## Transcript of IMF Press Briefing

_IMF News, October 3, 2024_

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## Bibliographic details
- Published: October 3, 2024

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### Announcements and schedule
- Briefing embargoed until 11:00 a.m. Eastern Time in the United States.
- Managing Director Kristalina Georgieva:
  - One-day visit to Qatar today for the annual Gulf Cooperation Council Finance Ministers and Central Bank Governors Meeting; meetings with country authorities and university students.
  - October 7th: Hamburg Sustainability Conference, Hamburg, Germany.
  - October 8th: Annual Meeting with Heads of International Organizations in Berlin, organized by Chancellor Olaf Scholz.
- Deputy Managing Director Kenji Okamura:
  - In Mongolia from October 3rd to 4th; then participating in the ASEAN Summit in Vientiane, Lao PDR on October 9th and 10th.
- Annual Meeting timing and materials:
  - Analytical chapters of World Economic Outlook, Global Financial Stability Report, and Fiscal Monitor released during the week of October 14th.
  - Annual Meetings: Monday, October 21st to Saturday, October 26th.
  - Journalists advised to register before October 7h via IMF Connect (media FAQs available).

### Russia
- Article IV Consultations with Russia have been postponed "while we are gathering all of the necessary data and analysis to ensure that a rigorous consultation and analysis can take place."
- No further updates on timing of mission.
- Executive Director nomination process for Russia (Ksenia Yudaeva referenced): nominations are made by member countries; process is underway and IMF will not comment further at this stage.

### Sri Lanka
- Background: On June 12th, 2024, IMF Executive Board completed the 2024 Article IV Consultation and the Second Review under the EFF, providing immediate access to about $336 million.
- Program assessment:
  - Program performance described as strong: reviving economic growth, lowering inflation, boosting reserves, improving revenue mobilization.
  - Important vulnerabilities and uncertainties remain; sustaining reform momentum is critical.
- Engagements:
  - High-level team led by Director of the Asia Pacific Department Krishna Srinivasan visiting Colombo to meet President Dissanayake and new economic team; discussing latest developments and reform objectives.
  - Dates for the Third Review under the EFF to be announced in due course; delegation will communicate when visit concludes.
- Debt restructuring:
  - On September 18th, Sri Lanka and international bondholder representatives reached an agreement in principle subject to confirmation of comparability of treatment by Sri Lanka's Official Creditor Committee.

### Japan
- Monetary policy:
  - Bank of Japan taking important steps toward normalization and its toolkit.
  - IMF advice: BOJ should continue to be data driven and to gradually raise the policy rate over its policy horizon if inflation forecasts support it.
  - Target: 2 percent inflation target referenced as anchor for inflation and expectations.
- Fiscal policy:
  - Recommendation: focus on growth-friendly fiscal consolidation to rebuild buffers and ensure debt sustainability, underpinned by revenue and expenditure measures.

### Middle East, Gaza, West Bank, Lebanon, Israel, Libya
- Regional monitoring:
  - IMF closely monitoring intensification of conflict; notes high uncertainty and potential for significant economic ramifications.
  - Global channels of impact so far: shipping costs and commodity prices; commodity prices remain below the highs of the past year.
- Country impacts (preliminary official estimates cited):
  - Gaza: preliminary official estimates indicate an 86 percent decline in GDP in the first half of 2024.
  - West Bank: preliminary official data indicate a 25 percent decline in GDP in the first half of 2024.
  - Lebanon: intensification exacerbates a fragile macroeconomic and social situation; physical infrastructure damaged.
  - Israel: GDP contracted by about 20 percent in Q4 2023 with only partial recovery in the first half of 2024.
- Forecasts and reporting:
  - Updated projections to be provided in October World Economic Outlook and Regional Economic Outlooks at the Annual Meeting.
- Lebanon program status:
  - Limited progress on actions agreed in the 2022 Staff-Level Agreement.
  - IMF prepared to engage on a possible financing program when decisive policy measures can be taken; current support through capacity development.
- Libya:
  - IMF welcomed agreement to end the standoff over Central Bank leadership reached last week with UNSMIL support, paving way for resumption of central bank operations and oil production/exports.
  - On July 1st, IMF’s Executive Board concluded the 2024 Article IV consultation with Libya.
  - 2023: real GDP estimated to have expanded by 10 percent (rebound from 2022 oil stoppages).
  - Medium-term challenge: diversify away from hydrocarbons and promote stronger, inclusive private sector growth.

