Transcript of IMF Press Briefing

September 28, 2023

MS. KOZACK: Good morning and welcome to this press briefing. Both to those here with us today and those of you joining us online. I'm Julie Kozack, Director of Communications at the IMF.

This briefing is embargoed until 11:00 a.m. Eastern time.

We'll start with some announcements and then we'll take your questions in person, in Webex and on the press center.

First, let me start by extending once again our sincere condolences for the devastating loss of life caused by the recent earthquake in Morocco and the catastrophic floods in Libya. Our hearts are with the victims of the tragedies and their loved ones. And, as you have seen, based on a careful review of findings, the managements of the World Bank and the IMF, together with the Moroccan authorities, have agreed to proceed with holding the 2023 Annual Meetings in Marrakesh, Morocco from October 9 to 15, adapting the content to the circumstances.

Since the devastating earthquake in Morocco on September 8 the IMF and the World Bank have closely worked with the authorities to assess the situation and the city's readiness to hold the meetings. In doing so, a key consideration for all of us was to make sure that the meetings would not hamper vital relief and reconstruction efforts that are underway. Having been assured of that, we are eager to be in Morocco this month and to stand in solidarity with Morocco and to highlight the strength of the Moroccan people.

And as a reminder, journalist registration to attend the 2023 Annual Meetings is still open. It is advised to register before September 29, tomorrow, especially if you need a visa. You can visit the Annual Meetings website to register and you will find press FAQs there as well.

Now, coming to a few other announcements. As usual, we will be releasing our flagship reports, the WEO, the GFSR, and the Fiscal Monitor during the Annual Meetings and their analytical chapters ahead of the meetings. Our media relations team will share a detailed media advisory on the publication schedule in the coming days, so please stay tuned. And we also encourage you to check out the latest schedule of meetings on IMFconnect as well.

Ahead of the Annual Meetings, on Thursday, October 5, the Managing Director, Kristalina Georgieva, will be giving what we call our curtain raiser speech, which as you may know, lays out the policy priorities ahead of the Annual Meetings. The speech will be delivered in Abijdan, Côte d'Ivoire with President Alasane Ouattara of Côte d'Ivoire, will deliver introductory remarks, and it will be followed by the Managing Director's speech. The event will include a fireside chat with the Minister of Economy and Finance of Côte d'Ivoire, and a Q&A session will follow.

More details on how to access the event will be shared by our media relations team.

Finally, I'll give you an update on upcoming management travel. The Managing Director will travel to Saudi Arabia to participate in the Future Investment Initiative Conference and she will hold bilateral meetings with the Saudi authorities. That will be later in October. Also later today we will release our 2023 IMF Annual Report on our website. It highlights the work of the executive board, IMF management, and staff in supporting our member countries to address economic challenges through the fiscal year, May 1, 2022 through April 30, 2023.

And I'll stop there with my very extensive opening remarks and now turn to you for some questions.

Thank you very much.

Okay, let's go ahead.

QUESTIONER: Thanks for doing this. Thank you so much.

I wanted to ask you a couple of questions about Morocco and the meetings there. And you've said that you're going to adapt, you know, in the context of the earthquake. So can you tell us how the meetings will be different this year than they might have been if there hadn't been an earthquake? What changes specifically will you do?

And then also in looking at the situation there, both in Morocco and Libya, I'm wondering if you are concerned that there could be enhanced potential for social unrest, particularly in Libya, which has had a difficult time of it lately and what specific measures the IMF is offering both of those countries at this point.

And the, finally, if you could just say a word about the looming U.S. shutdown and the other risks to the U.S. economy and how seriously you are evaluating that, including, for instance, the UAW strike.

Thank you.

MS. KOZACK: Okay. Thanks.

So let me just – are there any other comments or questions on the Annual Meetings? Maybe I'll try to go by grouping.

Yes, here.

QUESTIONER: Hello, everyone, my name is Bouchra AZOUR. I work for the Moroccan News Agency here in Washington, D.C.

