Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development
IMF News, October 22, 2024
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- Published: October 22, 2024
Humanitarian crises and multilateral response
- Deep concern over humanitarian crises and conflicts causing loss of lives, forced displacement and migration.
- Call for a strong, united, multilateral approach to restore peace, stability, and livelihoods.
- Urge all parties to prioritize diplomacy, de-escalation, and cooperation.
- Call for robust multilateral support for recovery, reconstruction, and long-term development efforts in affected areas.
Global growth outlook and risks
- Global economic growth is forecast to remain relatively stable in the coming year, with stabilization in 2024 and 2025.
- Warning that the optimistic global forecast masks tepid prospects for the most vulnerable countries.
- Key downside risks cited: geopolitical tensions, trade fragmentation, increasingly frequent extreme weather conditions, and a more pronounced slowdown.
- Concern that spillovers from Advanced Economies’ policies could worsen some EMDEs’ prospects.
Inflation and monetary policy outlook
- Inflationary pressures are gradually easing, but outlook remains uncertain due to elevated risks.
- Food price inflation is declining or stabilizing; energy prices have remained low, partly reflecting the role of the OPEC Declaration of Cooperation.
- Many advanced economies have returned inflation to target levels; some EMDEs continue to face high inflation rates.
- Trade tensions and policy uncertainty could increase upside risks to inflation; geopolitical tensions could raise volatility in food and energy prices.
- Expectation that central banks may maintain a cautious approach to monetary easing, potentially keeping interest rates high for an extended period.
Challenges facing EMDEs (Emerging Markets and Developing Economies)
- Prolonged period of elevated or slower reduction of policy rates increases external, fiscal, and financial risks.
- Depreciation of some EMDE currencies, high debt, and rising debt-servicing costs are constraining fiscal space, impacting capital flows and growth, and straining financial stability.
- Policymakers face trade-offs between sizable investment needs and fiscal sustainability; real growth could suffer.
Role of the IMF and global financial safety net
- IMF should be ready to serve as the center of the Global Financial Safety Net.
- Calls for strengthening the international monetary system by:
- Enhancing crisis prevention and adjustment mechanisms;
- Coordinating global stability;
- Providing timely, predictable, and adequate liquidity support to members facing balance of payments difficulties.
IMF policy reviews, SDRs, and lending toolkit refinements
- Welcome reviews and updates of IMF procedures and policies; incorporation of climate-related risks, domestic public debt, and complex debt restructuring in the LIC-DSF review is welcomed, but a comprehensive review addressing methodological concerns is awaited.
- Approval of the use of Special Drawing Rights (SDRs) for acquisition of hybrid capital instruments by prescribed holders is noted as significant; approved limit of SDR15 billion could increase lending by four-fold.
- Call on countries with strong external positions to voluntarily explore rechanneling SDRs, including through Multilateral Development Banks (MDBs), where legally possible, while respecting reserve asset quality of the SDR and ensuring their liquidity.
- Welcome refinements to the Resilience and Sustainability Trust (RST): facilitate early disbursements, eliminate dual-purpose reforms, and ensure program continuity.
- Expectation for further work to operationalize the RST mandate on pandemic preparedness and a comprehensive review planned for 2026 to address remaining issues, including the requirement of an upper credit tranche program.
- Welcome completion of the review of charges and surcharges that resulted in a reduction of the cost of borrowing from the General Resource Account; call for initiating further reforms to provide more significant reduction of surcharges and additional cut in the margin for the rate of charge.
- Welcome Poverty Reduction and Growth Trust (PRGT) reforms, including increase in resources for concessional financing and additional boost to subsidy resources.
Representation, governance, and quota reviews
- Support for approval of a Third chair for Sub-Saharan Africa at the IMF Executive Board to strengthen the region’s voice and reduce workload.
- Recommend governance reforms in MDBs and IFIs to correct regional and gender underrepresentation in top management and senior staff positions.
- Call on all countries to complete internal approval procedures for the 16th General Review as soon as possible.
- Await results of ongoing efforts to develop possible approaches for a new quota formula; hope it will guide quota realignment reflecting members' relative economic weight and strengthen the voice of EMDEs under the 17th General Review of Quotas.
- Emphasize importance of adhering to the June 2025 deadline for the review.
World Bank Group, IDA21, and MDB reform priorities
- Welcome progress in implementation of the World Bank Group (WBG) Evolution Roadmap, launch of the PortfolioGuarantee Platform, and stronger private capital mobilization efforts.
- Call for more contributions to the Livable Planet Fund and support for the Grant Facility for Project Preparation Trust Fund to enhance project preparation capacity.
- Stress that increased investment must be affordable to ensure debt sustainability of EMDEs pursuing SDGs and the Paris Agreement.
- Look forward to timely conclusion of the 2-stage IBRD loan pricing adjustments to enhance affordability of IBRD loan.
