Transcript of IMF Press Briefing
IMF News, October 3, 2024
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- Published: October 3, 2024
Announcements and schedule
- Briefing embargoed until 11:00 a.m. Eastern Time in the United States.
- Managing Director Kristalina Georgieva:
- One-day visit to Qatar today for the annual Gulf Cooperation Council Finance Ministers and Central Bank Governors Meeting; meetings with country authorities and university students.
- October 7th: Hamburg Sustainability Conference, Hamburg, Germany.
- October 8th: Annual Meeting with Heads of International Organizations in Berlin, organized by Chancellor Olaf Scholz.
- Deputy Managing Director Kenji Okamura:
- In Mongolia from October 3rd to 4th; then participating in the ASEAN Summit in Vientiane, Lao PDR on October 9th and 10th.
- Annual Meeting timing and materials:
- Analytical chapters of World Economic Outlook, Global Financial Stability Report, and Fiscal Monitor released during the week of October 14th.
- Annual Meetings: Monday, October 21st to Saturday, October 26th.
- Journalists advised to register before October 7h via IMF Connect (media FAQs available).
Russia
- Article IV Consultations with Russia have been postponed "while we are gathering all of the necessary data and analysis to ensure that a rigorous consultation and analysis can take place."
- No further updates on timing of mission.
- Executive Director nomination process for Russia (Ksenia Yudaeva referenced): nominations are made by member countries; process is underway and IMF will not comment further at this stage.
Sri Lanka
- Background: On June 12th, 2024, IMF Executive Board completed the 2024 Article IV Consultation and the Second Review under the EFF, providing immediate access to about $336 million.
- Program assessment:
- Program performance described as strong: reviving economic growth, lowering inflation, boosting reserves, improving revenue mobilization.
- Important vulnerabilities and uncertainties remain; sustaining reform momentum is critical.
- Engagements:
- High-level team led by Director of the Asia Pacific Department Krishna Srinivasan visiting Colombo to meet President Dissanayake and new economic team; discussing latest developments and reform objectives.
- Dates for the Third Review under the EFF to be announced in due course; delegation will communicate when visit concludes.
- Debt restructuring:
- On September 18th, Sri Lanka and international bondholder representatives reached an agreement in principle subject to confirmation of comparability of treatment by Sri Lanka's Official Creditor Committee.
Japan
- Monetary policy:
- Bank of Japan taking important steps toward normalization and its toolkit.
- IMF advice: BOJ should continue to be data driven and to gradually raise the policy rate over its policy horizon if inflation forecasts support it.
- Target: 2 percent inflation target referenced as anchor for inflation and expectations.
- Fiscal policy:
- Recommendation: focus on growth-friendly fiscal consolidation to rebuild buffers and ensure debt sustainability, underpinned by revenue and expenditure measures.
Middle East, Gaza, West Bank, Lebanon, Israel, Libya
- Regional monitoring:
- IMF closely monitoring intensification of conflict; notes high uncertainty and potential for significant economic ramifications.
- Global channels of impact so far: shipping costs and commodity prices; commodity prices remain below the highs of the past year.
- Country impacts (preliminary official estimates cited):
- Gaza: preliminary official estimates indicate an 86 percent decline in GDP in the first half of 2024.
- West Bank: preliminary official data indicate a 25 percent decline in GDP in the first half of 2024.
- Lebanon: intensification exacerbates a fragile macroeconomic and social situation; physical infrastructure damaged.
- Israel: GDP contracted by about 20 percent in Q4 2023 with only partial recovery in the first half of 2024.
- Forecasts and reporting:
- Updated projections to be provided in October World Economic Outlook and Regional Economic Outlooks at the Annual Meeting.
- Lebanon program status:
- Limited progress on actions agreed in the 2022 Staff-Level Agreement.
- IMF prepared to engage on a possible financing program when decisive policy measures can be taken; current support through capacity development.
- Libya:
- IMF welcomed agreement to end the standoff over Central Bank leadership reached last week with UNSMIL support, paving way for resumption of central bank operations and oil production/exports.
- On July 1st, IMF’s Executive Board concluded the 2024 Article IV consultation with Libya.
- 2023: real GDP estimated to have expanded by 10 percent (rebound from 2022 oil stoppages).
- Medium-term challenge: diversify away from hydrocarbons and promote stronger, inclusive private sector growth.
Staff movement and safety
- No immediate detailed update on IMF Staff relocations in the region; IMF will follow up with details.
Egypt
- Executive Director nomination process: ongoing; IMF will not comment further.
- Program status:
- On July 29th, IMF Executive Board completed the Third Review of Egypt's EFF, allowing draw of $820 million.
- Inflation elevated but trending down; flexible exchange rate remains cornerstone of program.
- Policy priorities: continued fiscal consolidation, strengthened revenue mobilization, space to finance and expand social programs, accelerate reforms to strengthen private sector growth.
- Next review:
- Next review mission planned "in the coming months" consistent with published Staff Report schedule; plans unchanged.
Mexico
- Article IV process underway:
- Team scheduled to meet new authorities shortly; findings to be communicated later this month.
- Updated outlook to be included in the World Economic Outlook.
Caribbean: Grenada, St. Vincent and the Grenadines, Guyana
- Grenada:
- Initial estimates suggest physical damages alone exceed 16 percent of GDP (substantial infrastructure, housing, agriculture, fisheries damage).
- Near-term growth expected to remain positive supported by limited impact on critical tourism/infrastructure and post-disaster reconstruction beginnings.
- St. Vincent and the Grenadines:
- Initial reports indicate substantial losses and damage in the order of 20 percent to 25 percent of GDP, mainly in the southern Grenadines.