### Staff movement and safety
- No immediate detailed update on IMF Staff relocations in the region; IMF will follow up with details.

### Egypt
- Executive Director nomination process: ongoing; IMF will not comment further.
- Program status:
  - On July 29th, IMF Executive Board completed the Third Review of Egypt's EFF, allowing draw of $820 million.
  - Inflation elevated but trending down; flexible exchange rate remains cornerstone of program.
  - Policy priorities: continued fiscal consolidation, strengthened revenue mobilization, space to finance and expand social programs, accelerate reforms to strengthen private sector growth.
- Next review:
  - Next review mission planned "in the coming months" consistent with published Staff Report schedule; plans unchanged.

### Mexico
- Article IV process underway:
  - Team scheduled to meet new authorities shortly; findings to be communicated later this month.
  - Updated outlook to be included in the World Economic Outlook.

### Caribbean: Grenada, St. Vincent and the Grenadines, Guyana
- Grenada:
  - Initial estimates suggest physical damages alone exceed 16 percent of GDP (substantial infrastructure, housing, agriculture, fisheries damage).
  - Near-term growth expected to remain positive supported by limited impact on critical tourism/infrastructure and post-disaster reconstruction beginnings.
- St. Vincent and the Grenadines:
  - Initial reports indicate substantial losses and damage in the order of 20 percent to 25 percent of GDP, mainly in the southern Grenadines.
  - Authorities drawing down buffers and receiving international assistance; growth impact in 2024 currently expected to be relatively moderate due to prompt reconstruction efforts.
- Guyana:
  - No immediate update provided; IMF to follow up bilaterally.
  - Noted structural concern: rapid growth driven by oil and gas while non-oil economy has shown limited dynamism; IMF recommendations to be provided in regional briefings.

### United States: Fed policy, port strike, transparency
- Port strike:
  - Too early to assess impact; IMF monitoring developments and hopes for prompt resolution to minimize supply-chain spillovers.
- Monetary policy:
  - Inflation declining; core PCE expected to end this year at around 2.5 percent and return to 2 percent by mid-2025.
  - Fed actions viewed as appropriate; IMF encourages data-dependent, meeting-by-meeting approach.
  - Reference to recent 50-basis point cut by the Federal Reserve last month (question context).
- Transparency and institutional dialogue:
  - IMF noted U.S. Treasury inputs and will engage membership on issues raised about transparency in emergency loans as part of ongoing Fund policy reviews and broader Bretton Woods institution discussions.

### Argentina
- Program and implementation:
  - Since the Eight Review of the EFF concluded, authorities continued program implementation: sizable reduction in inflation and fiscal deficit; signs of nascent recovery in activity and real wages.
  - Technical discussions ongoing in the context of the current EFF; IMF Staff assessing compliance with end-September targets on fiscal and reserve sides.
- Poverty and social impact:
  - Government data cited poverty rate near 53 percent; IMF recognizes delicate social situation and notes authorities have expanded well-targeted social assistance programs benefiting poor women and children.
  - Continued action to bring down inflation and encourage employment and investment expected to improve real wages and activity over time.

