{
  "title": "IMF Managing Director Press Conference",
  "publication": "IMF News, October 6, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2016/10/06/am16-tr100616-imf-managing-director-press-conference",
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  "summary": "Expressed deep concern for countries affected by Hurricane Matthew, with specific reference to Haiti and readiness to deploy rapid facility lines promptly.",
  "publishDate": "2016-10-06",
  "sections": [
    {
      "heading": "Opening and immediate concerns",
      "content": "- Expressed deep concern for countries affected by Hurricane Matthew, with specific reference to Haiti and readiness to deploy rapid facility lines promptly.\n- Speakers: Managing Director, IMF; First Deputy Managing Director, IMF; Director, Communications Department, IMF."
    },
    {
      "heading": "Global growth outlook and risks",
      "content": "- Forecasts:\n  - 2016 growth: 3.1 percent\n  - 2017 growth: 3.4 percent\n- Characterization:\n  - Advanced economies: outlook remains subdued.\n  - Emerging and developing economies: guarded optimism with great diversity.\n  - Prospects for low‑income countries: becoming more challenging, particularly sub‑Saharan Africa.\n- Key assessment: \"Growth is too low for too long and benefiting too few,\" creating fertile ground for political dynamics that can further depress global growth.\n- Brexit scenario planning: IMF prepared baseline, mild, and very adverse scenarios; current developments viewed as aligning with the mild scenario rather than the adverse scenario."
    },
    {
      "heading": "Major policy prescriptions (three‑pronged approach)",
      "content": "- Core prescription: urgent action to implement a mix of monetary policy, fiscal policy, and structural reforms simultaneously.\n- Specific recommendations:\n  - Use fiscal policy where demand is lacking and monetary policy is overstretched.\n  - Reallocate spending within existing budgets toward productivity‑enhancing areas (e.g., research and development, infrastructure) when fiscal space is limited.\n  - Anchor policies in credible, medium‑term frameworks to support short‑term growth while keeping inflation expectations anchored and debt sustainable.\n  - Strengthen international cooperation to realize positive spillovers and raise growth; references to the Brisbane, Antalya, and Hengzhou G20 agendas.\n  - Pursue \"inclusive globalization\" to ensure trade and technological change benefit broad segments of societies and address those at risk of being left out by automation, digital economy, or supply‑chain shifts.\n  - Invest in education and infrastructure (including \"soft infrastructure\") to equip young workforces and facilitate transitions from agriculture to industry and services."
    },
    {
      "heading": "IMF institutional actions and financing capacity",
      "content": "- Concessional facilities:\n  - Board approved extension of zero interest rates on all Fund concessional facilities until 2018, and thereafter if interest rates remain low around the world.\n- Overall lending capacity:\n  - Aim to maintain overall lending capacity of close to a trillion dollars by extending access to bilateral borrowing agreements.\n  - New bilateral agreements being signed will run at least through the end of 2019 and serve as a third line of defense.\n  - Reported pledges: US$ 344 billion from 26 members to date.\n- Lines of defense (as stated):\n  - First line: quota\n  - Second line: New Arrangements to Borrow\n  - Third line: bilateral loans"
    },
    {
      "heading": "Regional and country issues",
      "content": "- China:\n  - Celebrated inclusion of the renminbi in the SDR basket among five currencies; seen as anchoring China among large, international, open economies.\n  - IMF involvement: ongoing cooperation to reform financial markets and improve supervision; further reforms expected.\n- Greece:\n  - IMF completed an Article IV; more work needed and a team will be sent to assess commitments under the ESM program.\n  - IMF is not participating in any Greek program at this point.\n  - IMF position: structural reforms must be delivered and debt must be sustainable; current debt assessed as not sustainable.\n- Sub‑Saharan Africa:\n  - Overall growth for sub‑Saharan Africa cited as 1.4 percent.\n  - Concerns about large youth cohorts (close to 200 million Africans below 30 by 2020 referenced in questions) and the need for infrastructure and education to absorb them into productive employment.\n  - Spillovers from China are recognized; IMF advocates diversification away from natural‑resource dependence.\n- Latin America and Brazil:\n  - IMF regional growth: Latin America at minus 0.6 percent (attributed largely to Brazil and Venezuela).\n  - Brazil forecasts: IMF WEO projects Brazil 2017 growth at 0.5 percent; World Bank report cited 1.1 percent for the same year (differences due to methodologies and references).\n- United Kingdom:\n  - IMF had warned of consequences ranging from \"pretty bad to very, very bad\" in the event of a Brexit; current assessment views developments as closer to the mild scenario thanks to policy responses and international cooperation."
