Transcript

Transcript of International Monetary and Financial Committee (IMFC) Press Briefing

October 14, 2023

Speakers:

Kristalina Georgieva, Managing Director, IMF

Nadia Calviño, IMFC Chair

Moderator:

Julie Kozack, Director of the Communications Department, IMF

Ms. KOZACK: Good afternoon, everyone. I apologize for the slight delay in beginning. But I want to welcome you here and thank you very much for joining us for our press briefing on the IMFC (International Monetary and Financial Committed).

I am delighted to have with us the Chair of the IMFC, First Vice President of the government of Spain and Minister for the Economy and Digitalization, Nadia Calviño, and the IMF Managing Director, Kristalina Georgieva. They will first share with you their key takeaways of the IMFC meeting, and then we will move to your questions. Thank you.

Nadia, over to you.

Ms. CALVIÑO: Thank you very much, Julie. Good afternoon, salam, bonjour to everyone here at the IMF World Bank Group Annual Meetings in Marrakech. Thank you very much for joining us today.

Let me start by expressing my deepest condolences to all that have lost loved ones most recently in Russia's war against Ukraine, in the conflict in Israel and Gaza, in Afghanistan, here in Morocco, with the tragic loss of life and widespread destruction caused by the recent devastating earthquakes, and to the people of Libya, for the tragic loss of life caused by flooding in September 2023.

Let me also thank, wholeheartedly, our Moroccan hosts for their tremendous work. We are very grateful to their hospitality. We are glad to be here in this welcoming environment the authorities have provided. Our members have had very productive discussions. And these meetings have underscored the importance of multilateral cooperation.

Since our last meeting, the economy has proven more resilient than expected, but the biggest source of uncertainty comes from the rising geopolitical tensions and conflicts. During the meeting, many have expressed a strong condemnation against Russia's war against Ukraine; also, against the terrorist attacks against Israel; and a strong concern about the tragic loss of lives of civilians that are being hurt in the Middle East, in the region.

In these rising geopolitical tensions and conflicts, it is more important than ever that we ensure the global economy and geoeconomics continue to be a factor of stability, providing confidence and certainty to the world.

We have tried our best to reach a communiqué. This was not possible, so I will issue, as on previous occasion as Chair's Statement. But the key takeaway from these meetings is that there is unanimity on the core issues related to the International Monetary Fund's function and mission, and that there is a very strong commitment to address our common challenges together. There is a strong push for multilateralism.

Specifically, we have agreed on our common priorities‑‑to safeguard financial stability, to reduce inflation, to ensure fiscal sustainability, while protecting the most vulnerable. Also, we have come together on the importance of boosting inclusive and sustainable growth by advancing on our climate and digital agendas. We maintain strong support for efforts to address debt vulnerabilities. We celebrated the closure of the financing gap of the Poverty Reduction and Growth Trust, to continue helping the most vulnerable members. You should have a press release, I think, from the IMF on that. And this success ensures that we can continue to reinforce concessional support to the most vulnerable members, making a difference to people's lives in those countries.

There is also agreement on a meaningful increase of quotas by the end of the year, at least maintaining the size of the Fund. And this is a key to put on track a quota‑‑a strong, quota‑based, and adequately resourced IMF that can ensure financial stability but also better support the most vulnerable countries.

We have agreed to continue to improve the voice and representation of sub‑Saharan Africa, with the creation of a 25th chair on the IMF Executive Board for sub‑Saharan Africa. And we have committed to effectively increase gender diversity at the Board.

This has been my last Annual Meetings as IMFC Chair. And I am proud to say, we have accomplished very important things during these two very turbulent years. We have created the Food Shock Window to address increasing food insecurity. We have also reinforced our toolkit to address the impact of climate change and pandemics in low‑ and middle‑income countries, through the creation of the Resilience and Sustainability Facility. I am proud to say Spain was the first country to contribute to the fund. There are 11 countries now using this facility and many more in the pipeline. So it is, I would say, on track.

We have also made good progress with debt relief, with the agreement of important lending programs to countries like Zambia, Ukraine, Sri Lanka, the creation of the Global Sovereign Debt Roundtable. Cooperation between borrowers and creditors has begun to speed up the debt restructuring process. This is encouraging; although, of course, further progress is of the essence. And this is in addition to today's very important accomplishments that I already referred to.

