## Transcript of Press Conference by IMF Managing Director Christine Lagarde _IMF News, April 20, 2017_ ## Source details **Canonical URL:** [Transcript of Press Conference by IMF Managing Director Christine Lagarde](https://www.imf.org/en/news/articles/2017/04/20/tr042017-press-conference-by-imf-managing-director-christine-lagarde) ## Other formats - [Markdown version](/en/news/articles/2017/04/20/tr042017-press-conference-by-imf-managing-director-christine-lagarde/index.md) - [Structured JSON version](/en/news/articles/2017/04/20/tr042017-press-conference-by-imf-managing-director-christine-lagarde/index.json) - [Bundle manifest](/en/news/articles/2017/04/20/tr042017-press-conference-by-imf-managing-director-christine-lagarde/bundle-manifest.json) ## Bibliographic details - Published: April 20, 2017 --- ### Global outlook and forecasts - Global growth forecasts from the WEO cited: - 2017 growth forecast: 3.5 percent - 2018 growth forecast: 3.6 percent - 2016 growth: 3.1 percent - IMF view: global economy is "picking up momentum" but risks remain "tilted to the downside," including political uncertainty. - Participation at the Spring Meetings: 189 representatives of the membership, Finance Ministers, Governors of Central Banks. ### Policy priorities and recommended tools - IMF’s three‑pronged approach to sustain growth: - Fiscal policy - Monetary policy - Structural reforms - Priority objectives from the Global Policy Agenda: - Maintain growth momentum - Reinvigorate productivity (boosting innovation and trade) - Make growth more inclusive within countries, across countries, and between generations - Specific policy actions recommended within countries: - Make tax and benefit systems more equitable - Boost high‑quality infrastructure investment - Mitigate structural change impacts (examples provided): - Minimum wages (raising them when too low) - Expanding in‑work tax credit (e.g., Earned Income Tax Credit) - Retraining, job search, labor‑market specific policies, relocation support - Revisiting housing policies to facilitate labor mobility - Intergenerational policy focus: - Guard against excessive debt burden - Address unsustainable pension schemes - Maintain infrastructure and mitigate climate change impacts - Cross‑country cooperation priorities: - Reduce excessive external imbalances - Clamp down on tax evasion and tax avoidance - Deliver the Sustainable Development Goals to support low‑income countries - Avoid "self‑inflicted wounds" such as restrictions, subsidies, and trade distortions ### Productivity, innovation, and trade - IMF emphasis: two clear forces that drive productivity up are innovation and trade. - Trade status and concerns: - Trade is "picking up" and expected to continue increasing, but the environment is imperfect and "room to improve" exists. - Cited WTO‑related indicators: - Noncompliance with trade commitments by G20 countries rose from "a little over 2 percent" to 6.5 percent between 2015 and 2016 - About 3,000 [new restrictive rules] since 2008 - IMF supports cooperative, multilateral forums and dialogue to improve the trading system and preserve trade as an engine of growth. ### Surveillance, External Sector Report, and currency monitoring - Surveillance is one of IMF’s three missions (with lending and capacity development). - External Sector Report (ESR): - Upcoming release: next July (the ESR will assess the external position of 29 countries) - ESR informs bilateral Article IV surveillance for those 29 countries - Currency monitoring: - The ESR and EBA are evolving, sophisticated instruments that require continual improvement and judgmental inputs. - IMF does not consider it its mission to declare whether a country "is or is not a market economy." ### Country‑specific assessments and recommendations - China - Observations: - Positive recent economic performance partly due to stimulus - Rebalancing from investment toward consumption and services - Rebound in export activity as global demand picks up - IMF recommendations: - Specific recommendations on credit growth control, and reining in the housing sector (growth in housing continues despite efforts) - United States / Trump Administration - IMF stance: - Seeks cooperation and dialogue with the Administration - IMF is not a trade organization but is concerned with trade as a growth engine - Emphasis on level playing field, no distortive or protectionist measures - CEMAC (Central African Economic and Monetary Community) - Facts: - CEMAC comprises six countries - Two of the six are in IMF programs: Central African Republic and Chad - Recommendations: - Policies and reforms in the monetary area should be consistent and collective across the six countries - International support needed from IMF, African Development Bank, World Bank, and bilateral partners to address the double challenge of falling commodity prices and security issues - Egypt - IMF assessment: - Egyptian program described as "very courageous" with major