (inaudible) you were, any expected time this month or any time the first to (inaudible) to the last program between IMF and the Egyptian facilities? Thank you.

MS. KOZACK: Okay. Thank you Ahmed. Is there another question on Egypt?

QUESTIONER: Hello, Julie.

MS. KOZACK: We can hear you.

QUESTIONER: Are you hearing me?

MS. KOZACK: Yes, we can hear you.

QUESTIONER: Yes. I’m pleased to meet you again following the spring meetings during last April. As you know, the ongoing program with the IMF and Egypt is the main concern for the Egyptian streets (phonetic), so my question is similar my colleague Ahmed has asked about the new updates on the last review, or the first review, especially that they’re discussing position regarding this first review hasn’t been scheduled in the Executive Board calendar yet? Thank you, Julie.

MS. KOZACK: Thank you very much. So, on Egypt ‑‑ just stepping back ‑‑ as you know, on December 16th, 2022, the Executive Board of the IMF approved Egypt’s request for a 46-month EFF of about $3 billion. The IMF program that was approved supports the authority’s own reform program, which aims to address vulnerabilities, strengthen social safety nets, and promote sustainable and inclusive growth, and job creation.

In the challenging global environment, boosting confidence is going to be critical for Egypt. I believe that we, our team, released a statement in April on Egypt and we don’t have anything to add relative to that statement.

Let me see if we have anyone else online. Anyone else? Let’s go back to the room, maybe. Over here; yes, Bridgette?

QUESTIONER: Hi. Bridgette Riley from GG Press. Just two questions. One, since the Fed’s rapid tightening, and we’ve seen this turbulence in regional, all U.S. banks, we’ve also been hearing about credit tightening and the possibility of a credit crunch. Could you talk a little bit about the impacts that this could have, any kind of credit crunch or credit tightening on the global economy; and then, two, we’ve also been hearing a lot about, from G7 countries, about rebuilding their supply chains to be more resilient and concepts such as friendshoring. And what recommendations does the IMF have for G7 countries on how to make sure that emerging economies and low-income countries are included in, and involved in, their plans to create more resilient supply chains. Thank you.

MS. KOZACK: Okay. Thanks so much. Starting with the question on the regional banks in the U.S. So, we have seen, obviously, some vulnerabilities in some banks in the U.S. We welcome the authority’s decisive

steps to address those risks. The situation in the U.S., of course, is marked by some uncertainty. At the same time, we have seen resilience in the labor market in the U.S. and in some of the underlying economic figures. So, on the U.S. I think the bottom line is right now, our April WEO forecast remains relevant. And of course, we will be shortly conducting the Article IV Consultation for the U.S. and all of these issues particularly, the impact of the regional banks and any tightening of financial conditions, of course, will be thoroughly assessed as part of that Article IV.

On the question on friendshoring, I -- and the resilience of supply chains we have done quite a bit of analysis on the implications of fragmentation for the global economy. First, I think it is important to recognize that the pandemic has demonstrated that there is a need to improve resilience of supply chains. And we are, of course, encouraging countries to look at that very carefully.

In our work on fragmentation, we've also seen that there is quite a range of potential outcomes. If fragmentation is kept to a minimum, we see that the impact could be 0.2 percent of global GDP, or the cost of fragmentation could be 0.2 percent of global GDP. But if we move into the realm of more extensive or runaway fragmentation, the cost could be as high as 7 percent of global GDP. And if we add technological decoupling, the cost could rise to 12 percent of GDP for some countries.

So, we are encouraging countries when they look to strengthen their supply chain to do this on the basis of economic logic, as our managing director has said. And to limit these costs very much to the lower end of that bound to ensure that the global economy remains strong and robust.

And anyone else here? Yes.

QUESTIONER: Yeah, thanks a lot. So, my last question could be about Black Sea Grain Initiative (phonetic). I know that there are currently task discussions in Turkey. So, in case if there is a failure of Black Sea Grain Initiative, what could be the repercussions for global economy, for food and security for low-income countries and as well for advanced economy? Thank you.

MS. KOZACK: Thank you very much. I think on the Black Sea Grain Initiative, what I can say is that it has obviously been an important way of providing food to the global economy. And many countries, of course, are indeed facing issues of food insecurity. So, from our perspective, it is very important that all measures that can be taken are taken to help reduce food insecurity and to really help the most vulnerable members of our global community to overcome this very difficult challenge of food insecurity.

Let me go online now. I have Eric Martin, and then Kemi Osucoyo (phonetic). Eric, and then Kemi.

