Transcript of IMF Press Briefing (November 21, 2024)
IMF News, November 21, 2024
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- Published: November 21, 2024
Briefing logistics and principal speaker
- Speaker: Ms. Julie Kozack, Director of the Communications Department, IMF.
- Briefing status: Embargoed until 11:00am Eastern Time (United States).
- Announced MD travel and DMD travel:
- Managing Director Kristalina Georgieva will attend the 2024 High Level Caribbean Forum on Managing the Green Transition in Barbados on December 3rd.
- Deputy Managing Director Nigel Clarke will travel to Nairobi, Kenya, on December 9th and 10th.
Egypt — program status, recent mission and priority reforms
- Recent activity:
- Managing Director had a constructive visit to Egypt; IMF mission concluded a fortnight visit for the fourth review of the EFF program.
- A team issued a press release at the end of the staff visit for the fourth review; discussions are continuing virtually to finalize agreement on policies and reforms to support completion of the fourth review.
- Financial support and policy changes cited:
- In March of 2024 the IMF increased support by raising the loan amount from $3 billion to $8 billion US dollars.
- A reform to IMF surcharge policy is saving Egypt $800 million over the next six years under the new policy.
- Discussions under the RSF (Resilience and Sustainability Facility) are ongoing; no definitive size available at the time of the briefing (there was prior mention of up to $2 billion in questions).
- Priority reforms and policy orientations identified by IMF staff:
- Sustain a flexible exchange rate to shield from external shocks.
- Maintain an appropriately tight monetary policy to contain inflationary pressures.
- Maintain strong fiscal discipline to reduce public sector debt vulnerabilities.
- Enhance private sector growth and accelerate divestment plans to reduce the state footprint.
- Raise sufficient revenue for essential programs (health, education, social safety nets).
- Focus on enhancing tax equity, broadening the tax base and reducing tax exemptions rather than increasing tax rates.
- Strengthen social safety nets to protect vulnerable groups from rising cost of living and energy price hikes.
Pakistan — program architecture, RSF interest, and recent mission
- Program context:
- Executive Board approved a new 37 month $7 billion EFF arrangement on September 25th.
- Key priorities under the EFF: strengthen policymaking, build economic and climate resilience, advance reforms for stronger, sustained and more inclusive growth.
- Recent engagement:
- Staff visit took place from November 12th to 15th; authorities reaffirmed commitment to the program.
- RSF and revenue issues:
- Pakistan has inquired about an RSF arrangement; IMF and authorities are engaged in preparatory work, with substantial background work required before any RSF consideration by the Executive Board.
- Potential revenue shortfalls will be assessed as part of the full review mission (reviews under Pakistan’s EFF are semiannual); the short staff visit between semiannual reviews is a customary procedure.
Sri Lanka — ongoing third review mission
- A team is in Colombo conducting the third review under Sri Lanka’s IMF-supported economic reform program.
- IMF expects the team to wrap up the mission and hold a press conference on November 23rd; the briefing deferred detailed findings to that team’s report.
Ukraine — sixth review, disbursements, and outlook
- Recent developments:
- On November 18th IMF staff and Ukrainian authorities reached a staff level agreement on the sixth review of the four-year EFF.
- Subject to Executive Board approval, Ukraine would have access to $1.1 billion which would bring total disbursements under the program to $9.8 billion.
- Program performance remains strong; authorities met all September quantitative performance criteria and structural benchmarks.
- Growth forecast revision:
- IMF revised up the growth forecast for Ukraine (from 3.0 to 4 percent in comparison with the last world outlook), reflecting stronger-than-expected outturns in the second and third quarters.
- External financing and IMF disbursement note:
- IMF stated it is expected to disperse $2.7 in 2025. Billion. Sorry, billion dollars in 2025.
- Timing:
- IMF expects the Executive Board to meet in the coming weeks; a staff report with details on financing needs will be published following Board approval.
Spain — Valencia floods economic assessment
- Human impact: floods in the Valencia region caused more than 200 dead.
- Preliminary economic assessment:
- Damage assessed as localized; key infrastructure damage (transport highways) and industry damage described as relatively limited.
