## Transcript of IMF Press Briefing

_IMF News, September 12, 2024_

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## Bibliographic details
- Published: September 12, 2024

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### Announcements and logistics
- Briefing embargoed until 11:00 a.m. Eastern Time in the United States.
- Managing Director Kristalina Georgieva:
  - Will attend the informal Ecofin meeting on Friday, September 13th, in Budapest, Hungary; will hold bilateral meetings while in Budapest.
  - Will be in New York City during the week of September 23rd for the 79th General Assembly of the United Nations; will hold bilateral meetings and participate in multiple events.
- First Deputy Managing Director Gita Gopinath:
  - Will deliver the Whitaker Lecture at the Bank of Ireland on Wednesday, September 18th; an embargoed draft of the speech will be available the day before on the IMF's Press Center.
- Deputy Managing Director Bo Li:
  - Will visit Astana, Kazakhstan on Monday, September 16th.
- Deputy Managing Director Kenji Okamura:
  - Will be in Mongolia on October 3rd and 4th.
- ECB President Christine Lagarde:
  - Will give a lecture at the 2024 Michel Camdessus Central Banking Conference on Friday, September 20th, followed by a one-on-one conversation with MD Kristalina Georgieva at IMF headquarters in Washington, D.C.

### United States economy and Federal Reserve outlook
- Key observations:
  - The U.S. economy has performed "remarkably strong" over the past few years; the U.S. is described as "the only G-20 economy whose GDP level now exceeds the pre-pandemic trend."
  - Disinflation has occurred with less cost than feared; Fed actions, supply-side gains, and strong productivity growth aided the disinflation process.
- Forecasts and timing:
  - Core PCE inflation is expected to end this year around 2.5 percent and to be back to the 2 percent target by mid 2025.
  - IMF expects U.S. GDP growth on a fourth quarter over fourth quarter basis by the end of this year to be around 2 percent.
  - The balance of risks to inflation has shifted; upside risks are "less pronounced" though not entirely gone.
  - The IMF views the "imminent start of a loosening cycle as telegraphed by the Fed" as appropriate, with the Fed needing to "calibrate the pace and extent of rate cuts with incoming economic data going forward."
- Process note:
  - The World Economic Outlook (WEO) update in October will take a fresh look at data and forecasts.

### Ukraine — Staff-Level Agreement and financing
- Staff-Level Agreement:
  - On September 10th, IMF Staff and Ukrainian authorities reached a Staff-Level Agreement for the Fifth Review under the EFF Program.
  - Subject to Executive Board approval, Ukraine would have access to $1.1 billion.
  - Program performance described as "strong"; authorities met all end-June quantitative performance criteria and structural benchmarks for the Fifth Review.
  - Understandings reached on policies and reforms to sustain macroeconomic stability during the war.
- Domestic revenue mobilization:
  - Domestic revenue mobilization over the medium term is a "key pillar" of the program to create space for critical spending and to preserve buffers and restore fiscal and debt sustainability.
- G7 $50 billion pledge and ERA:
  - G7 authorities are in intensive discussions on modalities, terms, and conditions to fulfill their pledge to provide $50 billion in financial support to Ukraine via the Extraordinary Revenue Acceleration (ERA).
  - IMF emphasizes that such support should be provided in a way consistent with restoring debt sustainability.

### Pakistan — EFF timetable and assurances
- Staff-Level Agreement and Board scheduling:
  - IMF Staff reached a Staff-Level Agreement with Pakistani authorities on a new 37-month EFF arrangement on July 12th, 2024.
  - The Board meeting is scheduled to take place on September 25th.
  - Scheduling follows Pakistan obtaining necessary financing assurances from its development partners.
- Context:
  - The new EFF arrangement follows the successful implementation of the 2023 9-month Stand-by Arrangement.
  - Consistent policy making has supported economic stability in Pakistan, including a resumption of growth, significant disinflation, and a significant increase in international reserves.

### Russia — Resumption of Article IV consultations
- Legal/obligation basis:
  - Article IV Consultations are mutual obligations under the IMF Articles of Agreement.
- Rationale for resumption:
  - Since the 2022 invasion of Ukraine, Russia’s economic situation was "exceptionally unsettled," complicating Article IV analysis; with a more settled economic situation, consultations are resuming.
- Mission format and timing:
  - Team will hold virtual discussions from September 16th and will travel to Russia for in-person meetings.
  - The mission will meet with Russian authorities and a number of different stakeholders to discuss developments, prospects, and policies.
- Note on Executive Director nomination:
  - The election and voting process for Executive Directors at the IMF is underway; IMF management did not comment further on specific nominations.

### Sub-Saharan Africa — Kenya and regional context
- Regional pressures:
  - Sub-Saharan Africa faces a "significant funding squeeze" due to tighter global financial conditions and reduced availability of concessional financing.
  - Policymakers face a balancing act among priority spending (social programs, health, education), rising public debt, and boosting domestic revenues.
- Kenya:
  - IMF aims to help establish sound macroeconomic fundamentals for sustainable and inclusive growth and job creation.
  - Program includes initiatives to improve governance and transparency and ensure responsible use of public funds.
  - IMF staff conducting a fact-finding visit to Kenya; further updates to be provided after the visit.
- Broader IMF approach:
  - Policy objectives should be subject to broad consultation to build public support.

