## Transcript of IMF Press Briefing

_IMF News, September 15, 2022_

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## Bibliographic details
- Published: September 15, 2022

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### IMF-wide activities, financing, and new instruments
- Since the beginning of the pandemic, the IMF has lent over $268 billion to 93 countries.
- That pandemic lending includes $27 billion to low-income countries.
- Since the beginning of the war in Ukraine (Russia's invasion of Ukraine), 16 member countries have made 20 requests for financing totaling about 87.2 billion.
- The $650 billion SDR allocation from about a year ago remains part of IMF support efforts.
- The Resilience and Sustainability Trust (RST) is expected to begin with an initial capital of about $45 billion; the IMF is very close to that and expects to operationalize the RST around the Annual Meetings.
- The IMF has begun discussions with its Executive Board on a potential new emergency financing instrument, the "food shock window"; its use would be contingent on Board approval and, if approved, is intended to provide immediate short-term support in the ballpark of prior emergency support (referenced as similar to the prior $1.4 billion emergency financing for Ukraine).

### Ukraine: emergency support, pathway to a full program, and administered account
- Immediate/emergency support:
  - The IMF previously provided $1.4 billion of emergency financing to Ukraine just before the Russian invasion.
  - The proposed food shock window was discussed with President Zelenskyy; if Board-approved it could provide very-short-term additional support "in the ballpark" of the prior $1.4 billion.
- Path to a full-fledged program:
  - Managing Director and President Zelenskyy discussed both short-term emergency support and longer-term potential for building toward a full-fledged IMF program.
  - Fund staff will begin engagement with Ukraine counterparts in the coming weeks; an in-person IMF mission is planned in the near future, likely to be in Vienna, to begin technical discussions on budget, revenues, resource needs, and the pathway to a program.
- Administered Account for Ukraine:
  - Donor participation to date includes Canada and Germany; the Netherlands has signaled it would make a commitment.
  - Further commitments are expected in the run up to, and during, the Annual Meetings.
  - The IMF did not provide a total amount committed to the Administered Account during the briefing and stated it would provide that information after the meeting.

### Global economic outlook, inflation, and recession risks
- July World Economic Outlook (as cited):
  - Global growth revised to 3.2 percent in 2022 and 2.9 percent in 2023.
- Recent developments worsening the outlook:
  - Continued war in Ukraine, supply chain issues, gas supply issues from Russia to Europe, elevated commodity prices, tightening financial market conditions, China's COVID-19 lockdowns and real estate problems, and a strong dollar.
- Inflation and policy stance:
  - Inflation has risen faster than expected and is described as "stubborn."
  - The IMF emphasizes the importance of remaining "stubborn" in addressing inflation even as interest rate increases can slow growth.
- Recession risk characterization:
  - The IMF expects the slowdown to translate into recession in some countries.
  - Statement paraphrase from the Managing Director: '23 is going to be tougher than '22; some countries will face recession in '23; it is too early to say whether there will be a widespread global recession.
  - Even where growth remains positive, many people will feel like they are in recession.
- Humanitarian/economic impact example:
  - IMF blog cited an estimate that hunger in Africa has soared by a third in the last two years, affecting 123 million people who cannot meet minimum food consumption needs.

