Transcript

Transcript of IMF Press Briefing

November 15, 2018

MR. RICE: Well, good morning everyone and welcome to this briefing on behalf of the IMF. I am Gerry Rice of the communication department and as usual this morning, this briefing will be embargoed until 10:30 a.m. and that is Washington time. Let me make a few announcements for your information and then I will turn to your questions the room and I will take some online here as well.

So our Managing Director, Christine Lagarde has been in Singapore for the ASEAN Summit and the Singapore FinTech Festival where she made a speech yesterday on the topic of central bank digital currency. On November 17, she will be in Papua New Guinea for the APEC leaders meeting, that’s the Asia Pacific Economic Cooperation meeting so that's coming up.

Next week on November -- well, on November 26 actually, Madame Lagarde will deliver the opening remarks at the high level conference on Building Resilience in Disasters and Climate Change in the Caribbean. That will be here at the IMF. And additionally, leaders from the Caribbean region will take part in a closing panel discussion moderated by our Deputy Managing Director Tao Zhang.

From November 29 to December 1, Madame Lagarde will be in Buenos Aires in Argentina to participate in the G20 Summit under the chairmanship of Argentina as you know. During her stay there she will speak at a high level investor forum on November 29 and of course take part in the G20 proceedings in Buenos Aires. And I would expect her to hold some bilateral meetings there with various officials including the Argentine authorities.

Then on December the 4th, Madame Lagarde will deliver the eighth Kissinger Lecture at the Library of Congress here in Washington and open to the press, streamed live and so on. That is going to be the evening of December 4th, the Kissinger Lecture.

What else? On November 19 to 20, we will be holding here at the Fund our sixth statistical forum on the I think interesting topic of measuring economic welfare in the digital age. David Lipton, our First Deputy Managing Director, will make remarks. Christine Lagarde will have a one-on-one discussion with Jim Baselli of the Chair of Center for International Governance and former chairman and CEO of RIM, Research in Motion, which had among its products Blackberry as you know. So that is on November 19 to 20.

And then our, finally our Deputy Managing Director Carla Grasso will conduct the high level dialogue on IMF capacity development and growth at a conference in Fiji and that will be to mark the 25th anniversary of the Pacific Financial Technical Assistance Center that’s in December. Thanks very much for your patience and let me take your questions. Good morning, Andrew.

QUESTIONER: Good morning, Gerry. Two questions for you. First of all, a question on Brexit and then a question on Venezuela. Regarding Brexit, what can you tell us about, you know, what the Fund is doing right now? I know it's a fluid situation. And also what is the Funds position on potential risk share of a, of I guess an unfortunate exit?

MR. RICE: Okay. On Brexit, as you may know, just yesterday we issued our staff report on the UK, fairly voluminous and received a lot of attention. So I don't really want to repeat everything that was said in that report yesterday and I'm going to refer people to that if they haven't had the chance to look at it. It does go into some detail on the various Brexit scenarios. It's got the full analysis. It has got some numbers and as I say it was fairly widely reported yesterday and into today.

So, you know, in terms of what I can tell you or say further today, you know, clearly as we all look at the same news this morning, the situation is developing. It is fluid. Like everyone else we would like to see progress in the negotiations. The ultimate outcome again as we have said before is clearly for the UK and the EU to determine so again we encourage both parties to continue their efforts to reach a timely agreement accompanied by an implementation period to avoid a cliff edge and to allow firms and workers sufficient time to adjust to the new relationship.

QUESTIONER: Thanks for that. And then on Venezuela, pardon me. We just moved a story saying that Venezuelan authorities, the Venezuelan central bank has agreed to hand over some macroeconomic data to the Fund, I believe at the Fund’s request and they are having discussions back and forth with Venezuela. What can you tell us about that?

MR. RICE: Let me maybe just back up a little bit for those who haven't followed it. Earlier this year the IMF executive board discussed this issue of Venezuelan data and in fact at that time issued a declaration of censure against Venezuela for its failure to implement remedial measures and its failure to comply with its obligations regarding data provision under our articles so that is a little bit of the background there.

What I can tell you in terms of an update is that there have been discussions with the Venezuelan authorities on this issue and, you know, those contacts have been ongoing even in recent days. So we were, you know, we are hopeful that will lead to a productive conclusion. I don’t have a specific, you know, read out for you on those discussions obviously and I don't have a specific date to announce for the board though we would expect that to happen in the coming weeks, for the board to meet.

