{
  "title": "Transcript of October 2022 MD Kristalina Georgieva Press Briefing on GPA",
  "publication": "IMF News, October 13, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/10/13/tr101322-transcript-of-md-press-briefing-annual-meetings",
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  "summary": "Transcript of October 2022 MD Kristalina Georgieva Press Briefing on GPA",
  "publishDate": "2022-10-13",
  "sections": [
    {
      "heading": "Key messages",
      "content": "- The global economy has been hit by successive shocks: an unrelenting pandemic, Russia's invasion of Ukraine, climate disasters on all continents, and now a cost of living crisis.\n- The IMF cut its growth forecast for 2023 to 2.7 percent.\n- Uncertainty is exceptionally high: the World Economic Outlook shows a one in four chance, in other words, 25 percent chance that global growth could drop to a historic low of 2 percent next year.\n- The IMF’s Global Policy Agenda calls for steady hands on policy levers and coordinated international action to minimize policy missteps and poor communication."
    },
    {
      "heading": "Economic outlook and risks",
      "content": "- Growth and inflation:\n  - IMF growth forecast for 2023: 2.7 percent.\n  - One in four chance (25 percent) global growth could drop to 2 percent next year.\n  - Risk of global recession assessed at 25 percent.\n  - One third of the world economy equivalent will experience two or more consecutive quarters of negative growth.\n- Inflation dynamics:\n  - Rising interest rates come at some cost to growth, but insufficient tightening risks higher rates for longer.\n  - Monetary policy must act decisively when necessary and communicate clearly to avoid de-anchoring inflation expectations.\n  - Fragmentation and shifts in supply chains may create more permanent cost-structure changes that monetary policy cannot address."
    },
    {
      "heading": "Policy priorities and recommendations",
      "content": "- Bring inflation down:\n  - Central banks should take decisive action where necessary and communicate intentions clearly.\n- Responsible fiscal policy now:\n  - Prioritize protecting vulnerable households and businesses.\n  - Fiscal measures should be well targeted and temporary given high debt levels post-pandemic.\n  - Avoid across-the-board fiscal support that is neither effective nor affordable.\n  - Ensure fiscal and monetary policy go hand in hand; “When monetary policy puts a foot on the brakes, fiscal policy should not step on the accelerator.”\n- Safeguard financial stability:\n  - Macroprudential policies should be vigilant and proactively address pockets of vulnerability.\n- Support vulnerable emerging markets and developing countries:\n  - Higher borrowing costs, a stronger dollar, and capital outflows are a triple blow—especially for countries with high debt.\n  - Stronger international efforts are paramount for low-income countries, where over 60 percent are at or near debt distress.\n- Transformational reforms for the future:\n  - Address climate change, make digitalization work for people, and tackle inequality.\n  - Act with urgency and together."
    },
    {
      "heading": "IMF support, lending, and instruments",
      "content": "- Financial support since the pandemic:\n  - Financial support provided to 93 countries, some $260 billion.\n- Since the Russian invasion in February:\n  - Supported 18 new programs (new programs and augmentations) with close to $90 billion.\n  - There are an additional 28 requests for support from the Fund.\n- SDRs and on-lending:\n  - $650 billion SDR allocation noted.\n  - Ambition of mobilizing $100 billion in lending of SDRs for countries in strong positions.\n  - Progress: 80 percent to target; “We have just crossed over $80 billion.”\n- Resilience and Sustainability Trust:\n  - First-ever longterm financing instrument now operational.\n  - Pledges of $40 billion.\n  - Staff-level agreements for the first three countries: Barbados, Costa Rica, and Rwanda.\n- Food Shock Window:\n  - Emergency financing window opened to provide rapid financing to urgent needs.\n- IMF lending capacity and resources:\n  - Slightly over $700 billion available to lend.\n  - Lending capacity referenced as 1 trillion.\n  - On average around 20 percent of the SDRs strong economies have received; France indicated 30 percent.\n  - The IMF may appeal to members to do more if needed."
    },
    {
      "heading": "Debt, debt resolution, and the Common Framework",
      "content": "- Debt challenges:\n  - Over 60 percent of low-income countries are at or near debt distress (also referenced as 60 percent of [low-income] countries are at or near debt distress).\n- Common Framework:\n  - IMF pressing for a more effective debt resolution mechanism.\n  - Goal: make the Common Framework more predictable with guidelines and equality of treatment for all creditors, public and private.\n  - Recent modest successes: Zambia and Chad.\n  - Need to draw lessons from Zambia and Chad to encourage other countries to use the Common Framework.\n- Donor coordination:\n  - Exploring ways to expand coordinated donor approaches to middle-income countries, e.g., Sri Lanka."