I have two questions, the first one concerning the Annual Meetings. How can these Annual Meetings in Marrakesh help shed the light on the importance of building a solidarity in order to help Africa and developing countries in general build resilient responses to world's climate phenomena?

And the second question will be regarding your recent statement. Are there any updates concerning these Annual Meetings?

Thank you.

MS. KOZACK: Okay, very good. Anything else on the Annual Meetings? I see a few hands up on Webex. Is there anything on Annual Meetings? No. Okay.

So let me start with the Annual Meetings.

So for quite some time we've talked about the Annual Meetings as bringing Morocco to the world and bringing the world to Morocco. After more than five years of hard work and preparations, because you will recall that the Annual Meetings were originally scheduled to be held in Marrakesh in 2020 and, of course, they were postponed because of the pandemic. So after those five years of hard work, I'm confident that these meetings will showcase the strength of Morocco, the Moroccan people, and the Moroccan authorities.

It's also an opportunity, of course, to bring the global community together. This is the first time in 50 years that the Annual Meetings will be held on the African continent. It's a consequential moment for our global membership. The world's economies are gradually healing from a series of shocks, pandemic, Russian's invasion of Ukraine, cost of living crisis, climate events on every continent. And so we see this as a time to bring the global economy together, to bring global economic leaders together to discuss how we can come together as a global community to overcome these challenges, with are particularly affecting low-income and vulnerable countries. And that we see as a major topic for the meetings.

In terms of how the meetings may adapt, we are of course conducting the meetings very mindful of the need to be respectful to the people of Morocco and the preliminary meeting schedule is available on the website, but it is still being finalized. So we will communicate on that through the normal channels. But it is, of course, important that we are respectful of the situation in the country, but also take the opportunity to showcase the strength of the people of Morocco as they confront this very challenging situation.

And, finally, I would say on the question on resilience, climate, this is obviously a very important issue for the global economy in the face of multiple shocks in a shock prone world. Countries have had to build resilience and to confront many shocks. Much has been done, including by the IMF. For example, since the pandemic, we have injected $1 trillion in liquidity and vital financial support to our membership. And this includes lending to nearly 100 countries, as well as our historic SDR allocation. But, of course, more needs to be done, and this is going to be a major topic of discussion and we look forward to having these discussions with our membership. It means demonstrating agility to meet the evolving needs of our member countries.

And here I would highlight two issues that are important to us as an institution and which have been highlighted by our Managing Director. The first is her call on our membership to complete the 16th General Quarter Review, and the second is her call on our membership to close the PRGT subsidy gap to allow us –– PRGT of course is our lending instrument to low-income countries –– and closing this financial cap will allow us to continue to provide zero interest rate lending to our poorest members.

Andrea, you also asked specifically about Morocco and Libya. I can tell you that for Morocco, later today there will be a board meeting to discuss Morocco's request for support under the Resilience and Sustainability Trust.

And on Libya, of course we stand by to provide the Libyan authorities with any assistance that they need.

Turning now ––Andrea, you had a question on the U.S. shutdown. Any other questions on the U.S.? Yes.

QUESTIONER: Thank you very much for taking all my questions.

My question is on whether there is a (inaudible) and what is your recommendation for Fed at the moment? And the second is on appreciation of the U.S. dollar. And what is your analysis of that impact on not only global economy, not only low-income emerging economies, but also, for example, on Japan?

Thank you.

MS. KOZACK: Okay, thank you. Any other questions on the U.S.? Okay. Let me start with this.

So on the prospects or the possibility of a government shutdown, we of course urge the parties to reach a consensus, to come together to find a way forward on funding of the U.S. government.

And on the question of U.S. monetary policy, first I would highlight that we do have our WEO, GFSR, and Fiscal Monitor, which will be release in ten or so days. And they will of course offer a full and comprehensive update on the outlook and on policy since our July updated.

More generally, though, we are in a less synchronous monetary policy environment as inflation outcomes have started to diverge among countries. And with this mind, of course it's appropriate for monetary policy to respond to country specific inflation outcomes and developments. So in countries where inflation is still high and persistent, central banks should retain their restrictive monetary policy and where inflation is clearly approaching target, central banks should move to a more neutral stance, and, finally, where inflation has fallen below target, it may be appropriate for countries to countries and central banks to ease monetary policy.