### Argentina — EFF implementation and related matters
- Program status:
  - Since the successful conclusion of the Eight Review of the EFF, Argentine authorities have continued program implementation.
  - Data through mid-2024 suggests fiscal and reserve targets were met; implementation has resulted in a "sizable reduction in inflation" and signs of a nascent recovery in economic activity and real wages.
  - IMF Staff continue technical discussions within the current EFF program context.
- Specific issues raised:
  - Pensions: IMF emphasizes meeting fiscal targets while strengthening pension system sustainability and protecting the real value of pensions, especially for lower income retirees.
  - Litigation (YPF): IMF does not comment on ongoing legal disputes involving member countries.
  - Internal management: Western Hemisphere Director Rodrigo Valdés has delegated program negotiations to Luis Cubeddu (Deputy Director) and Ashvin Ahuja (Argentina Mission Chief), overseen by Fund management.
- Reported figures noted in questions (no IMF confirmation provided):
  - Private reports referenced a central bank loss of about $4,000 million dollars in reserves in the last quarter (questioned during briefing).

### Sri Lanka and Bangladesh — Program and missions
- Sri Lanka:
  - On June 12th, 2024 the IMF Executive Board completed the 2024 Article IV Consultation and the Second Review of the EFF, providing access of about $336 million U.S. dollars.
  - Program performance described as strong: growth reviving, inflation coming down, international reserves increasing, revenue mobilization improving; vulnerabilities remain.
  - Debt restructuring role: IMF provided an assessment of the joint working framework to Sri Lankan authorities and, at the authorities' request, shared that assessment with financial advisors of bondholders; IMF does not participate in creditor negotiations.
  - Timing of the Third Review will be discussed with the government following the September 21 presidential election.
- Bangladesh:
  - IMF expresses condolences over loss of life in recent protests; working closely with the interim government.
  - An IMF team will visit Bangladesh in late September for a fact-finding mission to discuss economic developments and potential financing needs.
  - Reported that Bangladesh has a $5 billion request out to the IMF (raised as a question in the briefing).

### IMF surcharge policy review
- Process and status:
  - A comprehensive review of the surcharge policy is underway; the last review was in 2016.
  - The Executive Board has discussed surcharges in the context of precautionary balances; the IMF met its precautionary balances target earlier this year.
  - The review will assess experience since 2016, may result in changes, and must consider implications for borrowing members and the IMF’s credit risk management framework.
  - Objective: ensure the IMF can continue to provide financing at affordable rates to members in need.
  - Engagement with the Executive Board has already started; timing and details of any policy changes to be provided later.

### Ghana — Program progress ahead of elections
- Program status:
  - On June 28th the IMF Executive Board completed the Second Review of Ghana's three-year EFF, giving Ghana access to $360 million U.S. dollars and bringing total disbursements under the program to about $1.6 billion.
  - Authorities’ reform efforts described as yielding positive results: 2023 growth higher than envisaged, inflation declining, and international reserves increasing.
  - Steadfast policy and reform implementation are noted as vital to restore macroeconomic stability and debt sustainability.
  - IMF welcomes Minister Adams signaling continued commitment to program policies.

### Nigeria, floods, and China-Africa Forum
- Nigeria:
  - Article IV Consultation concluded on May 9th.
  - Economic priorities: promote growth while bringing down inflation to address rising poverty and food insecurity.
  - Floods: recent exceptionally heavy rains caused floods; 31 million Nigerians are already affected by food insecurity.
  - IMF recommendations: rollout and broadening of the cash transfer system, including expansion to rural areas, to provide relief to affected households.
- China-Africa Forum:
  - Chinese pledge reported to invest "$50 billion plus over the next three years in Africa" was raised by questioners.
  - IMF teams will assess potential inflows and investments as part of the upcoming World Economic Outlook and the Regional Economic Outlook for Sub-Saharan Africa.

### Governance, central bank independence, and multilateral cooperation
- Central bank independence (Spain/Bank of Spain):
  - IMF position: central banks should maintain operational autonomy supported by independent analysis.
  - The Bank of Spain has been successful on these fronts; IMF looks forward to continuity under Mr. Escrivá’s tenure.
- BRICS and groupings:
  - IMF welcomes improved and expanding international cooperation and deepening trade and investment ties among groups of countries, provided they reduce fragmentation and trade and investment costs among members.
  - Decision to join such initiatives is a sovereign choice of each member country.

### Pakistan program implementation concerns and social impact
- IMF stresses:
  - Consistent implementation of the new EFF is critical to stabilize the economy and pave the way for stronger, sustainable growth and job creation.
  - The 2023 Stand-by Arrangement experience demonstrated authorities’ commitment and ownership in implementing sound policies.
  - Program aims ultimately to benefit the Pakistani people by creating jobs and opportunities.

*Transcript of IMF Press Briefing, IMF Communications Department, September 12, 2024.*

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_Source: https://www.imf.org/en/news/articles/2024/09/12/tr091224-transcript-of-imf-press-briefing_