- IMF’s preliminary view: impact on overall Spanish growth should be limited.
- Any quantified impact will be reflected in the WEO update to be published in January.
Global inflation and central bank guidance
- IMF observed global disinflation from high levels; in many countries inflation is now at or near target.
- Assessment of monetary policy:
- IMF views monetary policy of major central banks (including easing cycles in the US and Europe) as appropriate.
- IMF recommends central banks to remain data-dependent in decision making.
Russia and representation at the Executive Board
- Ms. Ksenia Yudaeva:
- Elected to the IMF Executive Board by a constituency including Russia; took office on November 1st.
- She represents the Russian Federation and the Syrian Arab Republic at the IMF Executive Board and is performing duties, including participating in hybrid board discussions in line with agreed practices.
- Visa and travel questions: referred to the U.S. State Department for visa processing details.
G7/ERA and Ukraine financing modalities
- IMF stated modalities for components of the ERA initiatives (G7 loans backed by immobilized Russian assets) are still being finalized; IMF provided no further details on potential IMF participation at the time of the briefing.
Argentina — program status and prospects for a new arrangement
- Recent program facts:
- Executive Board completed the eighth review of Argentina's program on June 13th.
- Total disbursements under the EFF reached $41.4 billion.
- Current posture:
- Argentine authorities are exploring the option of moving to a new fund arrangement; staff continue to work closely with authorities.
- IMF noted the stabilization program has delivered sizable reductions in inflation, fiscal surpluses, improved reserve coverage and nascent recovery in activity and real wages.
- IMF emphasized continuation of consistent fiscal, monetary and foreign exchange policies to sustain gains.
- Exchange restrictions and CEPO: IMF reiterated importance of consistent policy mix; ongoing constructive dialogue with authorities.
Kenya — recent review outcomes and debt considerations
- Reviews and disbursement:
- Executive Board concluded the seventh and eighth reviews of the ECF and EFF Blended Program and the RSF review on October 30th.
- This allowed a disbursement of $606 million and brought total disbursements to about $3.1 billion under these programs.
- Debt and borrowing guidance:
- IMF assesses Kenya to have a high risk of debt distress.
- Any new borrowing should be considered within a comprehensive fiscal strategy to reduce debt vulnerabilities while addressing spending needs.
Cryptocurrencies and climate considerations; FSB/IMF work
- IMF/FSB activity:
- A status report on the implementation of the Crypto Asset Policy Roadmap (joint IMF-FSB) was published in October.
- IMF is analyzing policy implications of crypto assets and digital money and assisting members on regulatory issues including taxation, capital flows, and climate-related risks.
- IMF’s role: help member countries address risks and design policies to manage those risks; no specific operational changes announced at the briefing.
Ghana — third review progress and timing
- Recent progress:
- IMF staff and Ghanaian authorities reached a staff level agreement on the third review of the ECF arrangement on October 4th.
- Upon Board completion, Ghana would have access to about $360 million.
- IMF staff were working toward a Board meeting in early December; further scheduling details to be provided when available.
- Program performance notes:
- Remarkable progress on debt restructuring.
- First half 2024 growth exceeded IMF expectations.
- Inflation has declined; fiscal and external positions improved.
- IMF recommendation:
- Continue implementation of policy and reform agendas to fully restore macroeconomic stability and debt sustainability.
Caribbean small states, tax reform guidance, and trade exposure concerns
- Trade policy risks:
- On possible future U.S. trade or fiscal policy shifts, IMF stated it would assess policies once details are known; no speculative conclusions were offered.
- Small island tax guidance (example: St. Kitts and Nevis):
- IMF staff recommended comprehensive tax reform to make tax systems more growth friendly, equitable and to reduce dependence on CBI (Citizenship by Investment) revenue.
- Recommended a more progressive tax system and elimination of distortions created by certain tax concessions.
Other procedural and operational notes from the briefing
- Press logistics:
- Virtual participants asked to turn on camera and microphone when speaking.
- Transcripts will be available on IMF.org following embargo lift.
- Closing: Ms. Kozack wished attendees a happy Thanksgiving.
Transcript of IMF Press Briefing — IMF Communications Department, November 21, 2024.