Transcript of Global Policy Agenda October 2024 Press Briefing

IMF News, October 24, 2024

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• Published: October 24, 2024

Global outlook and macroeconomic risks

• Global economy:
  • "We expect the global economy to grow by 3.2 percent year and slow to 3.1 annual growth in 5 years."
  • "This is the lowest medium‑term outlook in decades."
• Inflation and monetary policy:
  • "Inflation continues to decline" and "Major central banks, including in the U.S., have rightly embarked on an easing path."
  • Policy trade‑off: "The trick now is to finish the job on inflation without unnecessarily damaging the job market."
• Trade and fragmentation:
  • "Trade is no more a powerful engine of growth. We live in a more fragmented global economy."
  • Concern over new groupings and payment systems: details needed to assess potential fragmentation impacts.
• Public debt and growth dynamics:
  • "Public debt is on track to surpass $100 trillion this year, an all‑time high, an equivalent of 93 percent of global GDP."
  • "By 2030, we expect that figure to approach 100 percent of GDP."
  • Bottom line: risk of getting "stuck on a low‑growth, high‑debt path" with consequences for incomes, jobs, and government revenues.

IMF priorities and policy prescriptions

• Two headline priorities:
  • "Secure the soft landing."
  • "Break out of the low‑growth, high‑debt path."
• Key policy recommendations:
  • Ensure inflation returns to target everywhere.
  • "Act on debt and deficits" — rebuild fiscal buffers; "in most countries, that can be done gradually, but it needs to start now."
  • "Carry out pro‑growth reforms from cutting red tape to improving governance."
  • Analysis cited: reforms "can boost output by up to 8 percent over 4 years in developing countries."
• Global cooperation:
  • Continue cooperation on "climate, technology, debt, trade" to seize opportunities and mitigate risks.

IMF lending, financial reforms, and tool innovations

• Lending and facilities:
  • "97 countries, highest in our history, have benefited from our lending since the pandemic, the majority through multiyear programs."
  • "During the same period, our concessional loans have tripled."
  • "Interest in the Resilience and Sustainability Facility continues to grow. We have 20 countries now using the facility to enhance their climate resilience, almost double the number when we met a year ago."
• Balance sheet and cost of borrowing:
  • "In April, for the first time, we reached our precautionary balances target of about $30 billion."
  • Membership decisions reducing borrowing costs:
  • "The cost of borrowing from our general resources will go down $1.2 billion annually."
  • "This is a 36 percent reduction in surcharges and in the margin of charges."
• Support to low‑income countries:
  • Comprehensive reform and financing package "generating about $8 billion in additional subsidy resources for PRGT over the next 5 years, more than doubling the long‑term, self‑sustained lending envelope to $3.6 billion a year."

Regional impacts and country‑specific notes

• Middle East and MENA:
  • Conflicts producing severe human and economic costs; sharp contractions in Gaza, West Bank, Lebanon.
  • MENA growth revisions: "MENA as a whole is seeing growth projections revised significantly downward—0.6 percent downward revision from April to now. Now we project only 2.1 percent growth."
  • Egypt:
  • "Egypt is losing 70 percent of the revenues it used to collect from the Suez Canal because of the impact of the conflict..."
  • IMF engagement: had a "$3 billion program; because of all these increased pressures on Egypt, we have augmented significantly the program. We increased it by $5 billion."
  • IMF stance: supportive but stresses reforms "sooner rather than later" to reduce costs borne by people.
• Latin America and the Caribbean:
  • Heterogeneous performance:
  • Caribbean: growth "2023, 7.5; 2024, 11.9."
  • Latin America and the Caribbean as a whole: "2023, 2.6 percent; 2024, 2.6 percent."
  • Recommendation: lift growth trajectory via pro‑growth reforms, governance improvements, and public engagement.
• China:
  • IMF projections: "growth to grow by 4.8 percent in 2024, 4.5 percent in 2025."
  • Policy direction: shift from export‑led growth toward boosting domestic consumption, resolve property‑sector distress, and advance social security and pension reforms to reduce excessive precautionary saving.
  • Risk: "If China does not move, growth can slow down to way below 4 percent."
• ASEAN / Thailand:
  • ASEAN is a "bright spot" and "outperforming the world," supported by strong institutions, macroeconomic foundations, and export orientation.
  • Importance of structural reforms, regional cooperation, and climate adaptation to sustain outperformance.
• Ukraine:
  • IMF assessment: fifth review of the EFF arrangement completed with benchmarks met; program reflects strong ownership.
  • International support scale: "we look at something in the order of $150 billion support over the 4 years of our program."
  • Domestic revenue mobilization: IMF expects decisive action using technology and transparency to strengthen tax collection and accountability.

Institutional role and engagements

• IMF core functions highlighted:
  • Bilateral and multilateral surveillance as a "transmission line of good practices."
  • Financial support as buffer for members in need.
  • Innovation and knowledge sharing (example: Resilience and Sustainability Trust).
• Cooperation and predictability in sovereign debt:
  • Progress under the G20 Common Framework and the Global Sovereign Debt Roundtable to make restructurings more predictable and efficient.
  • Joint World Bank–IMF three‑pillar response for liquidity pressures: reforms to boost growth and domestic resource mobilization, adequate financing including IFIs, and crowding in private finance.

Transcript of Global Policy Agenda October 2024 Press Briefing, October 24, 2024.

References

• https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva
• https://www.imf.org/en/Publications/Policy-Papers/Issues/2024/10/23/The-Managing-Director-s-Global-Policy-Agenda-Annual-Meeting-2024-Secure-A-Soft-Landing-And-556656
• Arab Republic of Egypt and the IMF
• Jamaica and the IMF
• Thailand and the IMF
• Transcripts
• PRESS CENTER
• https://www.imf.org/en/home