Okay, let's go for Argentina.

QUESTIONER: Thanks, Julie. There's a bit of ground to cover since the last review.

I want to ask you about the latest measures announced by Minister Sergio Massa. After the conclusion of the last review Minister Massa has been on a spending binge trying to get elected president of Argentina. Some of the measures that he announced go against what he agreed with the IMF. I wanted to know the IMF's opinions on the measures and if the upcoming review is planned to go on as expected or if communications between the government and the staff have gone cold.


MS. KOZACK: Okay. Thanks, Rafael.

QUESTIONER: Thank you, Julie. Good morning.

MS. KOZACK: Good morning.

QUESTIONER: The IMF staff have been talking with Javier Milei in Argentina. I would like to know what they think about dollarization and also if it is a good tool for stabilizing the economy.

Thank you.

MS. KOZACK: Okay, great. Thank you.

And on line, any questions on Argentina?

QUESTIONER: Hi, good morning. Thank you for taking my questions.

My question is related to when is the mission coming to review the staff report from November? And if the program with Argentina is still ongoing?

MS. KOZACK: Okay, thanks, Liliana.

Any other questions on Argentina? Okay.

So, on Argentina, the economic situation remains very challenging and complex. Inflation is high, very high, and it's rising.

Reserve buffers are low and social conditions are fragile. The Authority's policy package, agreed in the context of the recent combined fifth and sixth reviews, was aimed at safeguarding stability through rebuilding reserves, restoring fiscal order, and also protecting the most vulnerable. The exchange rate realignment, along with tight monetary and fiscal policies, are essential components of the program.

The recently adopted measures and announcement add to Argentina's challenges. We are working to better understand and assess the impact of the recent measures, and the need for offsetting actions that could be taken to strengthen stability and safeguard program objectives while not adding to future vulnerabilities. Our objective remains helping Argentina to safeguard stability and protects the most vulnerable during these challenging times.

It is in the interest of the Fund, and its membership, to continue working together with Argentina with as broad a political and social consensus as possible to help secure stability and shared prosperity for the country.

On the question of the review, specifically, it's too early to speculate on the precise of the timing of the next review and, as I noted, of course, it's in our interest and the interest in our membership to continue to engage and work closely with Argentina.

And on your question on dollarization, determining an exchange rate is the prerogative of an individual sovereign nation. That's the Fund's general view. When we discuss this with countries, our primary concern is to ensure that macroeconomic policies are consistent with an orderly transition between exchange rates should the sovereign authorities decide that that's the way they want to go. It's also important to assure the long-term viability of the exchange rate system that is ultimately chosen. In this regard, dollarization requires important preparatory steps and it is not a substitute for sound macroeconomic policies. Okay, let's move on. Yes, here in the front?

QUESTIONER: Thank you. I'm Maoling Xiong with China’s Xinhua News Agency. Firstly, I want to follow up on Andrea's question on the U.S. economy. So, I wonder whether ‑‑ how big is it impacted on the U.S. economy. Do you consider a looming U.S. Government shutdown and also the autoworker's strike. Have the IMF factored in those things in the expected protection for the U.S. economy in these upcoming (inaudible)?

Secondly, on the Chinese economy, I think there is some discussion on the situation in the Chinese economy. Some people say that maybe the Chinese economy has already bottomed out. The next half year would be better; but others say that maybe the Chinese economy still might have slower growth in the second half of the year. So, I wonder what's the IMF's evaluation of the situation on the Chinese economy? Thanks.

MS. KOZACK: Okay; thank you. While we're on China, any other questions on China? Yes, here in the back?

