Transcript of IMF Press Briefing

June 6, 2024

MS. KOZACK: Good morning, everyone, both to those of you here with us in person and those joining us online, welcome to this IMF Press Briefing. I am Julie Kozack, Director of the Communications Department. As usual, this briefing is embargoed until 11:00 a.m. Eastern Time in the U.S. I will begin with some announcements and then we will turn to your questions in person, on Webex, or via the Press Center.

Starting with management travel. On June 14th, the Managing Director will participate in the G7 Leaders' Summit in Apulia, Italy. On June 19th, the Managing Director will attend the Lujiazui Forum in Shanghai, China. And then on June 20th, the Managing Director will participate in the Eurogroup meeting in Luxembourg, where she will also hold a press conference to present the findings of the annual consultation on the euro areas economic policies. The annual consultation is equivalent to Article IV consultation. On June 24th, the Managing Director will hold a hybrid press conference on the conclusion of the 2024 U.S. Article IV Consultation.

Now, turning to travel from our Deputy Managing Directors. Deputy Managing Director Kenji Okamura is is currently in Tokyo for the 9th Tokyo Fiscal Forum and the Fiscal Policy and Sovereign Debt Conference. He will deliver remarks at both events, and they will be posted on our website. Deputy Managing Director Li Bo will be traveling from June 24th to July 5th to China, Tajikistan, and Cote d'Ivoire. On June 26th, he will speak at the World Economic Forum annual Meeting of the New Champions in Dalian, China. He will then participate in a series of discussions in China and Cote d'Ivoire on climate change and digitalization. In Tajikistan, he will participate in a constituency meeting of the IMF and World Bank's Boards of Directors.

And finally, and this is just a reminder, the latest edition of our Finance and Development magazine is out. It is a special edition marking the 60th anniversary of the publication, aptly focused on the future of the IMF. We have some copies for those of you who are here in the room. Please feel free to grab a copy on your way out.

And with that, I will now open the floor to questions. For those connecting virtually, please turn on both your camera and microphone when speaking. QUESTIONER: My question is on U.S. monetary policy. As you mentioned earlier, you published your -- you will publish U.S. Economic Assessment Report later this month, but I would like to just confirm the monetary policy outlook of the Federal Reserve. And given the recent mixed data over the U.S., could the IMF still expect that Federal Reserve cut its rate this year and could IMF stick to still the scenario of U.S. soft landing of its economy?

QUESTIONER: I just had a question related to the U.S. as well as the ECB's rate cut today. First of all, on the ECB, do you see that this might be a bit premature given that inflation pressures are still a bit sticky in Europe? And then also there is some increasing evidence that the U.S. economy is starting to slow, starting to cool a little bit. Obviously, we will get more data tomorrow with the jobs report, but I am just wondering if you're viewing the possible slowdown of the U.S. economy as a good thing for the global economy that might encourage some rate cuts and to be able to get into sync with other central banks that are cutting as well, or if it's a concern because the U.S. is really the major engine of growth in the global economy, to see that slow might not be so great?

MS. KOZACK: So, I will start with the U.S. As we have been saying for quite some time, the U.S. economy has been remarkably resilient, you know, despite important shocks and despite the sharp tightening of monetary policy that took place from 2022 to 2023. Activity in the first quarter of this year slowed, but domestic demand remained strong, and this gives us comfort that the economy is in good shape despite the first quarter's number being low.

Inflation data through the first quarter has been overall higher than we would like to see in the U.S, and it's a reminder that there are going to be bumps on the road as the U.S strives to bring inflation back to target. This also reinforces the need for the Fed to be cautious and data dependent on deciding policy in the coming months.

This policy restraint is expected to slow growth in -- U.S growth in 2024. The impact of tight monetary policy and a less expansionary fiscal policy are expected to weigh on both consumption and investment, and there are some signs of easing in labor market conditions. So, with that, just to reiterate, we do expect that the Fed should be cautious. We recommend a cautious and data dependent approach in deciding policy in the coming months. And we do expect that there does need to be some slowing of the U.S economy in 2024. And of course, all of this will be discussed in detail as part of the U.S Article IV Consultation, which is ongoing, and the Managing Director and the U.S team, of course, will cover this issue in greater detail at the press conference later this month.