    },
    {
      "heading": "Regional notes and vulnerabilities",
      "content": "- Food insecurity:\n  - 345 million people are acutely food insecure.\n  - 48 countries identified as particularly severely impacted by food insecurity; many in Sub-Saharan Africa.\n- Sub-Saharan Africa:\n  - Region in a precarious position due to pre-existing climate-related food insecurity and COVID scarring (including education disruptions).\n  - Positive developments: many countries increased tax-to-GDP ratios and built stronger fundamentals.\n  - Policy advice: stick to prudent macroeconomic policies, act early on debt problems, and use multilateral support (IMF, World Bank, WFP, FAO, WTO).\n  - Emphasized priority: implement major integration efforts such as the Continental Free Trade Agreement.\n- Lebanon:\n  - Inflation at extreme levels in Lebanon (example noted of inflation “at 200 percent or more” contextually discussed); IMF staff-level agreement exists but prior actions needed to move forward.\n  - A maritime border agreement with Israel is noted as potentially positive for energy prospects, conditional on political commitment to stability.\n- India:\n  - Described as a bright spot underpinned by structural reforms and digitalization.\n  - Anticipation that India’s G20 Presidency could focus on digitalization, digital money, cross-border payments, quota review, and renewables."
    },
    {
      "heading": "Scenarios and probabilities highlighted",
      "content": "- Global growth could fall to 2 percent next year: one in four chance (25 percent).\n- Risk of global recession: 25 percent.\n- One third of the world economy equivalent may face two or more consecutive quarters of negative growth."
    },
    {
      "heading": "Q&A highlights (policy and governance)",
      "content": "- On central banks (U.S. Fed and others):\n  - Central banks’ mandate is domestic price stability; communication and use of instruments like swap lines can mitigate spillovers.\n  - Recent Fed and U.S. Treasury actions noted as prudent; U.S. has supported food security and multilateral institutions.\n- On the pace of rate hikes:\n  - Acknowledged concerns about financial stability; emphasized need for clear communication and coordination with fiscal policy.\n- On IMF governance and quota review:\n  - Sixteenth General Review of Quotas is important for a financially strong and fairly representative IMF.\n  - Deadline for quota decisions mid December 2023; possibility of acceleration under G20 leadership.\n- On IMF flexibility:\n  - IMF programs are not set in stone; the Fund will monitor and act in the interest of member countries’ people.\n- On availability for members:\n  - Encouraged members to use IMF precautionary facilities if they need buffers; “we are far from being constrained.”\n\nTranscript of October 2022 MD Kristalina Georgieva Press Briefing on GPA — October 13, 2022, IMF Communications Department.\n\n---\n\n\n References\n\n- https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva\n- Ukraine and the IMF\n- Argentina and the IMF\n- India and the IMF\n- Lebanon and the IMF\n- United States and the IMF\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/10/13/tr101322-transcript-of-md-press-briefing-annual-meetings"
    }
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    "Published: October 13, 2022",
    "The global economy has been hit by successive shocks: an unrelenting pandemic, Russia's invasion of Ukraine, climate disasters on all continents, and now a cost of living crisis.",
    "The IMF cut its growth forecast for 2023 to 2.7 percent.",
    "Uncertainty is exceptionally high: the World Economic Outlook shows a one in four chance, in other words, 25 percent chance that global growth could drop to a historic low of 2 percent next year.",
    "The IMF’s Global Policy Agenda calls for steady hands on policy levers and coordinated international action to minimize policy missteps and poor communication.",
    "Growth and inflation:",
    "Inflation dynamics:",
    "Bring inflation down:",
    "Responsible fiscal policy now:",
    "Safeguard financial stability:",
    "Support vulnerable emerging markets and developing countries:",
    "Transformational reforms for the future:",
    "Financial support since the pandemic:",
    "Since the Russian invasion in February:",
    "SDRs and on-lending:",
    "Resilience and Sustainability Trust:",
    "Food Shock Window:",
    "IMF lending capacity and resources:",
    "Debt challenges:",
    "Common Framework:",
    "Donor coordination:",
    "Food insecurity:",
    "Sub-Saharan Africa:",
    "Lebanon:",
    "India:",
    "Global growth could fall to 2 percent next year: one in four chance (25 percent).",
    "Risk of global recession: 25 percent.",
    "One third of the world economy equivalent may face two or more consecutive quarters of negative growth.",
    "On central banks (U.S. Fed and others):",
    "On the pace of rate hikes:",
    "On IMF governance and quota review:",
    "On IMF flexibility:",
    "On availability for members:",
    "[https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)",
    "[Ukraine and the IMF](http://www.imf.org/external/country/UKR/index.htm)",
    "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)",
    "[India and the IMF](http://www.imf.org/external/country/IND/index.htm)",
    "[Lebanon and the IMF](http://www.imf.org/external/country/LBN/index.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[Transcripts](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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