QUESTIONER: Good morning. My name is Konstantinos Spiliotopoulos. I'm with Ashahi Shimbun, Washington, D.C. Bureau. Thank you for doing this briefing. So, my question is, in August, the U.S. Government announced new investment restrictions on China in the areas of semiconductors and quantum computing. Meanwhile, China has announced restrictions on exports of several critical metals, likely in retaliation for the U.S. semiconductor restrictions. How do you think this conflict over technology between the U.S. and China will affect the global economy. Thank you.

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.

MS. KOZACK: Okay; very good. Thank you. Any other questions on China? Okay. So, first on the U.S. economy. I reiterate that we encourage the parties to come together, to reach consensus, on ways to fund the U.S. Government. On specific impact on the U.S. economy, I would refer you to our WEO which will be announced in about ten days, and that will have a comprehensive assessment of the U.S. economy.

QUESTIONER: You said this twice now, where you're saying you're urging the parties to reach consensus on funding the Government. Are you urging them to avoid a shutdown, specifically?

MS. KOZACK: Well, we, certainly are urging the parties to come together to reach a consensus and find a way forward. We do see shutdown as an avoidable risk for the U.S. economy.

On China, what we have seen recently is a slowdown in the economy since the first quarter. However, the very recent data has been a bit more mixed, with some signs of stabilization. We do continue to expect that China will meet its growth target of around 5 percent in 2023, and the detailed projections will be provided in our WEO update.

Over the medium term, we expect that China's growth will slow to around 3-1/2 percent against the backdrop of demographic headwinds and slowing productivity growth; but we also think that higher growth over the medium term is within reach for China. China should seize the opportunity to rebalance its economy through short term macroeconomic policy support and medium-term reforms.

And then on the question on trade and semiconductors. I would respond as follows: While there can be legitimate reasons for such trade actions, either for national security reasons or to secure supply chains, they also come often with significant economic cost at home and abroad. Critical minerals are essential to scaling up the green transition; and it is our view that countries should avoid harmful trade restrictions that would delay climate mitigation and impose unnecessary costs on other countries, including poorer nations; and, instead, policy should aim at improving infrastructure logistics and reducing trade costs.

Okay. Yes, in the back, please.

QUESTIONER: Good morning.

MS. KOZACK: Good morning.

QUESTIONER: I have a couple of questions relating specifically to the Caribbean region. I want to start first, quickly with the ‑‑ a number of member states of the Caribbean brought the issue, and they laid out the challenges surrounding Haiti at the United Nations. What is the IMF's measurement position when it comes to the challenges currently impacting Haiti because all these member states are saying it's directly affecting them because there's the illegal migration. For example, recently there was one in (inaudible) where a boat, they had to rescue a number of migrants. So, what's the position there because they're saying it's a burden on them to continue to sustain migration, the illegal migration population.

QUESTIONER: Second question. OECS member states on Outlook ‑‑ I don't know if you have data. You can share what's the outlook for the remainder of 2023; but in terms of the CBI programs, a number of them are dependent on these programs but it's facing challenges, especially from the United States Congress and the European Union. What's IMF's position on these member states of the OCS being dependent, or still being dependent, on the Citizenship By Investment Program; and, also, at the United Nations, member states complained about the measurement and yardstick being used to gauge them when they're coming to borrow, especially after disasters. Is there any consideration in terms of changes in terms of the measurement and the criteria being used by the IMF in terms of lending to these member states?

MS. KOZACK: Okay; very good. Any other questions on the Caribbean? Okay. So, I'll start with the broad outlook for the Caribbean; but, of course, I will refer you to our upcoming WEO and, specifically, we will release our regional economic outlook which will cover the Western Hemisphere, including the Caribbean nations. That will be released on October 13th at 3:45 Morocco time; 10:45 Eastern time; and there will be a press conference as well. So, it will be an opportunity to ask specific questions. I'll share with you what I have for now.

Based on the outlook for the Caribbean that we presented in the spring, the Caribbean economies growth is still lagging other subregions as tourism has yet to recover to the pre-pandemic levels. These countries also remain vulnerable to a global economic slowdown, and to a tightening of global financial conditions. Moreover, public debt remains high and above pre-pandemic levels in many Caribbean economies. Reducing debt and rebuilding buffers to respond to future shocks will require a mix of fiscal consolidation and growth enhancing structure reforms. Accelerating investment in climate change adaptation and the green transition is essential; and the regulation and supervision of credit unions also need strengthening given their growing importance in some countries.