Turning to ECB policy, again, like in the U.S, we have seen significant progress in reducing inflation in Europe. We assess that ECB policy is appropriate. So, as we have said in the past, we did think that it was appropriate for the ECB to begin cutting in June. But it's also important for the ECB to maintain its data dependent approach and its meeting-by-meeting approach. And as in the case of the U.S, we have seen, of course, inflation coming down, and we are also in the process of conducting the annual Consultation for the euro area. And there will be a press conference later this month, which will be an opportunity to get into more details on those issues.

QUESTIONER: My question is on Ukraine. So last week we had staff-level agreement between the Ukrainian government and the IMF, and the Fund noted the need to accelerate some reforms, which administration structural to reinforce government, strengthen the regional procedural code to create a new high administrative court and others. So, could you please elaborate on specific terms for these reforms and what steps should Ukraine implement in the first instance? And the second question, do you have any announcement on the, when the IMF board meeting on the force review for Ukraine is scheduled?

QUESTIONER: The U.S Treasury hopes Ukraine and its bondholders would reach agreements soon on a debt treatment that restored Ukraine's debt sustainability. How does the IMF assess the possibility of Ukraine to regain the ability to issue debt to private investors on international markets? What's the Fund's role in these efforts?

QUESTIONER: So, apart from the precise date of the Executive Board's decision, another question. Do you have any information on how many reviews of Ukraine's EFF are going to happen this year?

QUESTIONER: I wanted to ask you about following up on the question relating to Ukraine's debt restructuring. My colleague just mentioned the Treasury view. Wanted to ask you, in terms of the IMF Board, what does the IMF Board need to see in terms of progress on Ukraine's debt restructuring before deciding on a next review and approval of the next disbursement of Ukraine's $15.6 billion program. And what kind of progress is sufficient in terms of the debt restructuring to unlock the next disbursement?

MS. KOZACK: So, just to give the lay of the land here. On May 31st, our IMF staff and the Ukrainian authorities reached staff-level agreement for the fourth review of the four-year EFF Arrangement. This is subject to approval of the IMF's Executive Board, and subject to that approval, Ukraine would have access to a disbursement of $2.2 billion. Performance under the program has remained strong despite the challenges of the war, with all quantitative performance criteria met, one structural benchmark met, and another structural benchmark implemented with a short delay. The Ukrainian economy continued to achieve resilient growth and disinflation through the first quarter of 2024, although risks to growth are very high and they're rising. And the outlook for the remainder of the year remains highly uncertain as the war continues. With respect to the Board date, we do expect our Executive Board to consider Ukraine's review in the coming weeks.

On the question on debt. The process of discussions between Ukraine and its bondholders, or creditors, I should say, is on track. Discussions are ongoing. It is the authorities with their advisors and the bondholders concluding this external debt restructuring on terms consistent with the program will be essential to bring public debt to a sustainable level and to bring Ukraine's gross financing needs to a sustainable level.

In terms of the IMF's role in the debt restructuring. So, our role is to define targets for the treatment for the debt treatment that are consistent with the EFF program. And these would appear, of course, in the debt sustainability analysis. In a sense, what the Fund does is--we look at the macroeconomic conditions and we look at the amount of debt relief that would be needed in order to bring debt to a sustainable level. And all of this will be published in the DSA (Debt Sustainability Analysis) when we publish the Staff Report.

In terms of the question on the reforms, there are two reforms that I can speak about. One is the authorities plan to complete the external audit of NABU (the National Bank of Ukraine) and to amend the criminal procedure code in the autumn of this year. And also, there is the authorities plan to enact a law to establish a new high administrative court, and that action is planned for the end of this year.

