Transcript

Transcript of IMF Press Briefing

March 7, 2024

MS. KOZACK: Good morning to both those of us here in person and those joining us online. Welcome to the IMF press briefing. I'm Julie Kozak, Director of Communications. As usual, this briefing will be embargoed until 11:00 a.m. Eastern Time. As usual, I will start with some announcements and then we will move to your questions in person, on Webex, and via the Press Center.

First, on March 11 and 12, the Managing Director, Kristalina Georgieva will travel to Bulgaria. She will meet with the country authorities in Sofia. On March 14, the Managing Director will travel to Cambridge in the UK, where she will deliver a speech at King's College discussing the legacy of John Maynard Keynes, one of the founding fathers of the IMF and the World Bank. The speech is part of the “Conversations at King's” series hosted by Gillian Tet, provost of King's College. This speech will be live streamed on imf.org.

From March 23 through 27, Managing Director Kristalina Georgieva and First Deputy Managing Director Gita Gopinath will travel to Beijing, China. During this visit, the Managing Director will give a keynote speech at the China Development Forum in Beijing on March 24. Additionally, they will engage in discussions with the authorities. On March 27, First Deputy Managing Director Gita Gopinath will deliver a video speech on the global economic outlook at the Boao forum for Asia.

Turning to other management travel. On March 13 and 14th, Deputy Managing Director Antoinette Sayeh will travel to Uruguay, where she plans to meet with authorities, the private sector, and participate in several public engagements in what marks her first visit to the country.

And from April 3 through 6, our Deputy Managing Director Kenji Okamura will be in Lao PDR for the ASEAN Finance Ministers and Central Bank Governors Meeting. On the sidelines of the ASEAN meetings, DMD Okamura will participate in a panel forum entitled, “Making The Most of Opportunities in a Changing World,” which is hosted by the bank of Lao PDR.

I am now happy to take your questions. All right, David, let's start with you.

QUESTIONER: Hi, good morning, Julie. A couple of questions. First, on Egypt, in relation to the staff agreement that was agreed yesterday, Egypt has said that, the prime minister has said that they are expecting to receive a $1.2 billion loan from the Resilience and Sustainability Facility which would supplement the additional EFF program. What is the status of those talks? Has that been agreed? Is that something that you expect to come to fruition? And also, is there any anticipation of additional loans from outside partners in the Middle East, other countries, bilateral loans that would be supplementing this package or perhaps other large investments like the big UAE property investment?

And then another question on China. Wondering if can give us an assessment of the IMF's assessment of the steps announced by the government this week to revive the economy to get growth back above 5%. And how concerned is the IMF that this will rely too much on exports that will be essentially exporting a lot of excess production capacity to the rest of the world, driving down prices for everything?

MS. KOZACK: Okay, very good. I know that there's a lot of interest in Egypt. So any other questions on Egypt? And maybe online if there's any questions on Egypt, please do go ahead and jump in. Okay, I don't see any other questions on Egypt.

So, as you know, yesterday the IMF team and the Egyptian authorities reached staff level agreement on a set of comprehensive policies and reforms needed to complete the first and second reviews under the EFF arrangement. The key policy commitments include a move to a flexible exchange rate system, a tightening of monetary and fiscal policies, a slowdown in large national infrastructure projects to reduce inflation and to preserve debt sustainability, while also fostering an environment that supports and enables private sector activity. These policies and this policy package will help preserve macroeconomic stability, restore confidence, and allow Egypt to manage the challenges associated with recent external shocks.

Amid this more challenging external environment, the authorities have requested an augmentation of the original arrangement from $3 billion to $8 billion. And just to refer you yesterday, as you may be aware, the IMF team on the ground in Cairo held a press conference with the Egyptian authorities. We've released the press release. We've also released some FAQs, and I would refer you to those for more detail.

On the question about the RSF. Just to clarify, the authorities have indeed requested an RSF, and the team and the authorities will have discussions on this request going forward. The staff level agreement that was reached yesterday was for the EFF, which is a separate instrument from the RSF. And I don't have anything else to add to that for now.

On China. So on China, the staff is in the process of assessing, of course, and the policies that the government has put forward under the, you know, under the two sessions. We certainly very much welcome the authority's focus on high quality and sustainable growth, and we will continue to review additional information provided by the authorities on the direction of policies in the coming days. Igor, a couple of questions.

QUESTIONER: First one on quotas. How many IMF members have not yet rectified quotas increase on their initial levels and not contributed and expanded their shares? I mean, what would be the reason of such reluctance then? And is Russia among these countries? And the second question, it is about IMF MD. I'm wondering if Managing Director Kristalina Georgieva are considering to stay on the second term, as her current tenor comes to the end in September?

MS. KOZACK: Okay, very good. On quotas, the period for consent, what we call consent to the 16th Quota Review Increase, has been set through November 15 of 2024. So if we step back, the agreement was concluded in December of 2023. Then there is a period of consent for the members, and that period of consent is aimed to give sufficient time to the membership to comply with their domestic procedures. Given that this deadline is still quite far, it is a bit early for members to provide their consent. What we will do is provide information periodically on the status of consents when a critical mass develops.

On the second question, this is really a question for the Managing Director herself. What I can say from the institutional perspective is that we do have a process that takes place for the selection of the Managing Director. That process is laid out on our website and I would refer you there. Yes, Yaroslav.