- Authorities drawing down buffers and receiving international assistance; growth impact in 2024 currently expected to be relatively moderate due to prompt reconstruction efforts.
- Guyana:
- No immediate update provided; IMF to follow up bilaterally.
- Noted structural concern: rapid growth driven by oil and gas while non-oil economy has shown limited dynamism; IMF recommendations to be provided in regional briefings.
United States: Fed policy, port strike, transparency
- Port strike:
- Too early to assess impact; IMF monitoring developments and hopes for prompt resolution to minimize supply-chain spillovers.
- Monetary policy:
- Inflation declining; core PCE expected to end this year at around 2.5 percent and return to 2 percent by mid-2025.
- Fed actions viewed as appropriate; IMF encourages data-dependent, meeting-by-meeting approach.
- Reference to recent 50-basis point cut by the Federal Reserve last month (question context).
- Transparency and institutional dialogue:
- IMF noted U.S. Treasury inputs and will engage membership on issues raised about transparency in emergency loans as part of ongoing Fund policy reviews and broader Bretton Woods institution discussions.
Argentina
- Program and implementation:
- Since the Eight Review of the EFF concluded, authorities continued program implementation: sizable reduction in inflation and fiscal deficit; signs of nascent recovery in activity and real wages.
- Technical discussions ongoing in the context of the current EFF; IMF Staff assessing compliance with end-September targets on fiscal and reserve sides.
- Poverty and social impact:
- Government data cited poverty rate near 53 percent; IMF recognizes delicate social situation and notes authorities have expanded well-targeted social assistance programs benefiting poor women and children.
- Continued action to bring down inflation and encourage employment and investment expected to improve real wages and activity over time.
Ecuador
- Program status:
- May 2024: IMF Executive Board approved a new 48-month EFF program with access about $4 billion and an immediate disbursement of $1 billion.
- First Review expected before the end of this year.
- RSF eligibility:
- Ecuador is eligible for the Resilience and Sustainability Trust; authorities evaluating potential RSF arrangement.
- Climate and shock vulnerabilities:
- Ecuador vulnerable to extreme climate events (droughts, landslides, floods, storms, El Nino, La Nina); climate coverage available in published Staff Report.
- Growth forecasts:
- IMF to update forecasts for Ecuador at the Annual Meetings in World Economic Outlook and Regional Economic Outlook.
El Salvador
- Engagement:
- IMF Staff in ongoing engagement with Salvadoran authorities to reach agreement on a new IMF-supported program for macro stabilization, adjustment, and growth-enhancing reforms.
- Policy elements under discussion:
- Addressing risks from bitcoin is a key element: IMF recommends narrowing the scope of the bitcoin law, strengthening regulatory framework and oversight of the bitcoin ecosystem, and limiting public sector exposure to bitcoin.
- 2025 draft budget seen as a step to strengthen public finances; includes measures to contain wage bill and spending on goods and services, requiring strong implementation.
Senegal
- Government audit:
- IMF welcomes general audit of public finances and commitment to governance and fiscal transparency.
- Authorities have shared audit findings with IMF Staff; team will evaluate macroeconomic impact and outline next steps in coming weeks.
Ethiopia
- Program details:
- IMF Board approved ECF arrangement on July 29th, 2024 supporting reforms to address macro imbalances and restore debt sustainability.
- IMF financing about $3.4 billion; immediate disbursement about $1 billion after Board approval.
- Program aims to fill external financing gap estimated at $10.7 billion through 2027-2028, with broadly equal burden sharing between IMF, development partners, and Common Framework debt treatment.
- First Review:
- Recent mission produced a Staff-Level Agreement on policies for the First Review; Executive Board consideration scheduled for October 18th.
Kenya
- Staff engagement:
- IMF Staff visited Kenya from September 11th through 16th on a fact-finding mission; details in Press Release.
- Discussions ongoing on the way forward.
- Governance diagnostics:
- IMF has encouraged authorities to request a governance diagnostics; IMF has provided such diagnostics to other countries as diagnostic assistance to assess and strengthen governance and lay basis for reforms.
Sierra Leone and Malawi
- Managing Director meetings:
- MD met with President Bio of Sierra Leone: discussed IMF support and congratulated Sierra Leone on reaching a Staff-Level Agreement on a new 36-month ECF arrangement.
- MD met with Malawi’s president: discussed macroeconomic policies and reforms envisaged under Malawi's ECF arrangement, strategies to boost growth, and progress on debt restructuring.
- IMF reaffirmed commitment to support both countries’ stabilization efforts.
Ukraine
- Fifth Review:
- On September 10th, IMF Staff and Ukrainian authorities reached a Staff-Level Agreement on the Fifth Review; subject to Executive Board approval, access would be $1.1 billion.
- Board consideration of the Fifth Review is expected before the Annual Meetings.
- Financing needs:
- At the time of the Fourth Review, Ukraine's financing gap for 2025 was projected at nearly $26 billion; staff updating projections in the context of the Fifth Review.
Citizenship by Investment (CBI) programs and Jamaica appointment
- CBI litigation:
- IMF will not comment on ongoing litigation (RICO case referenced).
- For country-specific fallout (e.g., St. Kitts and Nevis), IMF suggested regional briefings at the Annual Meetings will cover related issues.
- Jamaica:
- Nigel Clarke appointed as one of IMF Deputy Managing Directors; IMF welcomes him given prior engagement with IMF Staff on Jamaica programs.
Transcript of IMF Press Briefing — October 3, 2024. IMF Communications Department.