QUESTIONER: Can you provide updates on Zimbabwe, Mozambique, Cameroon, and South Africa? And I know you cannot comment on election, but regarding South Africa, the outcome of the election, how do you see this affecting in the South African economy.

MS. KOZACK: Before I move on, any other questions on these four. Zimbabwe, Mozambique, South Africa, Cameroon.

QUESTIONER: As you will know, South Africa African National Congress has lost its majority for the first time since the advent of democracy 30 years ago, and a coalition or minority government is likely. Is there any concern at the IMF about any risks this could pose to the growth or public debt trajectories in South Africa? And, what would you be advising a new government to do to lift the growth rate and improve the public finances?

QUESTIONER: For Mozambique, in terms of the commitments that the IMF needs to see from the government, have you received the commitments that are needed on the wage bill in terms of limiting the wage bill , to conform with the budget law to allow for the conclusion of the fourth review of the program this year, or will it have to be moved to next year? And, how concerned is the IMF about delays on the LNG project and the associated revenues that Mozambique hoped to receive from the project that would help to service the external debt?

QUESTIONER: I just want to make sure that on the Cameroon question, to sort of tighten it up, there has been not tighten it up, but make sure the IMF has repeatedly expressed concern about budgetary execution but has continued to do the program. And I just wonder if you can provide any more detail in terms of what the government is doing and not doing and where that is going. And just while I have you, I do want to just have a very specific question about Pakistan and this portal about disclosing ministers' assets. It said there that the IMF is demanding that portal. And I wonder, is that true, and do you do it in other countries, including the ones that have just been asked about?

MS. KOZACK: Okay, so let's start with the four: South Africa, Cameroon, Mozambique, Zimbabwe, and then I will come back on Pakistan. So, let's start with South Africa. As everyone knows, South Africa held democratic elections last week. We do look forward to the formation of a new government to continue our constructive engagement that we have had with South Africa for many years.

In terms of our assessment of South Africa's economy, we do see an economy that continues and has continued for some time to face significant challenges. Growth declined, for example, from 1.9 percent in 2022 to 0.6 percent in 2023, as the country suffered from unprecedented electricity shortages and worsening logistical bottlenecks. In our World Economic Outlook that we released in April, we projected real GDP growth to increase only moderately to 0.9 percent this year and 1.2 percent in 2025, and we project medium-term growth at 1.4 percent. On the more positive side, headline inflation has returned to within the South African Reserve Bank's 3 percent to 6 percent target range in 2023, and that has been thanks to decisive policy tightening, which has helped bring inflation down. Of course, the outlook is subject to high uncertainty, as it is in many other countries.

In terms of policy priorities, we do see a few important policy priorities for South Africa, particularly priorities aimed at boosting growth. So, the first is to remove bottlenecks to growth through an ambitious structural reform agenda. The second is to put public debt on a sustained downward path through fiscal consolidation. And the third is to continue to carefully manage the return of inflation to target, while, of course, safeguarding financial stability. And as I noted on the third, we have seen some very welcome progress.

Now, turning to the other countries, let me go to Cameroon. On Cameroon, the IMF and the Cameroonian authorities reached staff-level agreement on the 6th reviews of Cameroon's Extended Credit Facility (ECF), and Extended Fund Facility (EFF). It is a blend. And the first review of the Resilience and Sustainability Facility. These staff-level agreements were reached on May 31st. So, very recently. Effective public financial management does remain a persistent challenge for Cameroon, with substantial extra budgetary expenditure in 2023. This translated into overruns of spending, and the target under the program on the non-oil primary fiscal deficit was missed by a small margin.

Why are we concerned about some of these spending overruns? It is because they have constrained resources for other priority spending, priority pro-growth investment. And this underlines the importance of redoubling efforts to strengthen budget integrity and execution. And finally, just to say that the authorities do intend to introduce a revised 2024 budget to limit expenditures executed through treasury advances and to adopt a clear plan to clear domestic arrears, among other measures to help improve public financial management.

