Transcript

Transcript of IMF Press Briefing

February 27, 2020

MR. RICE: Good morning everyone. And welcome to this briefing on behalf of the International Monetary Fund. I'm Gerry Rice of the Communications Department.

As usual, this morning, our briefing will be embargoed until 10:30 a.m., that's Washington Time. I've got a few brief announcements to make here, and then we'll come to questions in the room; and questions online already building up.

Not much by way of announcements, but I can tell you that the Managing Director, Kristalina Georgieva, will be in Bogotá, Colombia, next week to participate in the Forum on Why Women's Economic Empowerment is Crucial, including to achieve the Sustainable Development Goals, at the invitation of the Colombian Government.

Of course next week we're running into International Women's Day, so we will have a number of events, including this one that I just mentioned in Colombia. And during that visit the Managing Director will also be meeting with of course, the President and Government officials, and so on, as usual. So that's March 5^th, Kristalina Georgieva in Colombia.

And the only other announcement that I have is that our Deputy Managing Director, Tao Zhang, will be in Greece at the Delphi Forum, where he will speak and also will have some meetings with Prime Minister Mitsotakis, and other authorities there in Greece. That's it on the announcements.

Earlier this morning, I just want to bring to your attention, you may have seen that the Pakistani authorities and the IMF reached a Staff-level agreement for the Second Review of the IMF-supported program there in Pakistan. Those discussions have been ongoing for a while. We've talked about it here several times.

So the agreement, of course the Staff-level agreement, as usual, subject to approval by IMF Management, and our Executive Directors, as normal. And we expect that to happen in early April. The completion of this review means that the disbursement, when approved by, and if approved by the Executive Board would be around $450 million to Pakistan.

I also want to just bring to your attention, from yesterday, just in case you missed it, it was reported by some, but again we've talked about the issue of Somalia here many, many times, and yesterday the Managing Director, Kristalina Georgieva, announced that the IMF has in fact secured sufficient financing pledges to allow the Fund to provide comprehensive debt relief to Somalia, one of the poorest countries in the world, one of the most conflict-ridden countries in the world. This is good news for Somalia.

Over 100 IMF-member countries have indeed pledged to provide somewhere around 334 million in financing, and we expect that Somalia could reach the decision, what we call the decision point for this debt relief by the end of March. So this is fast-moving and, again, good news for Somalia.

So with that, let me take some questions in the room. Delphine?

QUESTIONER: Good morning, Gerry. I have two questions related to coronavirus. So, I saw your statement last night actually. But could you elaborate a little bit about your options? Are you considering not holding the Spring Meetings, and what could be the other option as we don't what will be the impact of coronavirus here in the U.S.? You see the statement of the CDC, they expect the epidemic is coming, probably spreading in the U.S. So, what are your options?

And second question, because now it's very clear that the epidemic is outside China. Do you fear any recession for the global economy as the uncertainty is increasing quite a lot these last few days?

MR. RICE: Thank you, Delphine. Is there anything else on coronavirus? It's obviously the big news today. Yes?

QUESTIONER: Hi. Thank you so much. Just adding to that, it's particularly for the U.S. economy, do you see, with the stock market going down, this has initial slowdown for the U.S. economy this week, and will you be making any adjustments to the outlook? Thank you.

MR. RICE: Thank you. Good morning. Long time no see.

QUESTIONER: (off mic) coronavirus, that the IMF and the Managing Director had called for coordinated action, and for that, this would be an important thing. The G20 stopped short of announcing any kind of coordinated action. Can you say a bit more about what the IMF would like to see to coordinate responses, and also if there are any moves in that direction now that the situation has worsened even in these few days since the G20 Meeting? Thank you.

MR. RICE: Good. Jeff, yeah?

QUESTIONER: Thank you, Gerry. Just a quick question, if you could also maybe touch staff travel, and if there's any kind of -- what kind of restrictions or policies are happening with that, and also if that could possibly affect situations where staff is traveling to work on something with a specific country, if there's anything that might be curtailed that could have other effects later on? Thank you.

MR. RICE: Good. So, let me take those questions, and I'm seeing a lot of interest online. I think the questions you’ve asked cover. So, let me try and say a few things and respond directly to your specific questions.

Number one, I think I want to say what the IMF has been saying for some time that, first and foremost, this is a human tragedy and, you know, sympathy for those affected. First and foremost it's a health crisis, and that human aspect and response to that comes first.

We've also been stressing the uncertainty related to this virus. It's fast-moving. We are still learning. There's a lot that we don't know. We have been framing our discussion, our assessment of this in terms of scenarios, so that's to contrast with specific projections or specific forecasts, because of the uncertainty and the lack of knowledge at this point.

