Transcript of IMF Press Briefing
IMF News, September 24, 2020
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- Published: September 24, 2020
IMF response to Covid-19: emergency financing and lending
- Emergency financing provided to 76 countries, totaling around $31 billion.
- Assistance includes support to 47 low income countries, totaling over $10 billion to those countries.
- Immediate debt relief in the form of grants provided to all 29 of the poorest member countries eligible under the Catastrophe Containment and Relief Trust (CCRT).
- Total IMF lending commitments around $270 billion, with about one third of that having been approved since the end of March (roughly about $90 billion approved since the crisis began).
- Data sources: IMF Covid policy tracker and IMF lending tracker on IMF.org.
Major events, publications, and calendar items
- Managing Director Kristalina Georgieva to represent the IMF at the virtual UN General Assembly; participated in Climate Week; to take part in Financing for Development session on September 29 and a Barron's event on inequality on September 29.
- Blog published on how the European Union can meet its climate mitigation goals by Alfred Kammer, Dora Iakova, and James Roaf.
- Annual Meetings schedule:
- Formal week of the Annual Meetings: October 11 to 16 (virtual).
- Curtain raiser speech by Kristalina Georgieva in partnership with the London School of Economics: Tuesday, October 6.
- World Economic Outlook (WEO) and Global Financial Stability Report (GFSR) release: Tuesday, October 13.
- Fiscal Monitor release: Wednesday, October 14.
- WEO analytical chapters released the week of October 5.
- GFSR and Fiscal Monitor analytical chapters released the week of October 19.
- Notable Annual Meetings events: conversation between Kristalina Georgieva and Melinda Gates; Global Debate with Kristalina Georgieva and Christine Lagarde; Mobilizing with Africa conference: October 9; cross-border payments seminar: Monday, October 19.
- Regional press briefings during the week of October 19.
Policy guidance and thematic priorities
- Health sector investment:
- Joint IMF/NITI Aayog/Ministry of Finance study for India: to achieve high performance in health related sustainable development goals, India would need to gradually increase total spending in the healthcare sector from the current 3.7 percent of GDP.
- Structural reforms emphasized for medium-term inclusive and sustainable growth: infrastructure, land reform, product market and labor market reform, increasing female labor force participation, access to finance, and better jobs.
- Support for policies that improve efficiency and competitiveness to integrate countries into global value chains (trade, investment, technology).
Outlook and risks for emerging markets and developing countries
- Recent data since the June 24 WEO update indicate parts of the global economy beginning to turn the corner; second quarter performance in China and a number of advanced economies was better than anticipated; global trade slowly beginning to recover.
- Persistent challenges and heightened risk:
- Emerging markets other than China remain precarious.
- Continued strains from plunging domestic demand, commodity price drops, lower export demand, sharp declines in tourism, and shrinking remittances.
- Small developing states, especially tourism-dependent, face sharp contractions and large financing needs.
- Concern that the crisis will reverse gains in poverty reduction and rollback progress toward the Sustainable Development Goals.
- Updated forecasts and assessment to be released on October 13 with the WEO.
Debt, DSSI, and creditor engagement
- DSSI status and IMF position:
- Well over half of potentially eligible countries have applied for participation in the Debt Service Suspension Initiative (DSSI).
- Official bilateral creditors agreed to provide relief until the end of this year (end of 2020).
- IMF together with the World Bank have expressed support for extending the DSSI beyond 2020; extension will be discussed at the Annual Meetings and reported to the G20.
- IMF and World Bank support efforts by the G20 and creditor countries to encourage private sector creditors to participate in the DSSI; private sector participation remains voluntary.
- IMF advice to countries: take steps to ensure debt remains sustainable, including appropriate fiscal consolidation in the medium term while prioritizing pandemic response now.
- Specific country debt dialogues:
- Zambia: discussions with Zambian authorities on IMF support are ongoing; complex creditor base expected to make debt restructuring take time.
- Chad, Angola, and other Sub-Saharan African cases noted as seeking creditor relief or restructuring engagement.
Country engagements and program updates
- India:
- Pandemic highlighted need to increase health investment; current health spending cited at 3.7 percent of GDP.
- The Atma Nirbhar Bharat (“self-reliant India”) package supported the Indian economy and mitigated downside risks.
- Priority: policies to improve efficiency and competitiveness and further integrate India into global value chains.
- Lebanon:
- IMF stands ready to engage with the new government after formation is completed and to redouble efforts to help Lebanon overcome its social and economic crisis.
- Technical assistance offered on issues following the port explosion; need for comprehensive reforms to restore confidence and investment prospects.
- Argentina:
- IMF maintains a fluid and constructive dialogue with Argentine authorities regarding policy measures including recent foreign exchange controls.
- IMF staff to hold a staff visit to Argentina starting in early October (format physical or virtual depends on pandemic conditions) to learn about authorities' plans and priorities for an IMF-supported program; no fixed deadline for conclusions.
- Financing associated with any new IMF-supported program would be subject to IMF Executive Board approval and would help meet balance of payments needs including official sector obligations.
- Costa Rica:
- IMF Executive Board approved emergency financial assistance of about $504 million for the pandemic response; ratified by Costa Rican Legislative Assembly at the end of August.
- Costa Rica has formally requested IMF support through an Extended Fund Facility (around $1.75 billion) to help restore sustainable, inclusive growth while protecting the most vulnerable; IMF staff and authorities in initial stages of engagement.
- Angola:
- IMF Executive Board completed the third review of Angola's program under an Extended Fund Facility and approved a disbursement of $1 billion to support the country during the crisis and unlock budget support from other partners.
- Reports of creditor arrangements noted; IMF refers country-specific creditor negotiations to respective authorities and creditors.
Multilateral cooperation and role of China
- Importance of international cooperation emphasized for vaccine production and distribution, trade, technology, and climate change.
- IMF welcomes China's contributions to the Catastrophe Containment and Relief Trust and participation in the DSSI; expects China to continue playing a leadership role in helping low-income countries navigate the crisis.
Key statistics and dates (quoted exactly)
- Emergency financing to 76 countries.
- Total emergency financing totaling around $31 billion.
- Assistance to 47 low income countries.
- Over $10 billion to low income countries.
- Grants to all 29 of our poorest member countries eligible under the Catastrophe Containment and Relief Trust.
- Total lending commitments at this point for the IMF are now around $270 billion -- 270, with about one third of that having been approved since the end of March, since the crisis began, so roughly about $90 billion of that approved since the crisis began.
- Current healthcare spending referenced for India: 3.7 percent of GDP.
- Annual Meetings: week of October 11 to 16.
- Curtain raiser speech: October 6.
- WEO and GFSR release: Tuesday the 13th of October.
- Fiscal Monitor release: Wednesday the 14th of October.
- Mobilizing with Africa conference: October 9.
- Cross border payments seminar: Monday the 19th of October.
- Regional press briefings: week of the 19th of October.
- WEO analytical chapters: week of October 5.
- GFSR and Fiscal Monitor chapters: week of the 19th.
- Costa Rica emergency financial assistance: about $504 million.
- Costa Rica Extended Fund Facility request size referenced: around $1.75 billion.
- Angola IMF disbursement approved: $1 billion.
- Press briefing date: September 24, 2020.
Transcript of IMF Press Briefing — September 24, 2020 — IMF Communications Department.