We are gathering in a very turbulent context. I already said it. But updating and upgrading‑‑upgrading our global financial safety net is more important than ever. And I have seen strong cooperation and a very constructive approach to be successful in this quest.

It's been a privilege to chair the IMFC. And I want to finish by wholeheartedly thanking not only the members of the IMFC, for their cooperation and support during these two years; also to wholeheartedly thank the staff of the IMF, starting with you, Managing Director, but the staff of the International Monetary Fund. This outstanding work they are doing and the way we have been able to work together is really filling me with hope, when we look at the future, and also pride, to have been able to represent my country during these turbulent times and contribute, I hope, to reinforcing multilateralism and contributing to a better world going forward.

So thank you. And over to you, Kristalina.

Ms. GEORGIEVA: Thank you very much, Nadia. I want to start by thanking Nadia for the incredible job she has done in a very complex time. You see her in this very clear way, communicating what needs to be done, with a smile and a very firm hand.

I know it is not customary to ask the press to participate. But hey, a fantastic woman doing a great job. Even the press can say "bravo" to Nadia.

(Applause)

And the reason I am so grateful to Nadia is because it is time for solidarity; but solidarity, when there is so much tension, is hard to build. And yet we have succeeded to do so.

We are finishing our meetings with the four objectives we had set up for ourselves, before the meetings, all achieved. The first objective, on foundational reforms to bring clarity and unity on policy priorities; the need to finish the fight against inflation, while safeguarding financial stability; the need to create fiscal room, while still protecting vulnerable people and paving the way for green and digital growth. And the need to transform economies faster so the slow growth we talk about here‑‑the 3 percent in the medium term‑‑can be boosted.

And as we do so comes the second priority, to make the Fund strong financially in terms of our ability to step up, should we be hit by yet another shock. And in that sense, it was very heartwarming that our membership agreed, by the end of this year, to complete the Sixteenth Quotas Review with a meaningful increase of quotas.

But that went beyond the quotas, and that was our third objective. We recognize that it is the most vulnerable countries that are at the highest risk in this very turbulent environment. Demand for Fund support from low‑income countries and vulnerable middle‑income countries is at a record high. To be able to provide meaningful support, we need more resources for our Poverty Reduction and Growth Trust, especially subsidy resources, so we can provide zero interest rate loans. And we need more support for helping countries with longer‑term financing for structural transformation through the Resilience and Sustainability Trust.

So what have we achieved? I cannot be more proud of the membership. We not only closed the gap on loans and subsidy resources, but we are actually exceeding our goal from 2021. And we are doing this in a remarkable way of unity, with now 42 countries bringing their support for our poorest members. And of those 42 countries‑‑of course, Spain is right there in the lead‑‑15 are emerging markets and developing economies. Solidarity in action from the largest, the United States, the European Commission, on behalf of the European Union, to the smallest, Trinidad and Tobago‑‑donors to the Resilience and Sustainability Trust.

Our fourth priority was hugely important, to make progress on debt resolution for countries in debt distress. We had a meeting of our Global Sovereign Debt Roundtable. And all in attendance‑‑bilateral creditors, traditional and new creditors, the private sector, the debtor countries‑‑all recognize that there is more agreement on how to go about debt restructuring today. And it is visible in the progress of Common Framework and non‑Common Framework cases that are currently under discussion. Some of them completed, like Chad, Zambia. Some of them very well advanced, like Sri Lanka and Ghana. Some of them speeding up because they need to, like Ethiopia. But that sense of constructive progress is there.

I want to finish with what warmed my heart the most‑‑uniform support for a third African Chair on our Executive Board. So from two, the voices of sub‑Saharan Africa are going to be three. And that is so important for meetings that they place on African soil.

So very good meetings. Despite all the difficulties, I can only praise our members for finding this pathway to solidarity on which hundreds of millions of people depend. Thank you.

Ms. KOZACK: Thank you very much, Kristalina.

We will now open the floor to questions. Let's go here. The gentleman in the second row at the end.

>> QUESTION: [Through interpreter]

I am from Morocco.

My question is, Ms. Nadia Calviño and Ms. Kristalina Georgieva, what are the conclusions and the lessons that were taken, as well as the decisions that were taken, in this round of meetings about the African continent?

And my question is to Ms. Kristalina Georgieva. You met yesterday with King Mohammed VI. Would you please tell us about what has been discussed? And for the second time, these meetings are held on the African continent. Thank you.