We are not speaking in terms of specific projections, but more in terms of different scenarios, and our planning is being shaped in that context. We are working very closely with others, it speaks a bit to the coordination point, but we are in daily contact with the World Health Organization, The World Bank, our partners in the regional development banks, and others, in addressing this issue.

And of course we've been trying to communicate as much as we can, as much as we know.

The Managing Director raised this issue very publicly at the G20 a few days ago in Riyadh, and we've been communicating, I think, just about almost every day on this issue, as much as we know, again, and we stand ready to help. Let me talk a bit more about that later.

So, on your specific questions, there was a question about the Spring Meetings, and we did issue a short statement yesterday about this. But, you know, just putting it in context, the Spring Meetings are coming up in mid-April, the middle of April. So, clearly, our main priority, again, is to ensure the health and safety of our staff, but also the Spring Meetings participants.

At the same time, we remain fully committed to sharing the Fund's policy advice, maintaining our dialogue with our membership and stakeholders, which is the objective of the Spring Meetings. So, we are looking at this, as we speak. We are considering various options. The institutions, both institutions have well developed contingency plans, and we're confident that whatever the format of the Spring Meetings would be, that we will have effective meetings -- we will have successful meetings in the sense of having that exchange of views and dialogue with our membership. I don’t have a decision on that format for you today. It's under active review, as I've just said, and I expect the decision soon and we will communicate that in a very clear and open way.

On the economic impact, again, I want to stress the uncertainty about this which is something that has been stressed by Kristalina Georgieva, Gita Gopinath and others who have spoken about it. We are likely to downgrade our growth projections for the world in the World Economic Outlook in April. Kristalina Georgieva has already said that if you saw her statement over the weekend.

I do not have another number for you today but clearly the virus is going to have an impact on growth. A lot just depends on the speed of recovery in China and in other countries. The spillover effects, the effects on supply chains and the extent to which other countries may be significantly affected. So again, I do not have a specific forecast or number on the economic impact but we will be looking at that closely.

On the question of coordinated action. You know, what we've been saying is that in the event of a more severe reaction to the virus, that synchronized action and even coordinated action by the international community would be helpful, would be effective. This is an event, this is something that really can only be tackled via international cooperation. It's not something that stops at national borders. We are already seeing that.

I think the fact that the G-20 met is in itself very helpful in terms of synchronized coordinated action. Because as those of you who were in Riyadh know, there was a lot of discussion about this and its potential impact. Both in the room and on the sidelines and the corridors and that's very important. And again, I think it's a healthy thing that we have the G-20, we have the G-7, we have the G-24. We have these other groupings that are in constant dialogue in talking about how the world may need to respond to this virus.

You know, in terms of more specifics, I think it is a combination of, you know, two elements. And again, Kristalina Georgieva has talked about this quite a bit. But one carefully targeted, carefully calibrated measures aimed at containment. And then second, macro support, again, well targeted macro support and proportionate to how we see the impact developing.

And we are already beginning to see some of that happening. We're seeing countries taking fiscal measures, taking monetary measures, in addition of course, to the health measures, which again have to come first. So, that's on the coordination.

On the, I think the last question was about the IMF's own staff travel. And there what I can tell you is that we are as always in close coordination with the authorities of our countries. And adjusting travel in line with their recommendations and how they see the situation in their countries, those specific country circumstances.

At the moment, what we call our mission travel by staff has been suspended to China, including Hong Kong and Macau. Advice from our health and safety experts here indicates that there is currently no evidence from a health-based perspective that travels should be restricted to other parts of the world. Again, at this point and again, this is fast moving.

So, we are making these decisions very much on a case by case basis. And very much with a view to the continuity of our advice. And above all, the service to our member countries.

I might just touch on the issue of, so what is the IMF role or could be the IMF role. We are, of course, providing policy advice to member countries as needed on economic measures, monetary, fiscal and so on. We are assessing the impact and we will have something much more specific to say on that as we run into the April WEO.

We have various instruments, financial instruments that could be used. We have the rapid financing instrument and rapid credit facility to support countries with balance of payment problems that arise from epidemics or natural disasters. You might recall the Ebola episode where we used some of these instruments and were able to get financing to countries very, very quickly. These are quick disbursing facilities.

We have another possible avenue is our catastrophe containment and relief trust. Which again, can provide upfront grants for immediate debt relief. So, that countries resources don’t get diverted away from dealing with the emergency, if that's the case.

