Press Briefing Transcript: Managing Director's Global Policy Agenda, Spring Meetings 2025
IMF News, April 24, 2025
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- Published: April 24, 2025
Global economic outlook and risks
- IMF has "significantly downgraded our projections for global growth."
- Major drivers of increased risk: "Major trade policy shifts have spiked uncertainty off the charts, accompanied by tighter financial conditions and higher market volatility."
- Global growth context:
- IMF earlier projected "3.3 percent growth" for the world economy.
- World recession-risk projection increased from "17 to 30 percent" (defined as growth falling below 2 percent).
- United States:
- Recession risk increased to "37 percent."
- Earlier U.S. growth projection was "2.7 percent" for the year; downgraded by "0.9 percent" to "1.8 percent."
- China:
- Growth projection downgraded from "4.6 to 4 percent."
- "We would have downgraded it much more—we actually would have had not .06 but 1.3 percent downgrade if it was not for the policy accommodation that China is already putting in place."
- MENA region:
- Growth projection downgraded from "4 percent" to "2.6."
- ASEAN intra-regional trade currently "21 percent" of their trade.
Three overarching priorities in the Global Policy Agenda
- 1) Resolve trade tensions quickly to preserve openness and reduce uncertainty.
- "A trade policy settlement among the main players is essential" and "we are urging them to do it swiftly because uncertainty is very costly."
- Immediate economic effects of uncertainty: reduced business investment and higher household saving.
- Policy guidance by region: "All countries should seize this moment to lower their trade barriers, both tariff and nontariff."
- 2) Safeguard economic and financial stability by "getting their own house in order."
- Fiscal policy:
- "Most countries need to rebuild buffers and ensure debt sustainability."
- Some countries may require "temporary and targeted fiscal support" in response to shocks.
- Countries should "define credible adjustment paths, gradual in most cases, protecting key investments, maximizing spending efficiency, and making space for longer term needs."
- Specific concern: "We cannot have countries with a tax to GDP below 15 percent where it is difficult to sustain the functioning of the state."
- Monetary policy and central banks:
- "Watch the data, watch inflation expectations."
- Central banks must "strike a delicate balance between supporting growth and containing inflation" and rely on credibility and "central bank independence is critical for credibility, protect it."
- "Preserve exchange rate flexibility as a shock absorber" for open economies; in cases of unwarranted currency market volatility, countries can consult "the IMF's integrated policy framework."
- 3) Double down on growth-oriented reforms to lift productivity.
- Emphasis on reforms that "create a good business environment, put entrepreneurship in the front seat, reform labor markets, create conditions for innovation" and enable countries to benefit from rapid technological advancements.
- The IMF will support members via "surveillance, diagnostics, policy advice and, when necessary, by providing financial support."
IMF instruments, crisis response, and institutional priorities
- IMF role: "helping them secure economic and financial stability, resolve or, even better, prevent balance of payments problems, and put in place strong policies and institutions to underpin vibrant economies."
- Instruments and initiatives:
- Surveillance, diagnostics, policy advice, and financial support when necessary.
- Strengthening the Global Financial Safety Net through collaboration with "regional financing arrangements, and with [major] swap-providing central banks."
- Crisis-resolution: promote a "cohesive, effective, and efficient Global Financial Safety Net" to deliver confidence.
- Debt work: support for "cooperative policy solutions for promoting a healthy rebalancing of the world economy to help countries address debt vulnerabilities."
- Acknowledged the "important work of the Global Sovereign Debt Roundtable" and agreement "to publish a playbook that provides guidance for predictable and faster debt restructuring processes."
- Instruments mentioned or queried:
- Resilience and Sustainability Trust (RST) and Resilience and Sustainability Fund (RSF) referenced in Q&A; current share of RST in Fund lending described as very small: "you need a magnifying glass to see the share of the Resilience and Sustainability Trust in this lending."
Regional guidance and country-specific advice
- China:
- Four emphasized priorities:
- "Rebalance your economy towards domestic consumption more."
- "Bring to an end the turmoil in the property sector" and add social protection so people "do not feel compelled to save rather than spend."
- "Lift up services" (healthcare, education, service sector) relative to goods.
- "Get the government to pull back from too much intervention in the economy. Let the private sector function to its full capacity."
- IMF working on a paper "in consultation, collaboration with the Chinese authorities" to document government support measures that may shift competitive positions.
- ASEAN:
- Highly exposed to tariffs due to export orientation.
- Praise for resilience-building: "prudently brought inflation down" and "disciplined fiscal policy."
- Policy advice: "If you have policy space, now is a good time to use it" but use it "carefully and prudently" to avoid depletion of buffers.
- Use of IMF tools: "integrated the policy framework" to advise on exchange rate flexibility and external sector management.
- Encourage strengthening "economic cooperation, policy coordination, and intra-ASEAN trade" to offset weaker global trade.
- Africa:
- Heterogeneous impacts; "direct impact of tariffs on most of Africa, not on all of Africa, but on most of Africa is relatively small, but the indirect impact is quite significant."
- Sectoral differences: oil producers face budgetary pressure from falling oil prices; oil importers may benefit.
- Recommendations:
- "Continue on a path of strengthening your fundamentals"—fiscal strengthening and building buffers.
- Prioritize "domestic resource mobilization" (tax-to-GDP concerns) and reducing tax evasion/avoidance; use technology to improve tax collection.
- "Deepen interregional trade and cooperation" and remove intra-regional barriers; leverage infrastructure improvements to boost trade.
- Argentina:
- Noted achievements under current program:
- Fiscal transformation "from high deficit to surplus."
- Inflation "in February dipped under 3 percent."
- Poverty reduced "from over 50 percent to now around 37 percent."
- Risks and advice:
- External deterioration could harm Argentina.
- Political risk: upcoming elections in October—"it is very important that they do not derail the will for change. So far, we do not see that."
- IMF, World Bank, and Inter-American Development Bank support Argentina; advice is to "stay the course."
- MENA:
- Region downgraded from "4 percent" to "2.6."
- Indirect impacts dominate; oil exporters hit by lower oil prices and dollar movements; non-oil sectors diverge across countries.
- Regional diversity highlighted:
- Gulf Cooperation Council countries praised for reforms and diversification.
- Morocco noted as the only country in the region "eligible for Flexible Credit Line from the IMF."
- Conflict-affected states (e.g., Sudan, Syria) face severe impact; IMF aims to "help them rebuild institutions."
Institutional scope, capacity, and membership engagement
- IMF membership and staff: "We have 191 members" and "we are 4,000 people."
- Budgetary discipline: "Our budget today in real terms is what it was 20 years ago."
- Engagement with U.S. and membership governance:
- Acknowledged U.S. remarks on Bretton Woods Institutions and priority issues raised by Secretary Bessent; affirmed willingness to discuss with U.S. authorities and the membership.
- Ongoing policy reviews: "the Comprehensive Surveillance Review" and "the Review of Program Design and Conditionality" to set surveillance priorities and refine lending design.
Messaging to members and final emphasis
- Repeated central message: reduce uncertainty—"We need to bring uncertainty down."
- Countries can act and must use available policy space prudently; "this sense of urgency to act is penetrating our membership."
- IMF commitment: remain "laser focused" on surveillance, lending, and helping members implement reforms to support stability and medium-term growth.
Transcript of press briefing by Kristalina Georgieva, Managing Director, IMF, April 24, 2025.