### Ecuador
- Program status:
  - May 2024: IMF Executive Board approved a new 48-month EFF program with access about $4 billion and an immediate disbursement of $1 billion.
  - First Review expected before the end of this year.
- RSF eligibility:
  - Ecuador is eligible for the Resilience and Sustainability Trust; authorities evaluating potential RSF arrangement.
- Climate and shock vulnerabilities:
  - Ecuador vulnerable to extreme climate events (droughts, landslides, floods, storms, El Nino, La Nina); climate coverage available in published Staff Report.
- Growth forecasts:
  - IMF to update forecasts for Ecuador at the Annual Meetings in World Economic Outlook and Regional Economic Outlook.

### El Salvador
- Engagement:
  - IMF Staff in ongoing engagement with Salvadoran authorities to reach agreement on a new IMF-supported program for macro stabilization, adjustment, and growth-enhancing reforms.
- Policy elements under discussion:
  - Addressing risks from bitcoin is a key element: IMF recommends narrowing the scope of the bitcoin law, strengthening regulatory framework and oversight of the bitcoin ecosystem, and limiting public sector exposure to bitcoin.
  - 2025 draft budget seen as a step to strengthen public finances; includes measures to contain wage bill and spending on goods and services, requiring strong implementation.

### Senegal
- Government audit:
  - IMF welcomes general audit of public finances and commitment to governance and fiscal transparency.
  - Authorities have shared audit findings with IMF Staff; team will evaluate macroeconomic impact and outline next steps in coming weeks.

### Ethiopia
- Program details:
  - IMF Board approved ECF arrangement on July 29th, 2024 supporting reforms to address macro imbalances and restore debt sustainability.
  - IMF financing about $3.4 billion; immediate disbursement about $1 billion after Board approval.
  - Program aims to fill external financing gap estimated at $10.7 billion through 2027-2028, with broadly equal burden sharing between IMF, development partners, and Common Framework debt treatment.
- First Review:
  - Recent mission produced a Staff-Level Agreement on policies for the First Review; Executive Board consideration scheduled for October 18th.

### Kenya
- Staff engagement:
  - IMF Staff visited Kenya from September 11th through 16th on a fact-finding mission; details in Press Release.
  - Discussions ongoing on the way forward.
- Governance diagnostics:
  - IMF has encouraged authorities to request a governance diagnostics; IMF has provided such diagnostics to other countries as diagnostic assistance to assess and strengthen governance and lay basis for reforms.

### Sierra Leone and Malawi
- Managing Director meetings:
  - MD met with President Bio of Sierra Leone: discussed IMF support and congratulated Sierra Leone on reaching a Staff-Level Agreement on a new 36-month ECF arrangement.
  - MD met with Malawi’s president: discussed macroeconomic policies and reforms envisaged under Malawi's ECF arrangement, strategies to boost growth, and progress on debt restructuring.
  - IMF reaffirmed commitment to support both countries’ stabilization efforts.

### Ukraine
- Fifth Review:
  - On September 10th, IMF Staff and Ukrainian authorities reached a Staff-Level Agreement on the Fifth Review; subject to Executive Board approval, access would be $1.1 billion.
  - Board consideration of the Fifth Review is expected before the Annual Meetings.
- Financing needs:
  - At the time of the Fourth Review, Ukraine's financing gap for 2025 was projected at nearly $26 billion; staff updating projections in the context of the Fifth Review.

### Citizenship by Investment (CBI) programs and Jamaica appointment
- CBI litigation:
  - IMF will not comment on ongoing litigation (RICO case referenced).
  - For country-specific fallout (e.g., St. Kitts and Nevis), IMF suggested regional briefings at the Annual Meetings will cover related issues.
- Jamaica:
  - Nigel Clarke appointed as one of IMF Deputy Managing Directors; IMF welcomes him given prior engagement with IMF Staff on Jamaica programs.

*Transcript of IMF Press Briefing — October 3, 2024. IMF Communications Department.*

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_Source: https://www.imf.org/en/news/articles/2024/10/03/tr100324-transcript-of-imf-press-briefing_