You know, we have got a very clear, transparent set of guidelines and procedures regarding the data provision duties by our member countries. As I said these are laid out in our articles, they are available on our website. It is quite transparent. But I will probably leave it there because I don't want to preempt, you know, the decision, the discussion and the decision that is to come from our board but that is where we stand. Good morning.

QUESTIONER: Good morning, sir. Do you have any quotes on the state standby program for Ukraine taking into account the visit of IMF experts to Kiev last week?

MR. RICE: So yes. You're referring to the discussions concerning the staff level agreement on the new 14-month standby arrangement that was announced on October 19. So the status is that the authorities are now working on the implementation of the prior actions needed for that program to go forward, approval by our executive board. And in this regard, a small IMF team visited Kiev last week to assist with the necessary preparations in line with that staff level agreement.

At the moment, we would expect executive board consideration later this year following as I said the implementation of those prior actions relating to parliamentary approval of the 2019 budget and an increase in heating tariffs in line with the agreements that were reached.

QUESTIONER: Thank you. You mentioned budget, the state budget for 2019. Do we have any other terms and conditions for the next, for the first disbursement for Ukraine?

MR. RICE: You know, beyond what we spelled out in out statement of October 19, you know, just, you know, less than a month ago, I don’t have anything further on that. You know, it talked about building on the progress made, on the macroeconomic front, focusing on fiscal consolidation, reducing inflation, strengthening tax administration, the financial sector and the energy sector which I also mentioned. You know, I don’t have further detail on those items but again they were described in that statement of October 19. Thank you. Good morning.

QUESTIONER: Good morning, Gerry. Two questions. Last night the senate in Argentina approved the budget for next year. Do you have any comments on that? And second question, you mentioned Madame Lagarde is going to Buenos Aries. Do you know if she is going to meet President Macri?

MR. RICE: So on your second one, as I mentioned in the introductory remarks, Madame Lagarde will be in Buenos Aries for the G20 meeting and I would expect that Madame Lagarde would meet with President Macri. Since, you know, Argentina's hosting that leaders' summit. I would expect them to see each other. I don't have a date or a time for a meeting but again, I would fully expect that to happen.

And then yes, we took note of the passage of the budget by the senate. We think this is a very positive step. And, you know, the passage of the 2019 budget points to clear commitment by the Argentine authorities and a broader spectrum of Argentina's political forces to strengthen the country's economic policies. And as Managing Director Christine Lagarde recently said its passage into law is key to restoring confidence and ensuring policy continuity so again, this is a very positive step. Good morning.

QUESTIONER: Good morning. Thank you. I run late today because of the snow so apologies. I have --

MR. RICE: Understood.

QUESTIONER: Thank you for the opportunity. I have a question about Venezuela, I don’t know whether you already went through that.

MR. RICE: We just did but maybe you’ve got a different question so why don’t you try.

QUESTIONER: Okay there are press reports in Venezuela and Venezuelan media saying that the IMF had a video conference last week with the Venezuelan Central Bank. So, I would like to ask whether that is true. Who from the IMF had the video conference, what was said to the Venezuelan Central Bank and what was the answer?

MR. RICE: So, I did cover that ground earlier. But maybe just in summary, indeed there have been discussions between IMF staff and the Venezuelan authorities in regard to the provision of data issue that has been ongoing for some time. I said previously, well I confirmed those discussions. But I said previously, I don’t have the details of those discussions or the dates for you, including when the Board would meet next. But I did say that we expect the Board to meet in the coming weeks.

QUESTIONER: But is there a November 30^th deadline for Venezuela, can you confirm that, that IMF gave Venezuela a November 30 deadline?

MR. RICE: No. I won’t confirm the deadline. But I will confirm the discussions and that the Board will be meeting in due course.

QUESTIONER: And if I may do a follow up, would you please characterize how has been the engagement with Venezuela since the Board met in May. Has Venezuela given any (inaudible), provided any data or the frequency of the conversations. Can you give you us an idea of the quality or the frequency of the interaction since May?

MR. RICE: You know, I don’t have that detail. But just to say that there has been discussion, there has been dialogue on this issue and it is ongoing. We’re hopeful it can lead to a productive outcome but again, that will be something that is presented to our Executive Board in due course. They will then discuss and make the final decision.

QUESTIONER: Thank you.

MR. RICE: Thank you. Good morning.

QUESTIONER: Good morning. I’m sorry for coming back to Brexit. You mentioned the Staff Report of Great Britain and all the details in there. For all of us in need of a sound bite, perhaps just a question about how dangerous is the situation now for the Great Britain economy, for the European economy. You talked about the hard Brexit a lot in recent meetings so how dangerous is the moment now?

