Transcript of IMF Press Briefing
IMF News, March 7, 2024
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- Published: March 7, 2024
Announcements and Management Travel
- Briefing embargoed until 11:00 a.m. Eastern Time.
- Managing Director Kristalina Georgieva:
- March 11–12: travel to Bulgaria; meetings with authorities in Sofia.
- March 14: speech at King's College, Cambridge, UK, part of “Conversations at King's”; speech will be live streamed on imf.org.
- March 23–27: travel to Beijing, China; keynote speech at the China Development Forum in Beijing on March 24; discussions with authorities; First Deputy Managing Director Gita Gopinath to deliver a video speech on the global economic outlook at the Boao forum for Asia on March 27.
- Deputy Managing Director Antoinette Sayeh:
- March 13–14: travel to Uruguay (first visit); meetings with authorities, private sector, public engagements.
- Deputy Managing Director Kenji Okamura:
- April 3–6: travel to Lao PDR for the ASEAN Finance Ministers and Central Bank Governors Meeting; participation in panel forum “Making The Most of Opportunities in a Changing World”.
Egypt: EFF Staff-Level Agreement and RSF Request
- Staff level agreement reached on comprehensive policies and reforms needed to complete the first and second reviews under the EFF arrangement.
- Key policy commitments in the EFF staff-level agreement:
- move to a flexible exchange rate system;
- tightening of monetary and fiscal policies;
- slowdown in large national infrastructure projects to reduce inflation and preserve debt sustainability while fostering private sector activity.
- Authorities requested an augmentation of the original arrangement from $3 billion to $8 billion.
- Authorities have requested an RSF; discussions between the IMF team and authorities will continue. The staff-level agreement reached yesterday was for the EFF, separate from the RSF.
- Reference materials released: press release and FAQs (see IMF communications).
China: Ongoing Assessment of Policy Steps
- IMF staff is in the process of assessing policies announced under the two sessions.
- The IMF welcomes the authorities' focus on high quality and sustainable growth and will review additional information from the authorities in the coming days.
Quotas and Managing Director Selection Process
- Period for consent to the 16th Quota Review Increase set through November 15 of 2024; agreement concluded in December 2023.
- IMF will provide periodic information on the status of consents when a critical mass develops.
- Managing Director selection process is an institutional process laid out on the IMF website; decision about a second term is for the Managing Director herself.
Ukraine: Board Timing and SOE Corporate Governance
- Board consideration of the latest EFF review expected in the second half of March.
- Corporate governance law in Ukraine:
- Described as a landmark law enhancing the role of supervisory boards and aligning legislation with OECD standards while respecting public financial management principles to contain fiscal risks.
- Robust implementation seen as critical to improving SOE performance and forming the basis for further reforms, such as developing an SOE state ownership policy.
Uganda, Nigeria, Senegal, Niger: Program Reviews and Findings
- Uganda:
- Executive Board concluded the 5th review of Uganda's ECF arrangement, enabling disbursement of about $120 million.
- Program aims: inclusive private sector led long term growth; strengthen governance; enhance monetary and financial sector frameworks; preserve debt sustainability; increase priority social spending.
- Uganda met all structural benchmarks and all but one quantitative performance criterion under the completed review.
- Post-Covid recovery continuing; inflation has come down following tight fiscal and monetary policy; monetary policy described as data dependent to bring core inflation back to the Central Bank's target.
- Nigeria:
- IMF team visited February 12–23 to discuss developments and policies; annual report being prepared; press release published with initial findings.
- Immediate priorities: strengthen social protection to ease suffering from higher food, drug, and transportation prices.
- Food price inflation reached 35% year over year in January.
- Approved targeted social safety net program will provide cash transfers to vulnerable households; full implementation needed before addressing costly implicit fuel and electricity subsidies while protecting low income households.
- Monetary Policy Committee decision last week to further tighten monetary policy expected to help contain inflation and naira pressures.
- Senegal:
- December 13, 2023: Executive Board completed the first review of a combined EFF, ECF, and RSF, providing access to about $280 million.
- Authorities implementing structural reforms: strengthen revenue administration and public financial management; enhance governance; improve anticorruption frameworks; RSF reforms being steadily implemented.
- Discussions on the second review and the Article IV consultation expected once the electoral process is completed and the new government is in place.
- Niger:
- IMF will follow up bilaterally with queries on Niger.
Zambia: Drought Impact, Program Status, and Debt Restructuring
- 2023 GDP growth for Zambia estimated at 4% in 2023.
- IMF team visited Lusaka February 14–22 to update on developments and start assessing drought impact.
- Review mission tentatively scheduled for mid-April (after Spring Meetings) to provide full assessment of drought impact on growth and budget.
- Preliminary assessment of drought:
- crop losses appear significant;
- increased imports of energy expected, leading to deterioration in the current account balance;
- fiscal implications due to support needs for vulnerable populations, potentially increasing financing needs;
- expected short-term adverse impact on the economy, with the team not expecting a persistent medium-term effect; limited impact on debt sustainability anticipated, subject to confirmation by mission.