On Mozambique. We recently had a mission visiting Mozambique in early May to discuss the fourth review of the ECF. Those discussions were very fruitful, and they are continuing virtually. Mozambique's economy continues to show resilience. Growth is projected at 4.3 percent in 2024. And with respect to some of the more specific country questions, there were overruns in the wage bill in 2022 and 2023. The authorities did adopt a correction to try to address these pressures, but it is going to be very important going forward that wage bill spending is rationalized, and that is going to need to underpin the fiscal consolidation that Mozambique will need. Mozambique does need to continue fiscal consolidation to both reduce financing needs and to contain debt vulnerabilities.

With respect to the LNG project, the medium-term outlook for the extractive sector in Mozambique is strong as large LNG projects are expected to resume activities. And so for that reason, we do not envisage any debt servicing issues as long as Mozambique maintains fiscal discipline.

And then finally, on Zimbabwe. Our staff is expected to conduct the Article IV Consultation mission later this month. Part of this -- the Article IV Consultation, will, of course, assess the entire economy, as we always do. But we will also be looking at the new currency arrangement, the ZIG, and this Article IV Consultation mission will give us the opportunity to do that. And just as background, Zimbabwe did introduce a new currency backed by a basket of foreign currencies and other assets, mainly gold. And we, of course, stand ready to discuss these with the authorities and to support their efforts to restore macroeconomic stability.

So let me now turn to the question on Pakistan. Firs, let me ask if anybody else has questions on Pakistan before we move in that direction. Anyone online on Pakistan? I see a question online: what is the status of Pakistan's new loan agreement?

We recently had staff visiting Pakistan. The staff was there May 13th through 23rd. We made significant progress toward reaching a staff-level agreement on a homegrown program that can be supported under a new Extended Fund Facility (EFF) with the Fund. Those discussions are continuing virtually. On your specific question, we will have to get back to you bilaterally. I do not have anything at that level of detail.

I am also seeing we have several questions coming online on Ghana. So why don't we turn to Ghana.

QUESTIONER: I want to find out is the IMF conducting a new debt sustainability analysis on Ghana, considering that the GDP growth predicted by IMF, the country's economic growth in 2023 was almost twice what the IMF projected. And if the IMF is conducting a new DSE, when will it be completed and how will it affect the country's negotiations with Eurobond holders, considering that the IMF rejected the earlier interim agreements because it fell short with its debt sustainability targets? And also, the country has received a draft MOU from its bilateral creditors. I wanted to find out when is the Board likely to sit to approve Ghana's second review.

MS. KOZACK: Okay, very good.

QUESTIONER: I also want to know, on the back of recent slippages in macroeconomy, what should be their policy priorities, especially going to the elections, for the government to ensure that there's some macroeconomic stability?

MS. KOZACK: Okay, thank you. Anyone else online on Ghana?

QUESTIONER: I just wanted to follow up on the question regarding the debt sustainability analysis (DSA) and, if the answer is that the IMF has indeed completed the new DSA, if you could tell us anything about the message of it and whether that has been communicated to the Eurobonds negotiation committee or whether that DSA is still in progress. Thank you.

MS. KOZACK: So, on April 13th, the IMFs and the Ghanaian authorities reached staff-level agreement on economic policies and reforms for the second review of the program. Our aim is to bring the review to the IMF's Executive Board for approval before the end of June. This would give Ghana access to $360 million in financing, bringing the total to about 1.6 billion in disbursements since May of 2023. The authorities’ strong policy and reform efforts under the three-year program are bearing fruit and signs of economic stabilization are emerging. For example, growth in 2023 was higher than we had initially envisaged.

The authorities are also making good progress on their comprehensive debt restructuring. The domestic debt exchange was completed last year, and in January 2024 the government reached an agreement in principle with its official bilateral creditors. Ghana is also engaging its external private creditors to seek their support.

Looking ahead, steadfast policy and reform implementation will be crucial to fully and durably restore macroeconomic stability and debt sustainability in Ghana. The government has committed to continue implementing the program as envisaged to ensure sustainable growth and support poverty reduction.