And on your other specific questions on citizenship by investment and Haiti, I would refer you to the regional economic outlook discussion. In the meantime, I will follow up with my colleagues, and we'll give you some, whatever information we have right now, bilaterally. Okay, Eric.

QUESTIONER: Thank you, Julie. I wanted to ask about two country questions on Zambia. If you can say how close Zambia is to signing a Memorandum of Understanding with its official creditor committee; and if there's any risk of delays holding up the next disbursement from the IMF? They had been set for around October 1st, according to the program schedule.

On Ukraine, if there is a date for the Mission to begin its work? And then, finally, if you can preview for us if they'll be any programming or any events, or visits around the disaster and recovery in Marrakech and in Morocco? I know that in 2018, I believe, Managing Director LaGarde visited the site of an earthquake in Indonesia, and whether we could expect anything similar from the Managing Director or, together, perhaps with the World Bank President, but can speak to the Managing Director in Marrakech and Morocco? Thank you.

MS. KOZACK: Any other questions on Zambia? Okay. Let me start with Zambia. So, as you know, the IMF Executive Board approved a program, an ECF, with Zambia in August of 2022. It was for $1.3 billion. Most recently, Zambia reached an agreement with its official creditor committee on a debt treatment on June 22nd, providing sufficient financing assurances for our Executive Board to consider at the first review; and that review was completed in July of, just 2023, just a couple of months ago.

The completion of the review reflected Zambia's strong performance in implementing its Fund-supported program, including meeting all quantitative performance criteria, reducing inefficient public spending and creating space for increased social spending and investment in human capital.

We are calling for advancing the debt restructuring properly, and we hope that a Memorandum of Understanding is completed soon so that the implementation of the debt treatment can proceed quickly.

Turning to Ukraine. Any other questions on Ukraine? Yes?

QUESTIONER: So, just to follow up, when the IMF Board's decision on the next transfer is going to take place, and are there any concerns from the IMF that Ukraine will need supplemental support in addition to all current program? Thank you.

MS. KOZACK: Okay. Yes, Andrea?

QUESTIONER: Can you say anything about the Ukraine conference and whether you have any updates? I mean this would be the World Bank that would do it, but on the damage estimates, in terms of reconstruction needs?

MS. KOZACK: Okay; thanks. So, on Ukraine, we have a Mission, led by Gavin Gray, that is underway now. It is holding technical discussions with the Ukrainian authorities on recent developments, as well as fiscal, financial, and structural policies. These technical discussions are to prepare for both the 2023 Article IV consultation, as well as the second review under the EFF arrangement; and we will be communicating more on Ukraine at the end of that technical mission we do not have -- and on the conference, I don't have any information on the World Bank's reconstruction assessment. I don't have anything for you on that one. Not off the top of my head. But we can follow up and try to get back to you if we have anything.

Okay. Maybe let's go online. Yes, Eric? Oh, I'm sorry. On Marrakesh I skipped your question. I apologize. So on Marrakesh, we're still finalizing the program. We have some information on the website, and I would say just stay tuned. And as we finalize the program, including any community service events, corporate social responsibility events, we will be sure to include those. Thank you. Apologies for

QUESTIONER: When do you anticipate your (inaudible)? Will it when will that be large?

MS. KOZACK: Hopefully very soon. We're working very intensively with the authorities on ensuring that we're fully prepared for Morocco and also any adjustments that we find to be appropriate. Okay, let's go to online. I see I have Matthew Lee, let's start with you. Sure.

QUESTIONER: Thanks a lot. Matthew Lee, Inner Press. Thanks for taking the question. I have two coups and crypto, but I'll go in different order. The Deputy Managing Director on the margins of the G20 said that, among other things, that it's tough to ban crypto and that she expects that it'll be better with better data and transparency. So as the FDX Sam Bankman free trial starts here, I'm wondering, can you say more on what she said and what this better transparency would consist of? And also I saw the program with Burkina Faso, and so I'm just wondering what's the status of the IMS discussions with and programs with other coup governments like in Niger, Mali and now Capone? Thanks a lot.