- IDA21 replenishment is crucial; welcome focus on People, Planet, Prosperity, Digitalization, and Infrastructure.
- Given rising external financing needs amid declining Overseas Development Assistance and Foreign Direct Investments, call for a robust IDA21 outcome increasing support for LICs in real terms, supported by an expanded donor base.
- Encourage donors to be ambitious and to consider levels of fragility before adjusting loan terms that may impact debt sustainability.
- Welcome the proposed Global and Regional Opportunities Window (GROW) but call for expanded focus on biodiversity, desertification, carbon and methane gas emissions from agricultural production, and rising sea level.
MDB scale, private capital mobilization, and public investment efficiency
- Support implementation of the G20 Brazil Presidency MDB Roadmap Towards Bigger, Better, and more Effective MDBs, building on G20 New Delhi Leaders Declaration and G20 Independent Experts Group recommendations.
- Call for deeper engagement between WBG and MDBs to operate as a system addressing country development priorities and global/regional challenges.
- Recommend regular reviews of MDBs resources and strategies as a basis for considering additional capital needs.
- Advocate support to remove regulatory bottlenecks to private investment, develop innovative risk-sharing and hedging instruments, including local currency lending and domestic capital market reforms.
- Call for comprehensive policy reform programs to improve public investment efficiency, governance, and fiscal administration, tailored to country circumstances.
Sovereign debt architecture and debt relief mechanisms
- Commend progress under the G20 Common Framework and the Global Sovereign Debt Roundtable (GSDR) in establishing common processes and practices.
- Call for stepped-up implementation of the G20 Common Framework in a predictable, timely, orderly, and coordinated manner and for more meaningful debt relief.
- Welcome joint stakeholder efforts to enhance debt management and transparency; encourage private creditors to follow suit.
- Highlight need for reforms around early engagement with creditors and interaction with credit rating agencies.
- Urge comprehensive reform of the sovereign debt framework to address debt vulnerabilities in low and middle-income countries effectively and systematically.
- Call for consideration of options—including support of the IMF and the World Bank—to help countries facing short-term liquidity challenges whose debt is sustainable.
Climate finance, mitigation, and adaptation
- Global community is falling short of attaining climate and development goals and providing commensurate financial support to developing countries.
- Frequency, intensity, and scale of extreme weather events are increasing, necessitating urgent action.
- Call for accelerating climate action based on equity and the principle of common but differentiated responsibilities and respective capabilities.
- Climate strategies must incorporate EMDE needs; mitigation and adaptation should ensure accessibility to all types of energy and energy security while supporting sustainable development and poverty eradication.
- MDBs and IFIs should support R&D of green technologies to reduce greenhouse gas emissions.
- Call for a concrete climate finance goal that is commensurate with the challenges and greater than the $100 billion per year planned during the upcoming CoP29.
- Look forward to faster progress on operationalization and capitalization of the Loss and Damage Fund.
- Reiterate call for new and additional grant-based, highly concessional finance and non-debt instruments to support both middle- and low-income countries during just and equitable transitions.
Domestic resource mobilization and international tax cooperation
- Strong support for national efforts to prevent and combat illicit financial flows, corruption, money-laundering and tax evasion to increase domestic resources.
- Call for increased capacity building to improve members’ expertise in domestic resource mobilization.
- Acknowledge OECD work on tax base erosion and profit shifting; welcome progress on the Two-Pillar Solution under the OECD Inclusive Framework.
- Look forward to negotiation of the United Nations Framework Convention on International Tax Cooperation and its two early protocols; call for constructive engagement and multilateral consensus.
- Commend the work of the Brazil G20 Presidency on taxation and inequality.
Multilateralism and trade
- Concern that some large economies pursue protectionist or nationalist policies inconsistent with global integration on trade and development.
- Reaffirm support for a rules-based, non-discriminatory, fair, open, inclusive, equitable, sustainable, and transparent multilateral trading system with the World Trade Organization at its center.
- Encourage countries to contribute to strengthening multilateralism through ongoing initiatives, including the Bretton Woods Initiative and the Fourth Conference on Financing for Development.
- Call for enhanced collaboration among multilateral institutions for coherent and collaborative approaches.
Meeting and participation details
- Ministers held the one hundred and twelfth meeting in Washington, D.C. on October 22, 2024, with Ralph Recto, Secretary of Finance, Philippines, in the Chair.
- Deputies held the one hundred and twenty-fourth meeting on October 21, 2024, chaired by Sharon P. Almanza, Treasurer of the Philippines.
- Noted participants included Kristalina Georgieva, Managing Director, International Monetary Fund; Axel van Trotsenburg, Senior Managing Director, World Bank.
- Lists of Ministers, Deputies, Observers, Special Guests, G-24 Secretariat, and IMF Secretariat for the G-24 are recorded as persons who sat at the discussion table.
Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development — October 22, 2024