Transcript of IMF Press Briefing
IMF News, September 28, 2023
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- Authors: Investment Program
- Published: September 28, 2023
Annual Meetings in Marrakesh, Morocco
- Date of briefing: September 28, 2023.
- Meetings scheduled: 2023 Annual Meetings in Marrakesh, Morocco from October 9 to 15.
- Context and decisions:
- Condolences expressed for the earthquake in Morocco (September 8) and floods in Libya.
- After review with Moroccan authorities and the World Bank, management agreed to proceed with holding the Annual Meetings, adapting content to circumstances.
- Key consideration: ensure meetings do not hamper relief and reconstruction efforts.
- Journalist registration advised before September 29 (especially if visa required).
- Program and events:
- Preliminary meeting schedule available on the website and still being finalized; adjustments to be communicated through normal channels.
- Managing Director’s curtain-raiser speech: Thursday, October 5 in Abidjan, Côte d’Ivoire (introductory remarks by President Alasane Ouattara; fireside chat with the Minister of Economy and Finance of Côte d’Ivoire; Q&A follows).
- Possible inclusion of community service and corporate social responsibility events; final details pending.
- Morocco-specific support and actions:
- IMF and World Bank worked closely with Moroccan authorities on readiness to hold meetings.
- Board meeting later today to discuss Morocco's request for support under the Resilience and Sustainability Trust.
- IMF stands ready to provide assistance to Libya as needed.
IMF Publications, Schedules, and Communications
- Flagship reports (WEO, GFSR, Fiscal Monitor) to be released during the Annual Meetings, with analytical chapters ahead of the meetings.
- Media relations to share a detailed advisory on publication schedule in coming days.
- Regional Economic Outlook for the Western Hemisphere (including the Caribbean) to be released on October 13th at 3:45 Morocco time; 10:45 Eastern time (press conference scheduled).
Institutional priorities and financing
- Since the pandemic, IMF actions highlighted:
- Injected $1 trillion in liquidity and vital financial support to membership.
- Lending to nearly 100 countries.
- Historic SDR allocation (not quantified further in this transcript).
- Two institutional priorities emphasized by the Managing Director:
- Complete the 16th General Quarter Review.
- Close the PRGT subsidy gap to allow continued zero interest rate lending to poorest members.
U.S. fiscal and monetary outlook
- Government shutdown risk:
- IMF urges parties to reach consensus and find a way forward on funding the U.S. government; views a shutdown as an avoidable risk.
- Briefing embargoed until 11:00 a.m.
- Monetary policy stance:
- A less synchronous global monetary policy environment observed; appropriate country-specific responses advised:
- Where inflation is high and persistent: retain restrictive policies.
- Where inflation is approaching target: move to neutral stance.
- Where inflation has fallen below target: easing may be appropriate.
- Upcoming assessments:
- WEO, GFSR, and Fiscal Monitor updates to be released in about ten days, providing comprehensive outlooks including U.S. impacts.
Argentina
- Program status and economic conditions:
- Situation characterized as challenging: inflation "high, very high, and it's rising"; reserve buffers low; social conditions fragile.
- Recent measures by Minister Sergio Massa require assessment; IMF is working to understand impact and possible offsetting actions.
- Exchange rate realignment, tight monetary and fiscal policies are essential components of the program agreed in recent combined fifth and sixth reviews.
- Review timing:
- Too early to specify timing of next review; IMF aims to continue engagement to help safeguard stability and protect the vulnerable.
- Dollarization:
- Determination of exchange rate regime is prerogative of sovereign; IMF concerned that dollarization requires important preparatory steps and is not a substitute for sound macroeconomic policies.
China, trade tensions, and global growth projections
- Near-term:
- Recent slowdown since Q1 with mixed recent data; some signs of stabilization.
- IMF expects China to meet its 2023 growth target of around 5 percent.
- Medium-term:
- Expectation that China's growth will slow to around 3-1/2 percent over the medium term due to demographic headwinds and slowing productivity growth; higher growth is considered within reach with appropriate policies.
- Trade and technology tensions:
- While national security reasons can justify trade actions, such restrictions often carry significant economic costs domestically and abroad.
- Critical minerals are essential to scaling up the green transition; IMF advises avoiding harmful trade restrictions that delay climate mitigation and impose unnecessary costs.
- Role of G7:
- Viewed as important for fostering global cooperation to resolve economic challenges.
Crypto-assets and regulation
- Joint paper with the FSB released around G20:
- Concludes global standards are needed.
- Recommends policies for macroeconomic stability, safeguarding monetary sovereignty, attenuating excessive capital flow volatility, appropriate tax treatments to address fiscal risks, and monitoring impact on the international monetary system.
- Calls to close data gaps through reporting requirements to improve consumer protection and financial stability.