With respect to the specific questions on the debt sustainability analysis. At each review, including this one, that is in progress, the IMF does provide not only a full update of the economic situation and the macroeconomic projections, but also the debt sustainability analysis. The latest DSA will be published with the Staff Report after the Board considers the second review of the program. And of course, also just to reiterate that it is now important for the government to continue to make progress, as it has been doing with its creditors, to ultimately restore debt sustainability for the country.

QUESTIONER: Thank you once again. The question is about Russian assets, as there are less than two weeks before G7 Summit, where this hot topic is going to be discussed. I wonder if the IMF is engaged right now or was engaged previously in any discussions with G7 members on this matter. And if yes, then did you have an opportunity to transmit your position on this term, as I presume, it is still the same? Thank you.

MS. KOZACK: So, the position is indeed the same. So I think we have made our position clear and public, which is that what is important for us, for the IMF, is that any actions taken have sufficient legal underpinnings and that they do not undermine the functioning of the International Monetary System. And so that position is clear, and we have stated it in public on many occasions.

QUESTIONER: I have a couple of questions for you about the recycling of special drawing rights to multilateral development banks. Last month, the IMF approved the use of that recycling for use as hybrid capital. I had a couple of questions on this. One is, have you seen any movement on this? Have you been approached by any member countries as to, you know, how this could work? We have heard that Japan is maybe a leading contender to get this ball rolling. So, wondering if you had any news on that.

And then, if you could clarify whether the IMF is weighing in and actively encouraging countries to take advantage of this. You have created the legal framework, but are you also supportive of countries actually making this happen? Or you have a more neutral stance in asking the MDBs to basically take the lead? And then finally, we heard from the AfDB president that you have approve $20 billion in SDRs to be channeled to the AfDB. I was wondering if that figure is accurate. Thank you.

MS. KOZACK: Okay, very good. Any other questions on this topic?

QUESTIONER: I guess a follow up would be that you mentioned that the Managing Director will be at the G7 Summit next week. Whether some of this topic will be discussed during that summit with all the G7 leaders. Thank you.

MS. KOZACK: So, let’s just step back and I will try to explain a little bit what we have done on the SDR channeling. Rencently our Executive board authorized the use of SDRs for the acquisition of hybrid capital instruments issued by prescribed holders of SDRs. A prescribed holder is an official entity authorized by the IMF to hold SDRs. And these include MDBs such as the African Development Bank, the World Bank, the Inter-American Development Bank. The SDR also approved a limit of 15 billion SDRs, which is about 20 billion U.S. dollars, for the use of acquisition of hybrid capital instruments. And that is a universal limit at the moment.

Some of the MDBs that are prescribed holders. So for example, the African Development Bank and the Inter -American Development Bank have developed a proposal to issue hybrid capital instruments in exchange for SDRs. Based on the decision of our Executive board, such a use of SDRs is now permissible, but the ultimate decision rest with each member country. So, at this point, no prescribed holder has issued hybrid capital instruments under the newly authorized use of SDRs. And the IMF is not a part of the discussion between the MDBs that are prescribed holders and the countries that can potentially subscribe to those instruments.

QUESTIONER: I would like to know if Director will meet with the President Milei at G7 in Italy, and if so, if they are going to start talking about the new program for Argentina or in general about the economic situation in the country. Thank you.

MS. KOZACK: Okay, thank you. Other questions on Argentina. I do not see any hands in the room. Okay.

QUESTIONER: Good morning, Julie. I have two today. First, why does the Board take so long to evaluate the latest revision? Is there any problem getting it approved? And the second question is, what is your opinion on the political problems that the government is facing nowadays, such as parliament decision to increase pension funds? I mean because of the impact on the economy Thank you.

QUESTIONER: I was also wondering if you have a date for the Board to discuss the Argentinian staff report. And regarding also pensions, the IMF has asked, on many occasions, the government to increase spending for vulnerable sectors. What is your take on this project? And if this is the way -- and if the government has been fulfilling that request.