MR. RICE: You know again, I point to yesterday’s report and indeed to previous analysis that we’ve published including on potential spillover effects to other European countries as well as the effects for the UK itself. The situation is fluid as we see today and we’re hopeful for progress. But we’ve said consistently that a disorderly Brexit would be the biggest risk to the outlook for the UK. Let me just leave it there for right now. Good morning.

QUESTIONER: Good morning. During the recent (inaudible) group there was no objection from the European’s regarding Greece’s request to not implement the pension cards. What is your reaction and how do you comment on this development?

MR. RICE: So, I think we talked about this issue broadly a couple of weeks ago. But just to step back a bit and remind people, the IMF no longer has a financial arrangement with Greece so we are not engaged in the details of a lot of these discussions that are ongoing. They are really issues for the Greek government and for the Europeans now in the framework that has been established. I did say that a couple of weeks ago.

We continue to urge Greece to use all the tools at its disposal to achieve more growth friendly socially inclusive policies and that’s been our position now for quite some time. In the implementation of the 2019-2020 prelegislative package, if that can free up more fiscal space for more growth friendly measures, we would obviously be supportive of that. But again, this is really a decision for the Greek government and the Europeans to discuss right now. Michael.

QUESTIONER: Gerry, because there is a misunderstanding in Greece and some of my colleagues believe and write constantly that the IMF can impose policies on the Greek government, can you clarify your role since you don’t have a program.

MR. RICE: Not only in Greece, we don’t impose policies on our members. It’s their policies and we try to support them. And that’s clearly the case in Greece as well. But as I said, we don’t have a financial program with Greece now. We do have what we call a post-program monitoring arrangement whereby we visit Greece from time to time. And look at the economy in consultation with the Greek government and offer our analysis, offer our assessment with the aim to be helpful to Greece. But we don’t impose policies on member countries, we don’t impose policies in Greece and we’re in no position to do so. Because even the conditionality that is often associated with our lending programs is not the case in Greece because we don’t have a lending program.

QUESTIONER: Can you tell us when the mission is going back to Greece? I think it’s January or it’s before. If you cannot tell us now, tell us later.

MR. RICE: I don’t think I have the date in front of me, but I believe it is early next year. I think that’s right, I’ll confirm that for you later but I think that’s right.

Let me take a couple of questions online and I’ll come back in the room if there is anything. But there is a question on Mozambique. An IMF mission is currently visiting Mozambique. Can it lay the ground for resuming financial assistance and does the new prospect of agreement with the country’s lenders and bond holders change Mozambique’s outlook?

So, I can confirm yes, an IMF mission team is currently in Maputo updating the macroeconomic framework and preparing the ground work for that exercise. And they will be there over the next several weeks including working on the joint IMF/World Bank debt sustainability analysis.

On the second question, again yes, we are aware that the Mozambican authorities have announced an agreement in principle on debt restructuring with a group of their Euro bond holders. Fund staff as part of the mission that I mentioned will study the implications of the agreement for debt sustainability in the context of the next update of the debt sustainability analysis for Mozambique.

There are a couple of other questions that come from Matthew Lee at the UN. He’s asking about the status of Sri Lanka. I don’t really have much of an update on Sri Lanka beyond what I had said a couple of weeks ago which is, we’re monitoring the political developments there and we remain in contact with our technical counterparts. We do have an ongoing program with Sri Lanka and it is too early to assess what these political developments, what the implications might be for the program. It’s again, pretty much what I said a couple of weeks ago.

On Pakistan, Matthew is asking the status and that is that we have a staff team in Islamabad right now. We expect them to be there at least until next week for discussions with the authorities on a possible new program with Pakistan. They will communicate at the end of that visit. So, that should be sometime next week.

Is there anything further in the room? Andrew, you get the last question.

QUESTIONER: Yeah just to follow up on Pakistan. I think the finance minister said recently that he was expecting a program request on the order of, I think, five to six billion dollars. Do you have any information on the scope of the program at this point or timing or anything?

MR. RICE: I really don’t, Andrew, because the teams there are discussing it. But we should be able to shed light on that next week at the end of the mission. And as I said, there will be a communication so we’ll make sure that gets to you.

Okay I’m going to leave it there. Thank you very much for your attendance on this snowy morning in Washington. Thanks very much for your patience, I look forward to seeing you in a few weeks’ time.