MS. KOZACK: Okay, thank you. So starting with crypto, so at the G20, we did release or right before the G20, we released a joint paper with the FSB that looks into the implications of crypto assets for macroeconomic stability, financial stability, and regulation. And that paper arrives at the conclusion that global standards are needed. So in particular, the paper proposes some policies for macroeconomic stability, including safeguarding monetary sovereignty, looking at ways to attenuate excessive capital flow, volatility, adopting appropriate tax treatments to address fiscal risks, and monitoring the impact on the international monetary system. On financial stability, one important area is to look to close data gaps through reporting requirements within regulation to better ensure consumer protection as well as safeguarding financial stability. So I would refer you to this paper, which is published on our website.

And then in terms of your question on some of the coups, let me start by saying there is of course, indeed a resurgence of coups in some countries in the last four years. Almost all of them are on the African continent, and more specifically in the Sahel region. These coups are symptomatic of complex and long standing political and economic fragilities, including poverty, inequality, lack of inclusion and conflict. Global shocks, such as the recent food price surge and geopolitical tensions can amplify these fragilities even further. The role of the international community, including the IMF, is to contribute, via policy advice, capacity development, and financing to a more stable economic and social environment by engaging on solutions to humanitarian challenges, social exclusion, insecurity, and lack of basic public services. Staying engaged in Sahel countries and similar fragile states is therefore important, and that is what we had in mind when we put together our recent strategy for fragile and conflict affected states. Let's continue. On Webex, we'll go to David Lawder.

QUESTIONER: Hi, thanks, Julie. Just a couple of questions on African countries, if you can give us an update on where Ghana is in terms of agreeing specific restructuring terms with its official creditors and also Ethiopia. I mean, there's an ongoing delay for a program there is that related to the civil unrest, the conflict in that country. What are the factors that you need to see there to move ahead? Thanks.

MS. KOZACK: Okay. So, starting with Ghana. So, as you know, the IMF board approved a three year, $3 billion ECF arrangement in May of 2023, and $600 million was disbursed immediately. A mission is currently in Accra to assess performance and discuss policies for the first review of the program, with a view to presenting the review to the Executive Board in November. Ghana's program has three objectives. Three key objectives restoring macroeconomic stability, ensuring debt sustainability, and laying the foundations for higher and more inclusive growth. And the program includes wide ranging reforms to build resilience while protecting the most vulnerable. The next steps on debt restructuring are for the Official Creditor Committee to agree with the authorities on the specific modalities of debt relief and for the authorities to continue to engage with their external private creditors for relief on their external debt. These discussions are ongoing, and we hope that the OCC, the Official Creditor Committee, and the Ghanaian authorities will find an agreement soon. The government has recently finalized the restructuring of its domestic debt.

And on Ethiopia, Ethiopia has been the subject of multiple shocks, including six consecutive years of drought, the pandemic, domestic conflict, and the impact of Russia's war in Ukraine, economic challenges are significant, including food insecurity, humanitarian needs, post conflict reconstruction, high inflation, and shortages of foreign exchange and some imported goods. We have received a request for financial assistance to help Ethiopia address these challenges. Discussions are underway on economic policies and reforms that could be potentially supported by an IMF program. An IMF program would support the homegrown economic reform agenda to help address macroeconomic vulnerabilities and help unlock Ethiopia's considerable economic potential. A new program would also require clear commitments from development partners and financing assurances from creditors under the G20 commons framework to ensure that it can meet its objectives. Okay, let's go back to the room. Cammy.

QUESTIONER: Hi. Thank you for taking my question. Could you provide updates on this sub-Saharan African region for us? And also, can you provide updates specifically on Nigeria and Benin? And do you have any reaction to the election of the confirmation of (inaudible)?