And we are also able in cases to what we call augment already existing IMF programs. So, where we already have a program with a country, if it's, in addition affected by the health emergency, we can look at augmenting, adding to the resources available in the ongoing programs. And again, we're working closely with our partners in all of this. I think that responded to all the questions. But is there anything more on coronavirus?

QUESTIONER: (off mic) fiscal and monetary responses. And then, so can you say whether specific countries have come to you seeking advice in that regard? China has already taken quite a number of measures. Is it your estimation that what China has done is sufficient or is additional action required?

And then just real quickly on these relief programs that the IMF has. Have any countries already requested any disbursements or measures under those possibilities that the IMF has? I'm thinking there about countries that may be particularly, you know, surprised by these outbreaks that are now coming.

MR. RICE: Yeah, on the last question no. To my knowledge, there has been no request for IMF financing as yet. But we are and Kristalina Georgieva said in the G-20 statement that, you know, to be adequately prepared, now is the time to recognize the potential risk. Especially for fragile states, for the poorest countries which have weak healthcare systems. So, I think we should be thinking about that, but we do not have any requests as yet.

On the coordination, again, we've said that in the event that things get worse, we should be in a position of thinking about a more synchronized, a more coordinated response that would include economic measures. I think it would include health measures as well. We are not at that point yet.

On China, we are very supportive of what the Chinese government has done, the Chinese authorities. They have taken a range of measures as you mentioned on the monetary, on the fiscal side. Other countries have also already taken some action but we are very supportive of the efforts China has taken.

Okay. I'm going to leave it there then on coronavirus. Thanks very much. And I'm going to turn to I'm guessing Argentina. Please, please.

QUESTIONER: Thank you, Gerry. I would like to know if you can give me some details about the meeting between Minister Martin Guzman and the IMF officials last Monday. Thank you.

MR. RICE: Good. Rafael, do you want to?

QUESTIONER: Yes. I was hoping you could give us a date for the Article IV consultation that was agreed between Minister Guzman and Ms. Georgieva.

MR. RICE: Yeah. Thank you. So there has been some -- well, I should say continuing very active dialogue between the Argentine authorities and the IMF. This has been going on for some time now and continued in recent days.

There was a very important meeting I think between Minister Guzman and Kristalina Georgieva, the Managing Director, in Riyadh at the G-20. We issued a statement after that meeting, as did the minister. I think it was an important statement which indicated again that the active and deep state of the engagement and that would continue through an Article IV consultation in Argentina and discussing steps towards a Fund supported program in the future.

That meeting in Riyadh was followed as you mentioned by the minister and his team coming to Washington on Monday for further staff discussions. I would characterize all of this as very, very constructive and I think the discussions are going well.

And, you know, we expect that to continue in the coming days. I don’t have a lot more information on the details of the discussion on Monday nor on specifics around the timing and the modalities of the Article IV or future discussions.

Again, the authorities made clear in their statement that they're committed to discuss steps towards the Article IV and the Fund supported program but I don't have anything beyond that to -- beyond to say that we expect those discussions to continue and to be very active and consecutive. Yes, Rafael.

QUESTIONER: Yes. Just a follow up, Gerry.

MR. RICE: Sure.

QUESTIONER: So all these discussions, they're not technically negotiations since the Argentine government hasn’t formally yet requested for a new program.

MR. RICE: Correct.

QUESTIONER: And just to clarify --

MR. RICE: Correct.

QUESTIONER: -- that’s going to come after the Article IV consultation?

MR. RICE: You know, I don't have again a timing on that. You are absolutely right to say that it's not negotiations, its discussions right now. But, you know, the way they -- the way the authorities, Argentine authorities put it I think was very helpful.

They said in their statement that the Article IV consultation constitutes a valuable step to deepen the mutual understanding between the Argentine government and the IMF, with a view to discussing an eventual new program. So I think that’s helpfully contextualized by the Argentine authorities. Delphine.

QUESTIONER: I have a question about Lebanon. Lebanon is expected to decide whether they're going to pay the 1.2 billion Eurobond which is going to be in maturity on March 9 or go on default on its debt. I was wondering after your visit there if you have any indication what they are going to do.

And I have a specific question about if there go on debt default, is it possible to for them to ask financial assistance to the IMF after being on default?

MR. RICE: Yeah. Just on your last one, Delphine, I won't speculate on default, so I won't get into that. I'll try and get to your first question.

And there is another question online from Matthew Lee on Lebanon where he's asking about the comment that, by the Hezbollah's deputy leader that we will not accept submitting to tools, we don't accept submitting to the IMF to manage the crisis and did I have a comment on that. So I'll try and weave an answer to Matthew's question as well.

