## Transcript of a Press Briefing with the IMF Managing Director

_IMF News, April 16, 2015_

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## Bibliographic details
- Published: April 16, 2015

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### Opening remarks and global outlook
- Event: Spring Meetings 2015 press briefing; Washington, D.C.; April 16, 2015.
- Managing Director: Christine Lagarde; First Deputy Managing Director: David Lipton; Moderator: Gerry Rice.
- Global growth forecasts (WEO cited by Managing Director):
  - "we expect growth to be 3.5 in 2015 and 3.8 in 2016"
- Assessment:
  - "global recovery continues."
  - Growth is "moderate and uneven."
  - Growth "is just simply not good enough" to reduce high unemployment, boost middle-class incomes, or drive poverty reduction.
- Upcoming engagement: Spring Meetings discussions with Finance Ministers and Governors of Central Banks; IMF presence in October in Lima, Peru.

### Lifting today’s growth — demand-support policy package
- Policy recommendation is a tailored package of demand-support measures that includes:
  - accommodative monetary policy where needed;
  - tightening of monetary policy where possible;
  - "smart fiscal policies adjusted to country specificities."
- Financial stability considerations to be addressed in tandem:
  - risks from "super low interest rates, volatile commodity prices and exchange rates, and from the potential rise in the U.S. short-term interest rates that is expected in the near future."
  - risks are "rising and have been rotating" — examples of rotation:
    - "from advanced economies to emerging markets;"
    - "from banks to the nonbank financial sector;"
    - "from sovereign solvency to market liquidity."
- Call for "stronger financial policies" to tackle these evolving risks.

### Getting good — raising medium-term growth potential (structural reforms)
- Observed trend: "Potential growth rates are going down; we have revised downwards."
- Contributing factors cited:
  - "changing demographics,"
  - "lower productivity factors,"
  - "in some countries, the legacy of the crisis."
- Required responses:
  - "serious, in-depth structural reforms pretty much across the board" that are "granular, adjusted to the diversity of the country’s specifics."
  - Examples of reforms: "labor market reform, infrastructure, trade, and investment in people."
  - "Implementing these reforms will call for strong leadership."

### International collaboration and IMF institutional reforms
- Assertion: "to get good, it needs to get better, and to get better, it can only be done together."
- Priorities for international cooperation:
  - lift today’s growth and tomorrow’s growth;
  - make growth "more sustainable and more inclusive."
- IMF-specific items highlighted:
  - "continue reforming the International Monetary System to make it more resilient, including efforts to better integrate fast growing emerging markets."
  - explicit reference to "quota and governance reform" and "the reform and the review of our SDR basket later this year."
- 2015 framed as "a special year for development" (financing for development, sustainable development goals, climate change); IMF will engage with membership on these long-term goals.

### Country and regional discussions — key points
- United States:
  - Cited as a bright spot: "the U.S. economy, for instance, is recovering quite strongly."
  - WEO notes that "macroeconomic risks have declined."
- Europe and Japan:
  - "the U.K. is clearly holding very strongly. the euro area is also showing signs of recovery."
  - Japan "coming out of a slight recession, is also forecast to be on the rise."
  - For Japan, monetary accommodation should be complemented by fiscal measures (consumption tax anchoring) and structural reforms (labor participation, deregulation, TPP).
- Emerging markets and specific countries:
  - Brazil: "flat and forecast to be slightly negative this year" in the global picture; later noted as suffering the most in recent months with "negative growth this year but turning positive next year and onwards" conditional on credible medium-term fiscal anchoring.
  - China: "slowing down, and foreseeably so"; technical work is underway on inclusion of the renminbi in the SDR basket; two SDR criteria emphasized — "freely usable" and export capacity.
  - Russia: "not doing well at all and is in negative territory" given oil and sanctions; President Putin cited as saying "the worst for Russia seems to be over" but IMF stresses continued importance of policy.
- Middle East:
  - High geopolitical risks; combined effect of low oil prices and geopolitical uncertainty can give "a very concerning forecast."
  - Distinction between oil exporters with or without buffers and oil importers (some of which in programs, e.g., Jordan, Tunisia, Morocco) that are "not doing badly."
- Africa (oil-exporting countries):
  - Mixed effects from dollar appreciation: some benefit from dollar pricing of oil; others face stress because sovereigns and corporates borrowed in dollar-denominated loans.
  - Policy suggestions: "keep a tight ship," phase out fiscally paid subsidies "to the maximum possible extent," and accelerate economic diversification.

### Greece and IMF operational stance
- Payment delays:
  - Historical note: "payment delays have not been granted by the [Executive] Board of the IMF in the last 30 years."
  - Payment delays treated as "additional financing" and not viewed as recommendable in the current situation.
  - Managing Director: IMF is rule-based; "all options are available to all countries" but payment delays are not a preferred course of action.
- Advice to Greece:
  - Focus on concrete measures and reforms addressing short-term liquidity and medium-term stability; "the tedious work of Financial Ministers" and lenders to "implement reforms ... to create jobs."
- IMF lending safety and institutional financing:
  - Managing Director commitment: "management will do everything it can to make sure that lending to the Fund is actually the safest lending route."
  - IMF financing capacity noted as strong across "quota, New Arrangements to Borrow, or on its bilateral loans" though Quota and Governance Reform of 2010 remains incomplete pending ratification.

### Financial stability risks, exchange rates, and coordination
- Concerns highlighted:
  - Large exchange rate movements could "reignite a currency war talk" if they continue.
  - Managing Director emphasizes IMF role in fostering cooperation and coordination among major economies and authorities.
- Recommended approach: reinforce international monetary system, expand safety nets, continue surveillance (FSAPs and bilateral/multilateral work) and engage authorities on spillovers and "spillbacks."

### Special initiatives and institutions
- SDR review:
  - Five-year review due "before the end of 2015"; technical assessment of renminbi candidacy underway with Chinese authorities.
- AIIB:
  - Asian Infrastructure Investment Bank described as "a most welcome institution" focused on infrastructure and regional projects; IMF intends to cooperate.

_Transcript of a Press Briefing with the IMF Managing Director — April 16, 2015. International Monetary Fund._

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## References

- [PRESS CENTER](http://presscenter.imf.org/)
- [Webcast](http://www.imf.org/external/spring/2015/mmedia/view.aspx?vid=4177298984001)
- [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/tr041615_