MS. KOZACK: I have a question on Webex. What does the IMF think about the recent increase in poverty levels in the first quarter and the firing of an official from the Ministry of Human Capital? Is corruption related to Social Security a cause for concern for the IMF?

Let me try to give you our broad view on Argentina. So, as you may recall, on May 13th, our staff reached staff-level agreement with the Argentine authorities on the eighth review of the EFF program. This review is subject to approval by the IMF's Executive Board and upon approval, Argentina would have access to about $800 million U.S. dollars in terms of the size of the disbursement. This agreement reflects the strong ownership and decisive implementation by the authorities, as all key program targets were met with wide margins. Nonetheless, the road ahead for Argentina does remain challenging, and building on these early gains means that policies will need to evolve in areas that we have already discussed.

So, the first, just to reiterate, is the need to improve the quality of fiscal consolidation to ensure its durability and fairness while protecting the most vulnerable. The second is that monetary and effects policy will need to evolve to anchor inflation and to safeguard further improvements in reserve accumulation, reserve coverage, while also containing any market pressures. And the third is that greater priority will need to be given to micro level reforms that can unlock barriers to entry, that can promote formal employment in the country, and attract private investment.

In addition, and as we have said many times in the past, it does remain critical to work to broaden political support for the macroeconomic stabilization and reform. In this regard, we welcome approval in the lower house of the key fiscal and structural legislation, and we welcome the forthcoming consideration in the Senate following clearance of the relevant Senate commissions last week. We also do continue to monitor Argentina's delicate social situation, and we've been emphasizing the need to scale up social assistance to support the poor, ensuring that the adjustment burden does not fall disproportionately on working families. We commend the authorities’ efforts to boost assistance under the flagship child allowance program, as well as to improve the governance and targeting of social programs. Careful calibration will be needed based on the evolution of social and poverty indicators.

With respect to the Board meeting, we do expect that the Board meeting will take place soon, and as is customary following the Board meeting, we will release a press release and also the Staff Report.

There were also some questions about the possibility of a new IMF program. What I can say is that we remain focused right now on the 8th review, bringing this successfully to our Board for approval. So I'm not going to speculate about a new program or new financing at this stage, but I can say that we will continue to discuss with the authorities the modalities on how to best engage and support Argentina going forward.

With respect to a potential meeting between the MD and President Milei, to the extent that such a meeting were to be scheduled, we will make that information available. I don't have anything for you on that at the moment.

And maybe now, just to answer the question on pensions, and I think you kind of alluded to it in your question because we stated it previously, we believe it's important to protect the real value of pensions, and initial actions have been taken in this regard. It's also equally important that any new initiatives to strengthen the sustainability of the pension system also preserve the fiscal targets under the program.

Okay, I see I have a question online here, which I'm going to take, because it's on a country that we don't discuss very often, which is Albania. It says, can you comment on the ongoing investigation into alleged consumer protection abuses by several distressed debt managers, which are called DDMs, in Albania, especially in light of the bank of Albania's claims that its supervisory actions have been in line with IMF advice? And this is a question from Monitor Magazine in Albania.

I think many of you know, we are not going to -- we will not comment on an ongoing legal investigation. But just to clarify on this very specific question, it is a matter of public record that reviews under the IMF supported program in 2015 and 2016 identified high levels of non-performing loans as a key vulnerability for the banking sector. And in this context, the IMF endorsed the Albanian authorities’ 2015 action plan to reduce nonperforming loans, which also provided the Bank of Albania with the mandate of licensing and supervising distressed debt managers (DDMs) given their interlinkages with the banking system. We would also add that maintaining this independence of the Bank of Albania is a key to safeguarding price and financial stability.

Okay, I see some hands up online. Let's see -- I'm having -- I can't quite read the names online, please go ahead.

QUESTIONER: Thank you, Julie, for taking my question. My question is, the IMF Executive Board is expected to take up Sri Lanka's review sometime next week. And I just wanted to know, have creditors given any influences with regard to reaching the agreements on debt restructuring through the IMF? And is the IMF expressing any concern why it's taking so long for both the bilateral creditors as well as the private creditors to reach agreements and also convert already reached principal agreements into actual MOUs.