    },
    {
      "heading": "Financial sector and monetary policy observations",
      "content": "- Financial stability:\n  - Interconnection highlighted across financial, trade, growth, and debt directions.\n  - Banks, insurers, and pension funds faced with challenges due to prolonged low or occasionally negative interest rates; business models may need re‑architecture.\n  - Deutsche Bank referenced in questions; IMF notes GFSR does not single out Deutsche Bank but calls for banks globally to reassess business models.\n- Monetary policy:\n  - Monetary policy has been heavily relied upon and has deployed unconventional tools; effectiveness is limited when used in isolation.\n  - Emphasis on combining monetary policy with fiscal and structural measures."
    },
    {
      "heading": "Political economy and legitimacy concerns",
      "content": "- Acknowledged public perceptions that the system may be \"rigged\" and the importance of a level playing field.\n- IMF stance:\n  - Rules‑based, quota‑based institution aiming to improve participation, representation, and voice to better reflect the global economy.\n  - Rules may change through discussion, dialogue, consultations, and consensus or majority decision processes."
    },
    {
      "heading": "Closing priorities and expectations",
      "content": "- Call to action for Finance Ministers and Central Bank Governors: return home ready to implement policies that will propel inclusive growth.\n- Upcoming events and cooperation:\n  - New bilateral borrowing agreements signing sessions planned during the next two days.\n  - 2018 Annual Meetings to be hosted by Indonesia, with regional cooperation (ASEAN, ASEAN+3, Chiang Mai initiative) highlighted as positive for growth.\n\nIMF Managing Director Press Conference, October 6, 2016 — IMF Communications Department\n\n---\n\n\n References\n\n- Gerry Rice\n- PRESS CENTER\n- Christine Lagarde\n- David Lipton\n- my speech in Chicago\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2016/10/06/am16-tr100616-imf-managing-director-press-conference"
    }
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    "Published: October 6, 2016",
    "Expressed deep concern for countries affected by Hurricane Matthew, with specific reference to Haiti and readiness to deploy rapid facility lines promptly.",
    "Speakers: Managing Director, IMF; First Deputy Managing Director, IMF; Director, Communications Department, IMF.",
    "Forecasts:",
    "Characterization:",
    "Key assessment: \"Growth is too low for too long and benefiting too few,\" creating fertile ground for political dynamics that can further depress global growth.",
    "Brexit scenario planning: IMF prepared baseline, mild, and very adverse scenarios; current developments viewed as aligning with the mild scenario rather than the adverse scenario.",
    "Core prescription: urgent action to implement a mix of monetary policy, fiscal policy, and structural reforms simultaneously.",
    "Specific recommendations:",
    "Concessional facilities:",
    "Overall lending capacity:",
    "Lines of defense (as stated):",
    "China:",
    "Greece:",
    "Sub‑Saharan Africa:",
    "Latin America and Brazil:",
    "United Kingdom:",
    "Financial stability:",
    "Monetary policy:",
    "Acknowledged public perceptions that the system may be \"rigged\" and the importance of a level playing field.",
    "IMF stance:",
    "Call to action for Finance Ministers and Central Bank Governors: return home ready to implement policies that will propel inclusive growth.",
    "Upcoming events and cooperation:",
    "[Gerry Rice](http://www.imf.org/external/np/bio/eng/gr.htm)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Christine Lagarde](http://www.imf.org/external/np/omd/bios/cl.htm)",
    "[David Lipton](http://www.imf.org/external/np/omd/bios/dl.htm)",
    "[my speech in Chicago](https://www.imf.org/en/News/Articles/2016/09/27/AM16-SP09282016-Boosting-Growth-Adjusting-to-Change)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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