- Approval of the second review of the IMF-supported program in December 2023 gave Zambia access to about $187 million.
- Debt restructuring:
- Debt treatment reflected in the MoU with official creditors consistent with IMF program objectives and parameters.
- Zambia pursuing policies consistent with restoring macroeconomic stability and growth and making good faith efforts to reach comparable terms with external private creditors.
Ethiopia: Request for Financial Assistance and Ongoing Discussions
- Authorities requested financial assistance to address food insecurity, humanitarian needs, post-conflict reconstruction, high inflation, and to support a homegrown economic reform agenda.
- October mission made good progress on how the IMF could support an economic program and reforms; discussions are ongoing.
- Another mission to Addis Ababa expected in the coming weeks.
- IMF is closely following violent incidents in Amhara and Oromia and notes U.S. concerns; hopes for peaceful resolution.
Ghana: Program Progress, Disbursements, and Legislation Assessment
- January 19, 2024: Executive Board completed the first review of Ghana's IMF-supported program, giving access to an additional $600 million.
- Total disbursements under the program so far: about $1.2 billion.
- Program outcomes:
- signs of economic stabilization emerging;
- growth in 2023 more resilient than initially expected;
- volatile inflation declining rapidly;
- fiscal and external positions improved; exchange rate volatility declined.
- Debt restructuring:
- domestic debt exchange completed last year;
- January 12: agreement in principle reached with official bilateral creditors;
- engagement ongoing with private external creditors.
- IMF team evaluating potential economic and financial implications of pending legislation (anti-LGBTQ+ law) and will continue monitoring; emphasis that diverse and inclusive economies flourish.
- Next mission tentatively expected in April.
- On safeguards for disbursed funds: authority’s strong policy and reform efforts and program implementation are emphasized as crucial to achieve intended outcomes.
Pakistan: Stand-by Arrangement and Next Steps
- January 11: Executive Board approved the first review of the Stand-by Arrangement with Pakistan, bringing total disbursements under the Stand-by to about $1.9 million.
- Program aims: stabilize the economy while protecting the most vulnerable.
- During the caretaker government period:
- economic stability maintained through strict adherence to fiscal targets while protecting the social safety net;
- tight monetary policy stance maintained to control inflation;
- timely tariff adjustments to shore up energy sector viability.
- IMF ready to hold a mission for the second review shortly after a new cabinet is formed; current Stand-by program ends in April 2024.
Global Sovereign Debt Roundtable (GSDR) and Restructuring Work
- IMF, World Bank, and G-20 engaged in the Global Sovereign Debt Roundtable (GSDR) and the common framework to address debt challenges in low income countries.
- Work plan developed and agreed with GSDR deputies in December 2023 to map next phase:
- support for countries with climate and debt vulnerabilities;
- technical issues: non-resident holders of domestic debt in restructuring, treatment of state-owned enterprise debt, restructuring timelines and processes;
- engagement with credit rating agencies on restructuring issues;
- review lessons learned from first restructuring cases under the common framework.
- Another meeting scheduled this month to deepen work on restructuring processes and timelines, including comparability of treatment; GSDR principals to meet during the Annual Meetings with an expected progress report.
Argentina: EFF Implementation, Social Protection, and Evaluation
- January 31: seventh review of Argentina's EFF completed, enabling an immediate disbursement of $4.7 billion.
- Stabilization plan aims to correct policy slippages in late 2023 and bring the program back on track by:
- establishing a strong fiscal anchor;
- policies to durably bring down inflation;
- rebuild reserves;
- tackle distortions and impediments to growth.
- Emphasis on protecting the most vulnerable and preserving real value of pensions; sustained efforts needed to support vulnerable segments.
- Disinflation process expected from fiscal consolidation, elimination of monetary financing, and improvements in monetary and FX policy frameworks; inflation is starting to decline.
- On a potential “new program”: focus remains on supporting policies to restore macroeconomic stability; premature to discuss exact program modalities.
- Independent Evaluation Office (IEO) is evaluating the IMF's Exceptional Access Policy; the 2018 Stand-by Arrangement with Argentina is among programs examined as part of that evaluation.
United Kingdom: Spring Budget Response
- Managing Director had a call with U.K. Chancellor Hunt regarding the spring budget.
- IMF view:
- aim to continue fiscal consolidation (pursued since November 2022) to reduce inflation and stabilize debt is welcome.
- main tax cut: further 2 percentage point reduction in the National Insurance contribution rate and reform of the child benefit regime, aimed at incentivizing work.
- measures partly funded from revenue raising measures; slight increase in public sector investment noted.
- 2024 Article IV Consultation in May will be an opportunity to discuss spending, revenue raising, investment, and debt stabilization.
Ecuador: Request to Begin Discussions on a Potential EFF Program
- Ecuadorian authorities officially requested to begin discussions on a potential new program a few weeks ago.
- IMF staff actively engaging to assess the economic situation and support reforms.
- Recent violence coincides with a challenging macroeconomic and fiscal outlook; IMF closely following developments and hopes security situation improves.
- IMF will provide more information as talks progress.
Transcript of IMF Press Briefing — March 7, 2024 — IMF Communications Department