MS. KOZACK: Thank you so much. Any other questions on Sri Lanka? QUESTIONER: Yes, thank you. Julie, I wanted to ask about the Board meeting, if the IMF setting the date for June 12th to take up the review of Sri Lanka means the authorities have reached a debt deal with the bondholders and bilateral creditors, or has the IMF separately, or is it a reflection of the IMF reducing the exact stipulations for Board approval? The prior stipulation had been that the MOU be signed with official creditors and the pact reached with bondholders. And so has there been a change based on the progress that Sri Lanka has made so far to pass the latest round of the latest review?

MS. KOZACK: Thanks.

QUESTIONER: Hi. Also, just following up on the debt restructuring question in terms of just what needs to happen there to make that go forward and, you know, the IMF's view on its support for that restructuring. Thanks.

MS. KOZACK: Okay, anyone else on Sri Lanka? Okay, so stepping back, on March 21st, IMF staff and the Sri Lankan authorities reached staff-level agreement on economic policies to conclude the second review of the program and also the 2024 Article IV Consultation. As noted, on June 12th, the Executive Board will meet to discuss the second review and the Article IV Consultation.

In Sri Lanka, we do see macroeconomic policy reform starting to bear fruit. Commendable outcomes include rapid disinflation, robust reserve accumulation, and initial signs of economic growth, while preserving stability of the financial system. Program performance is strong with most quantitative and structural conditionality for the second review met or implemented with delay, and reforms are still ongoing in some areas. The next steps on the debt restructuring are indeed to conclude negotiations with external commercial creditors and to implement agreements in principle with the official creditors. The domestic debt operations are largely completed. Debt restructuring discussions are continuing.

More specifically, the authorities have been holding extensive discussions with external official creditors regarding an MOU with the official creditor committee and the final agreements with the Export Import Bank of China. Discussions with external bondholders continue with the aim of reaching agreements in principle soon. Negotiations with the China Development bank are also at an advanced stage. There is a strong expectation that agreements with external commercial creditors consistent with program parameters will be reached soon. So overall we assess that there has been sufficiently strong progress on the debt restructuring front.

I'm now going to turn to a question online. This is from AFP. He asks, there are elections all over the world this year, in Mexico and India in particular, and the fear expressed at the Spring Meetings was that the governments would be tempted to increase public spending. Does this concern still exist?

So on this one, many of you will recall that at the Spring Meetings we released a publication called our Fiscal Monitor, which discussed this issue actually in detail, and I think this is part of what he was referring to. But stepping back, what we see from the global economy is that the global economic outlook has improved a bit, particularly relative to where we had expected it. Inflation has been declining, and we assessed in April that risks to the global outlook were balanced. All of that said, despite the resilience of the global economy, many countries are continuing to struggle with high levels of debt and high fiscal deficits. And this is happening at the same time that interest rates are high and medium-term growth prospects continue to be weak.

So our advice at the time of the Spring Meetings, and it continues to be, our advice, is that this is the time for countries to really begin fiscal consolidation, and it's important to bring fiscal positions back to their pre-pandemic levels. So countries do need decisive efforts to safeguard public finances and to rebuild fiscal buffers. This is really our key message coming out of this publication at the Spring Meetings, that now is the time for countries to rebuild fiscal buffers at a time when debt pressures are high and deficits are high. And this advice holds in an election year, but irrespective of whether there are elections this year, it is the right advice in our assessment at this time.

Okay. And with that, I am going to bring this Press Briefing to a close. I see we've already gone over by a little bit, so thank you so much for coming. It's always wonderful to see everyone. As always, this briefing is embargoed until 11:00 a.m. Eastern Time. The transcript will be available later on And of course, in case of clarifications or additional queries, please reach out to Thank you so much and have a wonderful day. And don't forget to pick up your copy of our Finance and Development Magazine.

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