Ms. GEORGIEVA: Thank you for your questions, to your question. And my gratitude to His Majesty King Mohammed VI for granting Ajay Banga and myself the opportunity to be present at the opening of the Moroccan Parliament and be able to hear his speech, in which he announced a new social policy that is very much aligned with what we discussed in our meetings, well‑targeted social support that goes primarily to build skills and capabilities and protect vulnerable people.

In the audience, we had with the King, that was an opportunity, on behalf of all of us‑‑including those in this room‑‑to thank His Majesty for Morocco's incredible generosity, for the hospitality and warmth that the country expanded, and to express our solidarity and support for Morocco.

People lost their lives. Many have suffered tremendously. But we see the country acting in unity. And we, our presence here, is also a way for the world to say to Morocco, we stand by you.

Ms. KOZACK: Thank you very much. OK. We will go to the woman in the lavender blazer, right here.

>> QUESTION: Thank you. Maria Pachón from Agencia Efe.

I would like to ask first to Ms. Calviño for an assessment of your two years as Chair of the IMFC.

To Ms. Georgieva, I would like to ask if you have found a common position about the conflict in Israel?

And finally, how is the IMF planning to face this scenario of increasing fragmentation? And how do you think it is going to affect to the global growth? Thank you.

Ms. CALVIÑO: Well, this has been, obviously, two quite challenging years for chairing the IMFC, two years which have been marked by Russia's terrible war of aggression against Ukraine, coming out of the pandemic, challenges derived from high energy and food and raw materials prices, inflation, now rising interest rates, debt vulnerabilities.

Many during the meeting have identified war and conflict as the key, the main source of instability for the global economy right now. Many have called on Russia to stop the war of aggression against Ukraine. And this has marked these two years, obviously. But in this turbulent geopolitical context, it was more important than ever that geoeconomics was contributing stability, confidence, trust, certainty. And I think that we have achieved and we have made very good progress through the Food Shock Window; the new Resilience and Sustainability Trust; the replenishment of the Poverty Reduction and Growth Trust, which is extremely important for the lowest income, most vulnerable countries; the progress we have made with debt relief through the Sovereign Debt Roundtable. We leave on track the quota increase and the quota review by the end of the year.

So, you know, overall, the balance I think of the work of the IMFC is positive. And it is particularly remarkable that we are able to find unanimity and consensus to move ahead in this increasingly challenging geopolitical context.

Ms. GEORGIEVA: It is such a tragedy that has evolved over this last week. Innocent civilians in Israel attacked, lives lost. The necessity to now find ways to prevent that loss of civilian lives in Gaza.

I can say, the shock people have felt, it came in our meetings, as I am sure, among you, you have had the same reaction.

In terms of the impact on the global economy, it is too early yet to say. What we see, of course, is a recognition that this is yet another source of uncertainty. You have seen oil prices going up and down, markets going up and down. What will define impact, how long that goes, and how far it spreads.

And I pray with all my heart that we see an end and peace returning as quickly as possible, for the people that are affected, for the sake of the world economy.

Ms. KOZACK: Thank you very much. We will take one last question. I will take the gentleman here in the blue suit.

>> QUESTION: Monchai from TNN Thailand.

Thailand will host the Annual Meetings in 2026. What are your aspirations and expectations for Thailand? And what would you like to pass this establishment forward to [the ASEAN] community? Thank you.

Ms. GEORGIEVA: Thank you. Thank you for your question.

We are so excited that Thailand is going to be the next host of the meetings, a very hospitable country, like Morocco, with great capacity to host international meetings. So I will tell you one thing I wish not to happen, for Thailand [not] to have any disasters. We had one before Bali. We had before now. I think, enough. This is enough.

What we expect from the meetings? We now know we are in a more shock‑prone world, so building resilience, policies that can strengthen capacity to handle shocks and, at the same time, sustain progress on medium, long‑term objectives. And I very much look forward to how the meetings in Thailand will bring the voice of Asia, a very dynamic part of the world. Some of the strongest sources of growth these days are in Asia. So maybe that dynamism from Asia can penetrate to the rest of the global economy.

Ms. KOZACK: Thank you very much. I am afraid this concludes the press briefing. I want to thank you all for joining us. The transcripts will be made available later today on imf.org.

Ms. GEORGIEVA: I am very sorry. It's all my fault. I was supposed to be on a panel 10 minutes ago. My apologies. So this time, it's not Julie. It's me. My apologies.

Ms. KOZACK: We wish you a wonderful weekend.