Transcript of IMF Press Briefing

IMF News, June 18, 2020

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IMF deployed "about $250 billion" across all lending facilities during the crisis.
Emergency financing delivered to "70" countries (expected by tomorrow) totaling "roughly about $25 billion".
Emergency financing characteristics:
- Very fast-disbursing: countries receive the money within days.
- "Does not carry traditional IMF conditionality."
- Intended uses: "paying for things like nurses' and doctors' salaries, and equipment, and medical equipment to deal with the crisis."
- Accountability expectations: "keep the receipts on the expenditures" — emphasis on transparency, accountability, and good governance.
Operational adjustments:
- "Doubled our access to emergency facilities."
- Expectation that concessional credit to low-income countries "to triple."
- Immediate debt relief in grant form provided to "28" poorest members.
- Debt Service Suspension Initiative: "37" countries have made formal requests.

Asia and Pacific: "seven countries have received emergency financing totaling about $1.5"
Europe: "five countries for about $1 billion"
Middle East and Central Asia: "12 countries for about $7 billion"
Latin America and the Caribbean: "about 17 countries for about 5.1 billion"
Sub-Saharan Africa: "28 countries totaling almost 10 billion"
Context on Sub-Saharan Africa: typical annual IMF lending to the region is "about $1 billion"; so "so far this year ... we have committed $10 billion to Sub-Saharan Africa" — described as "ten times the average lending to Sub-Saharan Africa" in an average year.

Spain
- Reasons for severe impact: large service sector dominated by small- and medium-sized enterprises; strong reliance on tourism; widespread use of temporary employment.
- Policy response noted: short-time work schemes, expanded unemployment benefits, "new, vital, minimum income scheme", business liquidity support via guarantee programs and tax deferrals.
- Fiscal considerations: fiscal deficit and debt will rise; "deficits can currently be financed at low interest rates"; adjustments will be needed when crisis is behind.
- Inequality and burden-sharing: crisis will increase inequality; fiscal adjustment principles should "aim to tackle inequality"; call for greater burden-sharing among "taxpayers, companies and individuals" who benefited from past trends or were less affected.

United States
- Recent data show reopening and encouraging indicators, but de facto lockdown "continued for longer than we had anticipated back in April."
- Implications: second quarter contraction "will be deeper than we had anticipated previously" and recovery "may be slower."
- Policy space: "the U.S. has significant fiscal space" that "can be fully deployed"; public debt to GDP will rise but should not constrain up-front action.

China
- First quarter contraction: "contracted in the first quarter for the first time in more than 40 years."
- Recovery signal: momentum gathered as containment measures were withdrawn; "recovery in investment and services through May has been stronger than expected."
- Risks: "balance of risks to the outlook is still on the downside"; concerns about new national lockdowns and weaker exports.

Zambia
- Zambia requested emergency assistance in addition to earlier request for support of broader reform program.
- Authorities committed to restore debt sustainability through fiscal adjustment and debt management (referenced finance minister's February statement).
- IMF virtual consultations with Zambian authorities "will be holding ... in the week beginning June 22nd" covering COVID-19 response and medium-term macro objectives and policies.

Cameroon
- Emergency financing uses: support governments' efforts to mitigate COVID-19 impact and terms-of-trade shocks.
- Legal and governance framework: funds subject to national budgetary procedures and controls per Cameroon’s "code of transparency and good governance in public finance management" and "law on the financial regime for the government and all other public entities" adopted in July 2018.
- Accountability measures: recommendation for enhanced reporting, independent audits, and ensuring funds are used for urgent crisis purposes.

Lebanon
- Discussions ongoing concerning losses in the financial system; need for a common diagnostic on "the sources of the losses and the size of the losses."
- Potential losses described as "quite large"; authorities debating feasible options for public debt sustainability and financial sector restructuring.
- It is "premature to talk about any potential access to the size of -- any potential access to IMF financing right now."
- Reform implementation: rests with the government; IMF support via advice, technical assistance, and possible program conditionality where applicable.

Argentina
- On negotiations with bondholders: IMF considers negotiations a matter between Argentina and its creditors; IMF "following developments very closely."
- Specific disbursement question: "No" — Argentine authorities have not asked for a disbursement under the current IMF standby arrangement to make a payment to creditors.

Bolivia
- IMF provided emergency assistance through the rapid financing instrument; Bolivia is among the "about 70 countries" receiving emergency support.
- Loan details: Bolivian parliament voted to reject a "$327 million loan" from the IMF (question referenced); IMF noted Bolivia has published full details of the loan in the staff report issued on May 29th.

Emergency financing is front-loaded and fast; standard conditionality is reduced but governance safeguards emphasized ("keep the receipts").
Staff reports and published materials contain program conditions and loan details referenced for further specifics.
Ongoing monitoring of global risks and readiness to add macroeconomic support if recoveries falter.

Transcript of IMF Press Briefing, June 18, 2020 — IMF Communications Department