### Country engagement highlights and program/status updates
- Argentina:
  - Minister Massa met with IMF Managing Director; Fund staff and Argentine authorities have had "very professional" and "productive" technical discussions.
  - The IMF aims to conclude a Staff-Level Agreement "very soon in the coming days"; Board consideration follows staff-level work (no specific dates provided).
  - Kristalina Georgieva commented that she "came out with the sense that we have a partner that we can work well" after meeting Minister Massa.
  - No specific payment or disbursement details were provided in the briefing beyond that payments on Argentina’s side were being handled "in an orderly way" as far as known.
- Zambia:
  - IMF Board approved $1.3 billion of support for Zambia’s program of economic reform.
  - Implementation of the program is contingent on securing timely debt restructuring agreements with external creditors.
  - The IMF launched a Governance Diagnostic Assessment for Zambia at the authorities’ request; the final report will be published by the end of the year.
  - Debt sustainability: IMF/World Bank joint Debt Sustainability Analysis indicates a present value of external debt target of 84 percent of exports as a realistic target to restore debt sustainability and absorb shocks; a 140 percent debt-to-exports threshold was also referenced in public discussion. The IMF described the 84 percent present-value-of-exports target as not arbitrary and grounded in the joint DSA framework.
- Ghana:
  - Ghana has requested a program; an IMF staff team visited Accra in July for initial discussions and the Mission Chief recently visited again.
  - Further visits are planned in the coming weeks; the IMF will conduct an updated Debt Sustainability Analysis as part of program assessment.
  - IMF notes that Ghana has been hit by global shocks (pandemic, war in Ukraine) at a time of limited fiscal space.
- Suriname:
  - The IMF has a program with Suriname; further work is required, including securing debt restructuring agreements with external creditors (creditors include China, India, and other creditors referenced in discussions).
  - The IMF continues to work with Suriname to get the program back on track and is mindful of population burdens from high food and energy prices.
- Malawi:
  - Malawi has requested an Extended Credit Facility Arrangement; discussions have been described as very productive and ongoing, largely remote to date.
  - IMF assesses Malawi’s public debt as unsustainable; authorities have engaged debt advisors to restore debt sustainability. The IMF does not directly participate in detailed creditor negotiations, but monitors and supports where appropriate.
- Serbia:
  - Serbian authorities have expressed interest in a Stand-By arrangement; IMF discussions to assess needs and appropriate policies will follow staff-level engagement and require Board approval.
- Lebanon:
  - Progress on critical prior actions agreed under the April Staff Level Agreement has been slow; delayed implementation increases costs to Lebanon and its people.
  - An IMF staff team will visit Beirut from September 19 to discuss recent developments and to help speed up implementation of pending prior actions; a full mission will follow after a new government is formed.
  - Timely implementation of prior actions and reforms is critical to end the crisis and prevent further deterioration of living conditions.
- Ethiopia:
  - No firm update or mission date was provided; the IMF had hoped for progress under the Common Framework for debt restructuring but had no new details at the briefing.
- Egypt:
  - Egyptian authorities have requested a program; discussions are ongoing and the IMF is working closely with the authorities to support economic stability and sustainable medium-term growth. No agreement date was provided.

### Debt restructuring, policy conditionality, governance, and transparency
- IMF role and approach:
  - IMF determines the financing envelope required to restore debt sustainability based on realistic joint Debt Sustainability Analyses (with the World Bank where applicable).
  - Decisions on which debts to restructure and the specifics of creditor negotiations are made by authorities with their legal and financial advisors; the IMF supports and assesses but does not directly negotiate on creditors’ behalf.
  - Strengthening governance, improving public financial management, and reducing corruption risks are priorities in IMF-supported programs (explicit example: Zambia program and Governance Diagnostic Assessment).
- Transparency and accountability:
  - The IMF supports publication of diagnostic and governance assessments; for Zambia, the Governance Diagnostic final report will be published by the end of the year.

### Timing and upcoming IMF engagement
- Annual Meetings and forecasts:
  - The IMF will present updated forecasts and country assessments at the Annual Meetings, including the next World Economic Outlook (WEO), Global Financial Stability Report (GFSR), and Fiscal Monitor.
  - The Managing Director will deliver a curtain-raiser speech on October 6 at Georgetown University as part of the lead-up to the Annual Meetings.
- RST operationalization:
  - The IMF expects to operationalize the RST around the Annual Meetings, with about $45 billion initial capital targeted and approximately $40 billion in pledges reported at the time of the briefing.
- Missions and near-term travel:
  - IMF in-person mission to Ukraine likely in Vienna (near future) to begin technical program discussions.
  - IMF staff team to visit Beirut from September 19 to discuss Lebanon’s pending prior actions.

*Transcript of IMF Press Briefing, September 15, 2022.*

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## References

- [https://www.imf.org/sitecore/service/notfound.aspx?item=master%3A%7B8D1E6EAB-2E82-47BE-B9FE-258FFB4CBC4A%7D%40en](https://www.imf.org/sitecore/service/notfound.aspx?item=master%3A%7B8D1E6EAB-2E82-47BE-B9FE-258FFB4CBC4A%7D%40en)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/09/16/tr091522-com-press-briefing_