We issued a statement the day before yesterday, on Tuesday, about where we stand, where the IMF stands with Lebanon which is that they had requested technical assistance to help them with the economic crisis that they are facing. We did have a staff team go to Lebanon. They have now come back.

We had discussions there, technical discussions and we are ready to provide further technical advice as the government formulates its economic reform plan.

They, the Lebanese government has not requested financial assistance from the IMF, and they have only requested at this point technical assistance so that might help with Matthew's question.

On your question, Delphine, I don’t have anything specific on the Eurobond but we do believe that Lebanon needs to embark on a comprehensive macroeconomic and structural reform effort that would help it overcome the sharp deterioration and confidence, help it restore stability in the financing, in trading and in its payment systems which would help to contain inflation and resume growth.

There are long standing structural issues in many sectors of the economy that need to be addressed and so some of those issues have been the basis of our discussions with the Lebanese government and again we are, we stand ready to provide further technical advice but they have not requested financial assistance from the IMF.

QUESTIONER: The French finance minister (inaudible) Lebanon and it also is talking about the multilateral and said that he would be meeting with his counter parts specifically on Lebanon.

Given what you've said about the need for a synchronized and coordinated response on the coronavirus situation, is that your view that this Lebanon situation and the worsening crisis there also requires a multilateral type of a response? And if so, what role, you know, how would you see that developing.

And then too, on a separate note, what are the consequences less so about the IMF's relationship with Lebanon but for the region if there is in fat a default. In other words, if they do not request financial assistance and go into default, what do you anticipate would be the kind of spiraling consequences or cascading consequences for the region?

MR. RICE: Yeah. You know, I'm going to say as I said to Delphine, you know I'm not going to speculate on default. I would, we wouldn't do that for any country.

We would be hoping that Lebanon can address this, the crisis it's facing in an effective manner and that the country would be able to stabilize, recover and get on the path to growth. That's certainly what the IMF would be looking to help Lebanon to do, though again, they have not requested financial support from the IMF at this point.

And, you know, I think my sense would be that however Lebanon can be supported to get to that stage of stabilization and recovery, whatever it would take in terms of support, you know, we would -- we'd want to see that happen. But again, they have not yet requested that financial support from the Fund. They've sought our technical advice and the dialogue, that dialogue continues. Jeff.

QUESTIONER: Gerry, thank you. Just one more question on Lebanon. Is the IMF working on an updated debt sustainability analysis? Thank you.

MR. RICE: I don't have anything on that, Jeff. It was a -- this was a technical staff mission so they're probably, whether there may have been discussions and assessment of debt, there probably was not a specific debt sustainability analysis undertaken. I'm not aware of that anyway. These were what we call technical discussions at the staff level.

QUESTIONER: (off mic) are there plans for any additional meetings that you can tell us about with Lebanon?

MR. RICE: I don't have any information on additional meetings. The mission just came back earlier this week, the staff mission. And the discussions will continue, the dialogue will continue in that mode. I don’t have any information on a further mission planned at this point going back to Lebanon.

I'm going to take a couple of questions. There was Lebanon online, there was coronavirus online. There is a question about Mozambique and whether they have requested a program from the IMF that's coming from Adorito Caldera (phonetic) at Verdade (phonetic) in Mozambique.

So on Mozambique I can say yes, the IMF has received a formal request to begin program discussions with Mozambique. We will be sending a staff mission to Maputo in the second half of March to that effect.

You know, we have talked about Mozambique before. Some of the major issues are debt, a strong commitment to fiscal consolidation over the medium term, while preserving critical social and infrastructure spending will be essential for public debt sustainability.

And on governance, strengthening Mozambique's governance framework is critical to ensure that scarce public resources are put to effective use for the benefit of the lives of the Mozambique people.

So again, yes Mozambique has requested a program and discussions on that will begin soon, in the second half of March.

There is a question also on Sri Lanka. Will there be a new program with Sri Lanka after the elections, the parliamentary polls later this year? That’s coming from Panetha Amerisicaki (phonetic) at Ceylon Today in Sri Lanka.

And on Sri Lanka, the seventh and final review of the current Fund supported program is scheduled to take place after mid-April and we will be looking at this situation then and thereafter. We have a long history of engagement with Sri Lanka of course.

Maybe just a bit more information. I can say that during the recent staff visit, the authorities expressed interest in a range of options for future engagement with the Fund but the specifics of that will be discussed after this next review in mid-April.

Okay. If that's it, I'm going to leave it there today. Thank you very much for coming and we will see you in two weeks' time. Okay. Thanks very much, everybody.