MS. KOZACK: Don’t think I have a recent update. So, we'll have to get back to you separately. We'll get back to you bilaterally on the request for update on Nigeria and Benin. On sub–Saharan Africa as a region, we will be releasing our regional economic outlook. In the coming weeks, we will be releasing that outlook and that will contain detailed information on the region. I think it's fair to say that the region is still undergoing what we called in April the big funding squeeze. The region has been very much affected by the succession of shocks, the pandemic, the cost of living crisis, food insecurity. And in addition, the region has been affected, of course, by tightening global financial conditions, and that has led to what we're calling the funding squeeze. All of that has happened in a situation where the region is facing also, in some countries, high debt. So the challenges, of course, are very significant in Africa. But I would be remiss if I don't also mention the opportunities in the sense that Africa is a continent with a youthful population, which presents tremendous opportunities for the region as well.

QUESTIONER: On the Central Bank, the new Central Bank, Yemi Cadozo, do you have any reaction to its comment to fix the system, the monetary policy system in Nigeria?

MS. KOZACK: We'll have to get back to you separately on that one.

QUESTIONER: Okay, thank you.

MS. KOZACK: Thank you very much.

QUESTIONER: Yeah, thank you so much. Two questions. First, about BRICS and New Development Bank. So as the number of countries that show interest to joining BRICS and or attracting financial support from the New Development Bank continues to grow, what is the IMF position to such kind of interest to NDB and BRICS? Do you think and do you see any risks to Brettonwood's institutions, including the IMF and its role in global financing in this regard? Thank you. The second question I can ask later. Thanks.

MS. KOZACK: Go ahead.

QUESTIONER: It's about voting quotas reform, as the Russian Foreign Minister Sergey Lavrov on the UN General Assembly last week urged to abandon attempts to artificially contain the redistribution of voting quotas at the IMF and to expand it for the Global South countries. Just curious when the IMF plans to reconsider voting quotas redistribution, and do you support the idea that the Global South should have more votes in the IMF? Thank you so much.

MS. KOZACK: Okay, very good. Any other questions on quota? Is that you, Danielle?

QUESTINOER: Can you hear me all right?

MS. KOZACK: Yes. Perfect.

QUESTIONER: I was just going to ask on quota reform as well. I was just wondering what your view is on the calls from the treasury. Recent calls from the treasury undersecretary for International Affairs who said the U.S. supports an equi-proportional increase in quotas and doesn't support what he called an ad hoc increase in quotas. And would be also interested in your thoughts, on the other comments he made, one relating to another chair on the executive board for Sub Saharan Africa and the possibility of creating another Deputy Managing Director position. Thank you.

MS. KOZACK: Okay, great. Thank you. So I'll answer these ones and then we'll take two more questions and then we'll wrap up. Okay. On BRICS and the New Development Bank. Improved and expanded international cooperation and deepening trade and investment ties among groups of countries, including, for example, the BRICS, is something that we welcome and we encourage. As long as they aim at reducing market fragmentation, enhancing trade, reducing investment costs, reducing trade costs. So I think our bottom line is, if countries come together and that supports collaboration and cooperation among countries, then that's something that we support.

What we, of course, want to avoid and what our Managing Director has talked about extensively is, of course, fragmentation of the global economy. We believe that that would be costly for the global economy. That's what our analysis suggests, that fragmentation could reduce global GDP by 7%, which is the size of Germany and Japan. So we are warning against the costs of fragmentation, but of course, we welcome FORA, which allow countries to come together, talk, resolve problems, and find solutions that help the global economy.

On quota to make the global economy stronger and more resilient in the shock prone world that we are facing, it is vital to reach an agreement to increase the IMF's quota resources before the end of the year as part of our 16th General Requota Review. It's also important to secure the needed resources for the Fund's interest free support to the poorest countries through the Poverty Reduction and Growth Trust. A potential increase in IMF quota is still under discussion with our membership. An increase in quota-based resources would be a significant achievement for the 16th General Quota Review. An increase in quotas would scale up the predictable quota-based resources available to IMF members and reinforce the role of the IMF as a provider of financial assistance to the broader membership at the center of the global financial safety net.

