Transcript of IMFC Press Briefing: Annual Meetings, October 2024

IMF News, October 25, 2024

Source details

Canonical URL: Transcript of IMFC Press Briefing: Annual Meetings, October 2024

Global economy has "moved closer to a soft landing." Global growth is steady and inflation continues to moderate, but progress is uneven across members.
Risks are tilted to the downside; medium‑term growth prospects remain muted; global public debt has reached a record high.
Emphasis on finding common ground to achieve the common good for all IMF members and on stepping up reform efforts to shift away from a low growth/high debt path.
Managing Director Kristalina Georgieva began a second term of five years; IMFC Chair Mohammed Aljadaan congratulated her on the second term.

IMFC welcomed completion of the review of the Poverty Reduction and Growth Trust (PRGT) to support low‑income countries addressing balance of payments challenges.
Members encouraged IMF and World Bank to further develop proposals to support countries with sustainable debt but facing liquidity challenges.
Support for strengthening the Fund's capacity development assistance and securing appropriate financing.
Welcome of the new 25th chair in the IMF's Executive Board for sub‑Saharan Africa to strengthen voice and representation of the region.
Welcome of Liechtenstein as the IMF's 191st member.
Commitment to a strong, quota‑based, and adequately resourced IMF at the center of the Global Financial Safety Net.
Work to secure domestic approvals for consent to the quota increase under the Sixteenth General Review of Quotas by mid‑November this year, as well as relevant adjustments under the New Arrangements to Borrow.

Appreciation for reforms of the Fund's lending toolkit, particularly for the PRGT.
Review of the charges and the surcharges policy intended to alleviate the financial cost of Fund lending for borrowing countries while preserving incentives and safeguarding the Fund's financial soundness.
Acknowledgement of contributions and resource mobilization:
- Special thanks to Brazil, Poland, Saudi Arabia, the UAE, and the U.S. for contributions to the PRGT.
- UAE contribution to the Resilience and Sustainability Trust.
- U.K. committed at the meeting to directly transfer its share of the GRA income distribution to the PRGT; the U.K. called for others to follow.

Strong endorsement of the Bank‑Fund three‑pillar approach to support countries with liquidity problems that could become solvency risks:
- Pillar I: reforms to boost growth and mobilize domestic revenues.
- Pillar II: adequate financing, including from international financial institutions and collective action.
- Pillar III: crowding‑in private financing at a lower cost.
Commitment to improve the Common Framework for sovereign debt relief in low‑income countries so it is implemented in a more predictable, timely, and coordinated manner.

Addition of a third Executive Director chair for sub‑Saharan Africa on the IMF Executive Board, increasing representation from 24 to 25 Executive Directors as of November 1.
Rationale: constituencies with many countries (e.g., 22–23) will have improved ability to voice diverse concerns; added Executive Director includes office support and Alternative Executive Directors from the constituency.
Efforts to increase staff diversity and set targets for sub‑Saharan African representation have exceeded targets.
Continued expansion of IMF offices and training centers to bring the Fund closer to member countries and enhance engagement.

IMF established 80 years ago at Bretton Woods (since 1944).
Global growth cited as 3.2 percent.
Historic "three firsts" agreed:
- First time in Fund history reaching precautionary balances target.
- First time ever reducing charges and surcharges that would save $1.2 billion to borrowing members, a 36 percent reduction.
- First time deploying net income to boost lending capacity for low‑income countries.

Short‑term priorities emphasized:
- Central banks to remain attentive and evidence‑based, carefully monitor data to avoid cutting too early or too late, and maintain well‑communicated monetary policy to anchor expectations.
- Fiscal attention: fiscal buffers have been exhausted while fiscal pressures remain high; emphasis on medium‑term fiscal consolidation that starts now and is not delayed.
Medium‑ and long‑term priorities:
- Lifting growth prospects via productivity‑enhancing structural reforms.
- Accelerating green and digital transformation.
- Building greater resilience to future shocks in a more shock‑prone world influenced by wars, security concerns, and competitiveness pressures.

How the IMFC assesses the global economy, main challenges and opportunities: consensus on resilience and falling inflation, but caution due to downside risks and fragmentation.
Fiscal challenges: balancing consolidation with investment to support growth.
Structural reforms: labor and product market reforms and policies to accelerate green and digital transitions.
How the IMF should respond to geopolitical and political events (example: U.S. election) — members focused on the IMF's technical role addressing global challenges regardless of domestic political cycles.
Increasing Africa's voice on the Board: answered by noting the third sub‑Saharan Africa chair, greater staff diversity, and country offices/training centers.

Source: Transcript of IMFC Press Briefing: Annual Meetings, October 25, 2024.