Fragile states, coups, and IMF engagement in the Sahel and other regions
- Noted resurgence of coups in some countries, mostly in Africa and particularly the Sahel region, symptomatic of long-standing political and economic fragilities.
- IMF role:
- Continue engagement via policy advice, capacity development, and financing.
- Recent strategy for fragile and conflict-affected states underscores importance of staying engaged to address humanitarian challenges, social exclusion, insecurity, and lack of basic public services.
Africa: country-specific updates and regional outlook
- Zambia:
- August 2022: Executive Board approved a $1.3 billion ECF with Zambia.
- Zambia reached agreement with its official creditor committee on debt treatment on June 22nd.
- Completion of a review in July 2023 reflected strong program performance (met quantitative performance criteria; reduced inefficient public spending).
- IMF calls for advancement of debt restructuring and hopes Memorandum of Understanding completed soon to allow debt treatment implementation.
- Ghana:
- May 2023: Board approved a three year, $3 billion ECF; $600 million disbursed immediately.
- Mission currently in Accra for first review; aim to present review to Executive Board in November.
- Program objectives: restore macro stability, ensure debt sustainability, and lay foundations for higher, more inclusive growth.
- Next debt restructuring steps: Official Creditor Committee agreement on modalities and engagement with external private creditors.
- Ethiopia:
- Multiple shocks: six consecutive years of drought, pandemic, domestic conflict, impact of Russia's war in Ukraine.
- IMF received a request for financial assistance; discussions underway on economic policies and reforms for potential IMF support.
- A program would require commitments from development partners and financing assurances from creditors under the G20 common framework.
- Sub-Saharan Africa region:
- Referred to as experiencing a "big funding squeeze": succession of shocks, food insecurity, and tightening global financial conditions with high public debt in many countries.
- Regional Economic Outlook forthcoming with more detail.
Caribbean, Haiti, and Citizenship-by-Investment (CBI) concerns
- Caribbean outlook:
- Growth lagging other subregions as tourism recovery remains incomplete.
- Vulnerabilities: global slowdown risk, tightening global financial conditions, and public debt above pre-pandemic levels in many economies.
- Policy needs: fiscal consolidation, growth-enhancing structural reforms, investment in climate adaptation, and stronger regulation/supervision of credit unions.
- Haiti and migration:
- IMF position described as standing ready to assist; briefing deferred to regional economic outlook and bilateral follow-up for additional detail.
- CBI programs:
- Concerns noted about challenges from U.S. Congress and EU; IMF to follow up and provide information bilaterally.
Ukraine
- Technical mission:
- Mission led by Gavin Gray underway conducting technical discussions to prepare for the 2023 Article IV consultation and the second review under the EFF arrangement.
- IMF will communicate more at the end of the technical mission.
- Reconstruction:
- No immediate IMF information on World Bank damage/reconstruction assessment in this briefing; IMF to follow up if information becomes available.
Quotas, PRGT, BRICS, and global governance
- Quota reform and resources:
- Importance stressed of reaching agreement to increase IMF quota resources before year-end as part of the 16th General Quota Review (referred to in the briefing as the 16th General Quarter Review).
- Closing PRGT subsidy gap emphasized to maintain zero interest lending to poorest members.
- An increase in quota-based resources would scale up predictable quota-based resources and reinforce IMF’s role at the center of the global financial safety net.
- Voice and representation:
- Membership discussions expected on expanding Executive Board representation (including proposals such as an African chair) and other reforms to improve voice and representation.
- BRICS and New Development Bank:
- IMF welcomes improved and expanded international cooperation and deeper trade/investment ties among groups of countries that reduce market fragmentation and trade costs.
- Warns against fragmentation of the global economy, estimating potential global GDP losses from fragmentation (figure cited: 7%).
- Supports fora that foster cooperation and solutions that help global economic outcomes.
Country brief notes (selected)
- El Salvador:
- Article IV concluded March 2023; staff maintains open dialogue on fiscal consolidation composition and pace, and risks from bitcoin adoption.
- Suriname:
- No update in this briefing; IMF to follow up bilaterally.
- Pakistan:
- July 12th: Program approved — a 9 month Stand-By Arrangement for $3 billion to support economic stabilization.
- Program objectives: address domestic and external imbalances; provide framework for donor support and debt rollovers; implement FY2024 budget; monetary policy to bring down inflation; reforms to improve energy sector viability.
- Social protection, public financial management, tax administration, and prioritizing public investment are part of program design.
- Managing Director’s message: place burden on wealthy segments and increase tax-to-GDP ratio; protect poor and vulnerable.
- El Salvador, Suriname, Nigeria, Benin, and other country updates:
- Several country updates deferred; IMF will provide bilateral follow-up or include detail in upcoming regional reports.
Transcript of IMF Press Briefing, September 28, 2023. IMF Communications Department.