With respect to the broader questions from Mr. Shambaugh's piece and those by U.S. Treasury, a lot of the issues that were raised here quota increase, looking at the potential expansion of our Executive Board to include an African chair, looking at other ways to improve voice and representation, these are all issues which we expect to be discussed by our membership, including potentially in the upcoming annual meetings in Morocco. And I will take two more questions. I think we have two hands up online, so I'll go there. Let's go to Rodrigo.

QUESTIONER: Thank you, Julie and good morning, everyone. On El Salvador, what is the state of the relationship with them? Has the schedule of talks gotten any tighter and has it gotten any closer to a request for program? And on Suriname, it is said this week you expect advancement in the talks with China before the next program review. Can you be a little bit more precise on what is expected and for when do you expect a full agreement to be reached? Thank you.

MS. KOZACK: Okay, thank you. Okay, so on El Salvador, the Article IV Consultation was concluded in March of 2023. Staff continues to have an open dialogue with the Salvadorian authorities on technical and policy issues to help them achieve their goals, especially by bridging gaps in critical areas as well as on progressing on other important themes such as economic governance and transparency. We do have regular discussions on some of these issues that were discussed in the article Four consultation. And I would highlight two there, the pace and composition of the needed fiscal consolidation while supporting growth and the most vulnerable segments of the population. And the second is minimizing the risks arising from adapting bitcoin. And on Suriname, I don't have an update for you here, but we will get back to you bilaterally through our media relations team. Okay? And I'll go to the last question I have Assad Halid online on please go ahead.

QUESTIONER: Thank you, Julie. Yeah, I would like to ask about Pakistan, about the IMF policies when we are looking at the current government said that they have asked for relief and they wanted some permissions from IM. Under the course the existing agreement they wanted to get some kind of relaxation over there, on extreme high energy prices, electricity bills primarily. What exactly government of Pakistan has asked IMF in terms of relief or what kind of relaxations they have asked? That’s the first question. Second is IMF policies. Pakistan IMF agreement. We have seen some criticism that it's undermining human rights of the masses of Pakistan. Human Rights Watch has said that. Do you have anything to say on that or is there any proposal when it's been accepted from governments, categorically in this case from Pakistan government? IMF considered these things about human rights and especially for the minorities and the bigger chunk right now when we are talking about 92-95 million people in the poverty.

MS. KOZACK: Okay, thank you very much. So let me start by saying that of course, the program was approved on July 12th. It's a 9 month standby arrangement for an amount of $3 billion to support the Authority's Economic Stabilization program. The objectives of the program are to provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from other donors, multilateral and bilateral partners, including fresh financing and rollovers of debt coming due. Policy efforts center on the implementation of the fiscal year 2024 budget, appropriate monetary policy aimed at bringing inflation down, and continued reforms to improve the viability of the energy sector. All of these reforms are ultimately aimed at paving the way for higher, more inclusive and more resilient growth. To support social development and climate resilience, the program envisages plans to strengthen public financial management, tax administration efforts, and to better prioritize public investment. And all of this is being done with support from partners including not only the IMF but also the World Bank and the Asian Development Bank.

And I would just draw your attention to the recent interview by our Managing Director where I think she was very clear about what we think is needed in Pakistan, to go to your point about poverty and inequality. Here, her plea was to place the burden on the wealthy segments of society. It's important for, as the Managing Director said, that the rich pay their taxes, tax to GDP ratio in Pakistan is very, very low and that the poor are protected in society. The poor and the vulnerable members of society are protected and I think her words in this were very clear.

So with this, I will bring this Press Briefing to a close. Thank you all very much for joining us today. I hope to see you all or many of you in Marrakesh and I wish you all a wonderful rest of the week. Thank you very much. Finally, sorry I forgot to do my official wrap up. Briefing is embargoed until 11:00 a.m.. The transcript will be made available on and in case of clarifications, please reach out to our media relations team. And with that, I wish you all a really wonderful rest of the week and thank you all very much.

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