## Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department, International Monetary Fund

_IMF News, March 3, 2011_

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## Bibliographic details
- Published: March 3, 2011

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### Announcements, schedule, and events
- Press briefing date and location: March 3, 2011, Washington, DC; briefing embargoed until 10:30 a.m. Washington time, 1530 GMT.
- Managing Director visit: On a visit in Latin America; will give a press conference in Brazil at 2:00 p.m. local time (later the same day).
- IMF conference: March 7 and 8 — conference on “Macro and Growth Policies in the Wake of the Crisis”; opening remarks by Managing Director Dominique Strauss-Kahn on Monday, March 7, at 8:45 a.m.; luncheon address by First Deputy Managing Director John Lipsky. Conference will be webcast live on IMF.org.
- Other travel and events:
  - Managing Director visiting Japan on March 11 to meet senior Japanese officials and discuss G-20 issues.
  - IMF and government of Indonesia jointly holding a one-day high-level conference on capital flows in Bali, Indonesia, on March 11.
- Publications and meetings:
  - New issue of Finance and Development magazine released today (focus: Latin America’s transformation; interview with former Managing Director Michel Camdessus).
  - Press registration opens today for spring meetings (World Bank and IMF) on April 15 and 16; accreditation available on IMF.org beginning today.
  - World Economic Outlook release: Tuesday, April 12 (morning); Fiscal Monitor released later that day; Global Financial Stability Report released the following day.
- Greece program timeline: IMF Board meeting scheduled for March 14; documents will be released after the Board meeting (typically may take a day or two).

### Food prices, inflation, and monetary policy guidance
- Concern over rising food prices:
  - IMF is “extremely concerned about rising food prices, in particular because of their impact on the poorest and most vulnerable” including low-income countries.
  - Note: some poorest countries with subsistence farming have had good crops in Africa, which may help somewhat.
- Policy guidance on food-price effects:
  - Protect vulnerable populations via well-targeted support rather than broad product subsidies.
  - Monetary policy response should depend on the importance of food in the consumer price basket and the country’s monetary policy regime.
  - Typical central bank approach: accommodate a first-round impact of food prices while focusing on preventing a longer-term, permanent increase in inflation.
- Recent central bank actions:
  - Several countries experiencing rapid growth and potential overheating have begun tightening monetary policy; Brazil cited as an example.
- Advanced-economy inflation assessment:
  - For the U.S.: “inflation is not a worry for the U.S. economy” at present; Federal Reserve actions were appropriate to limit deflation/disinflation risks.
  - On QE2 and inflation risk: priority is achieving sustainable growth; the Fed must balance risks and maintain low inflation as a key objective.
- Oil price considerations:
  - Uncertainty over whether commodity price increases are demand-driven (longer-term) or supply-driven (short-term); markets expect increases to be relatively short-lived but volatility could change that.
  - A protracted supply-driven oil-price increase would affect both inflation and growth and would need balancing in policy responses.

### Greece: program stance and debt questions
- IMF position:
  - The Greek authorities have stated that debt restructuring/default is not an option.
  - IMF emphasizes two pillars of the program: structural reforms to promote growth, jobs, and competitiveness; and policies to address public-finance problems.
  - IMF expects the program to be successful but acknowledges it is difficult and may follow different paths to success.
- Communication:
  - Relations with the Greek government are “very close and strong,” with respect for their policy choices.

### Ireland: program reviews and timing
- Expectation that first and second reviews may be combined given slippage.
- A full review mission is anticipated “early next month” (relative to March 3, 2011).

### Ukraine and banking recapitalization
- Recapitalization update:
  - Some banks have not yet had capital brought to satisfactory levels; authorities expect completion of recapitalization “in coming months.”
  - IMF mission undertook talks; discussions are continuing and IMF remains in dialogue.

### Pakistan and mission confidentiality
- Ongoing dialogue between Pakistani officials and IMF team in Islamabad; IMF does not comment on ongoing field discussions.

### New Zealand: earthquake impact and forecasts
- Article IV Consultation Mission scheduled at end of next week.
- January forecast for New Zealand growth this year: 3 percent.
- Mission expects the earthquake(s) in Christchurch will reduce the growth forecast somewhat but will analyze disruption versus subsequent rebuilding effects in the field.

### Cote d’Ivoire and regional spillovers (WAEMU)
- Cote d’Ivoire is large enough to have regional implications via:
  - Financial linkages (regional bond market).
  - Migration/immigration (e.g., refugees to Liberia).
  - Trade links.
- IMF will discuss regional spillovers in the context of a Board discussion on West African Economic and Monetary Union (WAEMU) states; no numeric estimates provided yet.
- IMF stands ready to assist countries with balance-of-payments needs; support for low-income and African countries was ramped up after the global financial crisis.

### Egypt: uncertainty and financial indicators
- IMF remains in close contact with Egyptian authorities.
- Significant uncertainty about short-term economic effects; potential long-term opportunity to pursue inclusive growth and job-creating policies.
- Financial indicators: some banking-system issues noted but basic commerce appears to be continuing; no evidence provided of a major financial crash or of major capital-movement restrictions.

### Libya and the Middle East: broader policy implications
- IMF not involved in asset-freezing operations (does not hold bank accounts for people).
- Events in the Middle East highlight importance of inclusive growth, equity, and job creation for economic and political stability.

### Nigeria and exchange-rate/monetary policy advice
- IMF is not advocating a specific exchange-rate level or devaluation of the naira.
- IMF has encouraged monetary policy to focus more directly on inflation and suggested some scope for exchange-rate flexibility.

### Argentina: technical assistance and consultations
- Technical-assistance discussions with INDEC (Argentina’s statistics agency) are ongoing; no dates given for a planned technical mission to Buenos Aires.
- IMF noted there has been one trip and likely more will be needed; no speculations offered on sequencing relative to IMF reporting on national inflation index.

### United States fiscal outlook and debt-to-GDP
- On U.S. fiscal policy: IMF emphasizes the importance of a credible medium-term strategy to address long-term fiscal pressures from entitlements and other medium-term factors.
- Administration statement referenced: goal to stabilize the debt-to-GDP ratio in 2013; IMF underscores stabilizing and then reducing debt-to-GDP as important objectives.

### European Union and sovereign debt concerns
- IMF expresses confidence that EU and Eurozone members have shown the ability to come together to resolve problems and are likely to do so again; awaits the substance of agreed policies.
- No confirmation of recent requests for financial aid from Portugal to IMF in the past few days.

*Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations Department, International Monetary Fund — March 3, 2011*

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## References

- [Arab Republic of Egypt and the IMF](http://www.imf.org/external/country/EGY/index.htm)
- [Greece and the IMF](http://www.imf.org/external/country/GRC/index.htm)
- [Indonesia and the IMF](http://www.imf.org/external/country/IDN/index.htm)
- [Ireland and the IMF](http://www.imf.org/external/country/IRL/index.htm)
- [Nigeria and the IMF](http://www.imf.org/external/country/NGA/index.htm)
- [New Zealand and the IMF](http://www.imf.org/external/country/NZL/index.htm)
- [Pakistan and the IMF](http://www.imf.org/external/country/PAK/index.htm)
- [Transcripts](https://www.imf.org/en/news/searchnews)
- [Caroline Atkinson](https://www.imf.org/external/np/bio/eng/ca.htm)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Webcast](https://www.imf.org/external/mmedia/view.aspx?vid=812508352001)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/54/tr030311_