reforms underway - Critical issue highlighted: inflation needs to be addressed head‑on - Program context: - The program is "the second largest financial program that we have at the moment" - Importance of public endorsement of reforms for program success - Question referenced: timing/details for second tranche of the $12 billion (not answered with a date in transcript) - India - IMF adjustments and observations: - Growth projection for 2017: 7.2 percent - Demonitization caused a slight downward revision; note that demonetization had been "remedied at about 75 percent" (latest March figure cited) - Positive view of GST implementation as a courageous reform that will substitute state taxes with a federal tax and require a digital platform - Supportive view of new Bankruptcy Law as important for corporate and banking sector reform - Brazil - Status and outlook: - Brazil has come out of a major contraction in 2016; IMF forecasts show no negative forecasts for 2017 in the set discussed - Policy assessment: welcome fiscal policy stance (intention to reduce debt) and monetary policy response to reduced inflation - Structural reforms and addressing corruption cases are key to unlocking potential; transition time may be needed - Germany and global imbalances - IMF view: - Germany's external imbalance within the Eurozone should be addressed - Part of Germany’s surplus is justifiable (aging population), but not all; reduction of the current account surplus, particularly the trade balance, is desirable - Positive notes: Germany increasing investment in child care centers, refugee integration, infrastructure; recommended investment in broadband - Greece - IMF precondition for program involvement: - Program must "walk on two legs": sustainable reforms and debt sustainability - Status: - Progress on reforms (tax reform, pension reform) but details need to be finalized - Debt Sustainability Analysis depends on a "reasonable" primary surplus objective to determine the amount of debt restructuring needed - Tax transparency and Panama Papers follow‑up - IMF observations: - Post-Panama/Bahamas Papers, multiple jurisdictions have undertaken tax pursuits, investigations, and controls to recover lost revenue - IMF supports BEPS, automatic exchange of information, and an international tax platform established with Bank, UN, and OECD - IMF provides about one third of its total capacity development on these tax issues, with a focus on helping low‑income countries raise domestic revenue - Mexico - IMF assessment: - Commends solid policies from monetary authorities and Secretary of Treasury - Noted higher oil prices and related inflation; the monetary tightening response was appropriate - Mexico continues to satisfy the requirements of the Flexible Credit Line; IMF sees no reason to challenge that status - Indonesia and inequality - Growth forecasts cited: - Current forecast: 5.1 percent - Next year forecast: 5.3 percent - Policy recommendations to address inequality: - Strengthen fiscal policy and revenue collection (example: Indonesia’s tax amnesty to repatriate revenues) - Continue structural reforms with vigor to create fiscal space for redistribution and inclusion ### Key statistics and figures cited - Global growth: 3.5 percent (2017), 3.6 percent (2018), 3.1 percent (2016) - WEO forecasts and commentary referenced (Maury Obstfeld) - India growth forecast: 7.2 percent (2017) - Demonitization remediation: "about 75 percent" (latest March figure) - ESR coverage: 29 countries - CEMAC: six countries; two in IMF programs (Central African Republic and Chad) - Panama/WTO/trade metrics: - Noncompliance by G20: from "a little over 2 percent" to 6.5 percent between 2015 and 2016 - About 3,000 [new restrictive rules] since 2008 - IMF capacity development: about a third of total on international tax platform work - Mexico: reference to $12 billion loan (question about second tranche) - Indonesia growth forecasts: 5.1 percent, 5.3 percent *Transcript of Press Conference by IMF Managing Director Christine Lagarde, April 20, 2017 — IMF Communications Department* --- ## References - [People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm) - [Arab Republic of Egypt and the IMF](http://www.imf.org/external/country/EGY/index.htm) - [Brazil and the IMF](http://www.imf.org/external/country/BRA/index.htm) - [Germany and the IMF](http://www.imf.org/external/country/DEU/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) - [Mexico and the IMF](http://www.imf.org/external/country/MEX/index.htm) - [IMF Surveillance -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Transcripts](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [If you look at the recent report that was published,](http://www.imf.org/en/publications/staff-discussion-notes/issues/2017/04/03/gone-with-the-headwinds-global-productivity-44758) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2017/04/20/tr042017-press-conference-by-imf-managing-director-christine-lagarde_