QUESTIONER: Thank you, Julie. I have one question for you on Sri Lanka which is whether the country needs to have its debt negotiations completed by the time of its first program review schedule for September in order to receive that disbursement or whether having assurances is enough to receive the disbursement and whether debt negotiations can still be ongoing by that point.

One, and also two, I know several of my colleagues have had questions about the U.S. debt ceiling. Is there any way to quantify the impact? I know that you had global growth at about 2 percent, excuse me, 2.8 percent for 2023. Is there a way to measure what would be the impact on the WEO or any of your top line forecasts from a U.S. debt default? Thank you.

MS. KOZACK: Okay. Thanks so much, Eric. So, on Sri Lanka, an IMF team is vi visiting Sri Lanka during May 11 through 23 as part of a kind of interim visit ahead of the first review. And the first review mission will take place later this year. As background on March 22nd the IMF Executive Board approved a 48-month extended arrangement, an EFF for $3 billion to support SRI Lanka's economic policies and programs.

So, just to clarify on the mission, there will be a mission. It is what we call a staff visit. It's a technical mission and the first review of the program will take place later. Sri Lanka is on what we call semi-annual reviews, two reviews per year. And since the program was approved in March the next review would be expected roughly six months after that. The exact review timetable is in the staff report that has been published.

And Eric, on your question, on the debt ceiling, we don't have, that I'm aware of, any quantifications at the moment. Let me go online. I have Kemi.

QUESTIONER: Good morning. Can you guys hear me?

MS. KOZACK: Yes, we can hear you.

QUESTIONER: Okay. Thank you very much for taking my question. I wanted to ask you regarding the new president of the World Bank, can you tell us if the managing director have met with him? And if you can, also tell us what that discussion is? And if she hasn't, when do expect that to take place?

MS. KOZACK: Thank you very much, Kemi. As our managing director has already noted, we extend our warm welcome and congratulations to Ajay Banga as new president of the World Bank. Our institutions are, of course, very committed to working closely together to find solutions that the global economy faces both today and in the future. And of course, collaboration between the two institutions is essential to support our membership, particularly during these challenging difficult times. We look forward to building strong ties under Mr. Banga's new leadership, and we particularly look forward to collaborating with the World Bank on issues such as debt restructuring, food insecurity, climate change, and of course, fragile states.

Let's go to Shabtai and then Raphael.

QUESTIONER: Thank you. Just quickly on Surinam. I know it's a small country, but the macro fiscal framework that the IMF will have to work out there as part of the deal is getting a little bit of attention just because of what possible other -- what do we mean for other debt distress countries. Could you give us any timeline on what will happen with Surinam and how you expect the debt treatment then to sort of play out and whether there'll be an IMF program?

The other question just, again, on the debt ceiling do you expect there to be any impact of this on global borrowing costs specifically? Thank you.

MS. KOZACK: Thanks very much, Shabtai on Surinam, we'll have to get back to you bilaterally. I don't have any update right here. And on the dead ceiling, just to reiterate, we do expect that the repercussions would be quite severe for the U.S. and the global economy. And of course, those severe repercussions could include higher borrowing costs.


QUESTIONER: Yeah, thanks Julie. Just a quick follow-up on Argentina. A clarification, there are no planned meetings in person either in Washington or Argentina for the coming weeks?

MS. KOZACK: Right now, the discussions are taking place virtually. And when we have any further information on in-person discussions, we will communicate at that time. And I think with this we will bring it to a close. Thank you all very much for joining us. It's actually really nice to have everyone here in person. So, it's really nice to see you all. So, thanks so much. Briefing again is embargoed until 11:00 a.m. The transcript will be available later on And in case of clarifications, please reach out to and we will get back to -- on Surinam and Côte d'Ivoire bilaterally. Thanks very much everyone. Have a great day.

* * * * *


I, Carleton J. Anderson, III do hereby certify that the forgoing electronic file when originally transmitted was reduced to text at my direction; that said transcript is a true record of the proceedings therein referenced; that I am neither counsel for, related to, nor employed by any of the parties to the action in which these proceedings were taken; and, furthermore, that I am neither a relative or employee of any attorney or counsel employed by the parties hereto, nor financially or otherwise interested in the outcome of this action.

Carleton J. Anderson, III

(Signature and Seal on File)

Notary Public in and for the Commonwealth of Virginia

Commission No. 351998

Expires: November 30, 2024

IMF Communications Department


Phone: +1 202 623-7100Email: