Transcript of IMF Press Briefing, December 19, 2024
IMF News, December 19, 2024
Source details
- Canonical URL
- Transcript of IMF Press Briefing, December 19, 2024
Other formats
Bibliographic details
- Published: December 19, 2024
Opening and announcements
- Briefing chair: Ms. Julie Kozack, Director of the Communications Department, IMF.
- Briefing embargo: embargoed until 11 a.m. Eastern Time in the U.S.
- Announcement: The World Economic Outlook Update will be released in mid-January; exact date to be communicated by the Media and Social Outreach Team.
- Contact: MEDIA@IMF.org; Press officer: Kwabena Akuamoah-Boateng, Phone: +1 202 623-7100; @IMFSpokesperson.
Syria: engagement, assessment, and reconstruction
- Historical engagement:
- The Fund has not had any meaningful engagement with Syria since 2009 (last Article IV consultation).
- Current stance and monitoring:
- The IMF is monitoring the situation closely; the situation on the ground is described as fluid.
- It is "too early to make an economic assessment."
- Readiness to support:
- The Fund "stands ready to support the international community's efforts to assist Syria's reconstruction as needed and when conditions allow."
- On program reengagement and arrears:
- No specific conditions or timeline provided; the Fund will assess specific policies if/when they are put in place.
- Reconstruction cost/projection question:
- No economic cost projection provided; IMF states it is too early to make an assessment.
United States monetary policy and global implications
- U.S. macroeconomic assessment:
- The U.S. economy has been "remarkably strong" over the past few years.
- Disinflation has been "less costly than many feared."
- Expectation: "inflation on a path to the 2 percent target."
- Specific projection: "core PCE inflation to end this year at just under 3 percent."
- Labor market:
- Recent data shows the labor market continues to cool while inflation remains somewhat higher than expected but trending down.
- IMF view on Fed actions:
- The Fed's actions are described as "appropriate."
- Recommendation: The Fed "will need to continue to calibrate the pace and the extent of the rate cuts with incoming economic data as uncertainty remains high."
- Global spillovers:
- "Appropriate policy in the U.S., including policy by the Fed and a strong U.S. economy, given that the U.S. is the world's largest economy, is good for the rest of the world."
- On the U.S. debt ceiling:
- IMF position unchanged: important for the U.S. to have an arrangement that allows the federal government to be fully funded in a way agreeable to both parties.
Bank of Japan monetary policy
- IMF view:
- The Bank of Japan's actions are viewed as "appropriate."
- Recommendation: BoJ should "continue a data dependent monetary policy" while seeking policy normalization and ensuring inflation durably returns to target.
Argentina: program status and political/legislative context
- Recent performance:
- Authorities have implemented an economic stabilization program with "sizable reduction in inflation, fiscal surpluses, and improved international reserve coverage."
- Recovery in activity and real wages is "firmly underway," with growth turning positive in the third quarter of this year.
- Program negotiation status:
- Authorities "have formally expressed interest in moving to a new program, and negotiations are now underway."
- Clarification: "the current EFF is set to expire at the end of this year."
- It is "not uncommon" to let an existing arrangement expire while considering a new Fund-supported program.
- Fiscal position:
- Recent data through end November suggests the authorities are "now running a primary surplus of about 2 percent of GDP."
- Process:
- Details on the size and policies of any new program are "part of the discussions that are underway" and will be provided in due course.
Russia and Ukraine: macro assessment and program details
- Russia economic assessment:
- The Russian economy "has been overheating through most of 2024."
- Growth drivers: "strong private consumption, supported by a very tight labor market, fast-growing wages, and buoyant credit," and "strong corporate investment."
- Fiscal spending: defense and security spending "has increased strongly," overall spending "has grown more modestly."
- Policy stance: both fiscal and monetary policy have an important role; IMF will update Russian forecast in the January WEO.
- Executive Board representation: Ms. Ksenia Yudaeva took her position as Executive Director on November 1st and is "fully discharging her functions, including participating virtually in Executive Board discussions."
- Visa/status questions referred to the U.S. State Department; IMF provided no visa status update.
- Ukraine EFF program status and disbursements:
- Program approved: March 2023 for about $15.6 billion.
- Staff-Level Agreement: reached on the Sixth Review on November 18th, subject to Executive Board approval (Executive Board meeting scheduled for December 20th).
- Disbursement related figures:
- Upon approval of the Sixth Review, Ukraine would have access to about $1.1 billion in disbursements.
- That would bring total disbursements under the program to about $9.8 billion.
- Remaining disbursements in 2025 could be $2.7 billion, subject to performance and Board approval.
- Program duration constraint: the current EFF cannot be extended further because it is "at the maximum feasible duration for a Fund EFF program which is 48 months."
- Program performance: "remains strong," with authorities meeting all September quantitative performance criteria, structural benchmarks, and prior actions for the Sixth Review.
- Future engagement: focus is on current program implementation; updates to be provided in due course.
Egypt: Fourth Review discussions and currency movement
- Review status:
- Discussions of the Fourth Review "are ongoing virtually" with a view to finalizing agreement on policies and reforms; more information will be provided once discussions conclude.
- Exchange rate question:
- IMF acknowledged questions about the decline in the Egyptian pound against the dollar; no detailed assessment provided in the briefing.
Kenya: recent reviews, visits, and program support
- Recent IMF action:
- On October 30th, the IMF Executive Board concluded the Seventh and Eighth Review of the ECF / EFF arrangement and the RSF, allowing a disbursement of about $606 million and bringing total disbursements to about $3.1 billion under the program.
- IMF engagement:
- Deputy Managing Director Nigel Clarke visited Nairobi December 6th through 10th to listen and learn about Kenya's economic challenges and how the IMF can support program policies.
- Next steps:
- No specific timeline provided for a team visit in the briefing; further details to follow as available.
El Salvador: EFF arrangement and Bitcoin provisions
- Staff-Level Agreement:
- IMF staff and El Salvadorian authorities reached a Staff-Level Agreement on a new arrangement under an Extended Fund Facility (EFF) for $1.4 billion, subject to Executive Board approval.
- Program objectives:
- Strengthen fiscal and external sustainability through "ambitious and growth-friendly fiscal consolidation" and actions to enhance reserve buffers.
- Emphasis on governance, transparency, resilience, and improving insecurity conditions.
- Bitcoin-related provisions:
- Agreement seeks to "diminish" potential risks of the Bitcoin project in line with IMF policies.
- Legal reforms will make acceptance of Bitcoin by the private sector "voluntary."
- IMF supportive of authorities' efforts to boost financial inclusion and increase growth.
- General IMF position on crypto assets:
- Crypto assets present both risks and opportunities.
- Risks: "financial stability, consumer protection, and financial integrity."
- Opportunities: distributed ledger technology is being deployed by financial institutions for payments, security clearance, back office operations; investor appetite may reflect perceived diversification benefits.
- Recommendation: countries should have policy frameworks to address crypto-related risks.
Ghana: program progress and debt restructuring
- Executive Board action:
- On December 2nd, the IMF Executive Board completed the Third Review, giving Ghana access to $360 million and bringing total disbursements under the program to $1.9 billion.
- Program performance:
- Performance "generally satisfactory"; "remarkable progress on debt restructuring"; "economic growth is recovering rapidly"; inflation has "importantly declined" albeit at a slower pace; fiscal and external positions continued to improve.
- Program adjustments:
- Programs are developed collaboratively with authorities and are subject to regular reviews to assess progress and align with objectives (restoring macroeconomic stability, ensuring debt sustainability, fostering inclusive growth).
Sri Lanka: Third Review and tax measure announcements
- Staff-Level Agreement:
- IMF staff and Sri Lankan authorities reached a Staff-Level Agreement on the Third Review under the EFF on November 23rd.
- Upon Executive Board approval, Sri Lanka will have access to $333 million.
- Timing:
- Executive Board meeting expected "in the coming months" following implementation of prior actions.
- Recent tax announcements:
- New government measures were announced less than 24 hours prior to the briefing; IMF did not provide a full assessment at the briefing and will include a full assessment in the staff report published after Executive Board approval.
Mozambique: program status, shocks, and readiness to support
- Recent events:
- Condolences extended for lives lost during post-election unrest and cyclone-related natural disaster.
- Economic context:
- Mozambique has shown resilience to a series of shocks but faces political transition, fragile social conditions, recurring natural disasters, debt vulnerabilities, and governance weaknesses.
- IMF engagement and timeline:
- On July 8th, the IMF Executive Board completed the Fourth Review under the EFF and the 2024 Article IV Consultation.
- A virtual staff visit took place between November 11th and December 2nd.
- Further discussions will take place once the political transition has been completed.
- IMF "stands ready to support Mozambique in maintaining economic stability and pursuing sustainable growth."
Miscellaneous: other country and process notes
- Russia consultations:
- A previously expected consultation was postponed to gather additional information; no updated timeline provided for 2025 consultations.
- Press logistics:
- Transcript to be made available later on IMF.org after embargo lift.
- IMF’s first day of business after the break: Thursday, January 2, 2025.
Transcript of IMF Press Briefing, December 19, 2024 — IMF Communications Department