QUESTIONER: Thank you, Julie. I have two questions on Ukraine. The first one, could you give us an approximate date or week of when the IMF Executive board is going to meet for the review of the EFF arrangement for Ukraine? And the second question is more specific, is about corporate governance law in Ukraine, which President Zelensky signed recently. What are your expectation of implementing this law and how can this affect the development of Ukraine's state owned enterprise sector and investment climate in the country? Thank you.

MS. KOZACK: Very good. So in terms of the board date, the board consideration of the latest review is expected in the second half of March. And on the corporate governance law, the approval of what we would consider a landmark corporate governance law is a very important step towards strengthening state owned enterprises in Ukraine. The law enhances the role of supervisory boards and brings Ukrainian legislation closer to the standards of OECD countries, while respecting critical principles of public financial management to also contain fiscal risks. Robust implementation of the law will be critical to improving SOE performance and forms the basis for further reforms in this area, such as developing an SOE state ownership policy.

QUESTIONER: Hi, good morning. Thank you. I have a couple of questions on Uganda. The Central Bank on Wednesday raises its interest rate, citing depreciation. Could you tell us regarding this move, what was your reaction to this and what impact will it have on the country's economy? And if you could also provide updates on Nigeria, Senegal, and Niger.

MS. KOZACK: Okay, let me start with Uganda. So, yesterday the IMF's executive board concluded the 5th review of Uganda's ECF arrangement and that enabled the disbursement of about $120 million. The ECF program aims to help Uganda achieve more inclusive private sector led long term growth with reforms that aim to strengthen governance, enhance the monetary and financial sector frameworks, preserve debt sustainability, and increase priority social spending. Uganda has met all of the structural benchmarks and all but one of the quantitative performance criteria under the review that was just completed.

The post Covid recovery in Uganda is recovering. Inflation, importantly, has come down following a tight fiscal and monetary policy stance. With respect to monetary policy, specifically, a data dependent monetary policy stance will guard against risks while bringing core inflation back to the Central Bank's target.

And then turning to Nigeria. So on Nigeria, an IMF team recently visited Nigeria, February 12 through 23, to discuss economic developments and policies, and this was part of our regular dialogue with both the government and the Central Bank of Nigeria. The team is preparing the detailed annual report on Nigeria's economy and we also published a press release on Monday with some initial findings. Just summarizing quickly those findings, we do recognize the difficult situation that many Nigerians face. Our advice is first and foremost to help ease this suffering related to higher food, drug, and transportation prices by strengthening social protection.

With food price inflation reaching 35% year over year in January, addressing food insecurity is the immediate priority. The recently approved targeted social safety net program will provide cash transfers to vulnerable households and this is also a very important step to easing the suffering. It will need to be fully implemented before the government can address costly implicit fuel and electricity subsidies in a manner that will ensure that low income households are protected. And the decision last week by the Monetary Policy Committee to further tighten monetary policy should also help contain inflation and contain pressures on the naira.

Turning to Senegal. On December 13, 2023, the Executive Board completed the first review of a combined EFF, ECF, and RSF for Senegal. This provided the country with access to about $280 million. The authorities are implementing the structural reforms agreed under the program, including steps to strengthen revenue administration and public financial management, enhance governance, and improve the anticorruption frameworks reforms agreed under the RSF. The Resilience and Sustainability Facility are also being steadily implemented. Discussions on the second review and the Article IV consultation are expected once the electoral process is completed and the new government is in place.

And I will stop there on Senegal and I am not sure that I have something for you on Niger, Kemi. I think we will get back to you bilaterally on Niger. Thank you. I have some questions online. Rodrigo, please go ahead.

QUESTIONER: Thanks, Julie. Good morning, everyone. A couple of things. One, on Zambia, they have a self-imposed deadline for March to have a deal. It seems to be stuck, the negotiation. Do you see that happening before March? And what do you think is hampering the negotiations?

And Ethiopia, there is also a deadline for March that is set by the Paris Club. There's been various times in this press conference, we've said that there's going to be a meeting in the next weeks, but it doesn't seem to happen. So do you have a date, and do you think that this is also going to happen before the end of this month? Thank you.

MS. KOZACK: Very good. I know we often get a lot of questions on Zambia, so any other questions on Zambia? All right, go ahead.

QUESTIONER: Yes, Julie. I wanted to ask about the drought in Zambia. It's obviously hurt power generation and harvests, and whether it will impact the IMF's assessments of the country's economic growth and therefore debt sustainability. And does that change your modeling and your forecast in terms of the parameters for debt restructuring?

MS. KOZACK: Okay, very good. Anything else on Zambia? Let me see online. Not seeing anything. Okay, so let me take those two questions. I'll step back.

First, just to say that in 2023, Zambia showed significant economic resilience. GDP growth is now estimated at 4%, in 2023. An IMF team visited Lusaka from February 14 to 22 to update on recent economic developments and start assessing the impact of the drought. The review mission is tentatively scheduled for mid-April, just after our Spring Meetings, and will provide a full assessment of the adverse impact of the drought on growth and on the budget. And just to remind the approval of the second review of the IMF supported program took place in December 2023 and gave Zambia access to about $187 million.

Generally speaking, with respect to the drought, the mission, as I said, will provide a detailed assessment of the drought. The preliminary assessment is that crop losses do appear to be significant, and it also appears that there will be a need to increase imports of energy, and therefore the current account balance is expected to deteriorate. The drought will also have some fiscal implications because there will be a need, of course, to ensure that the vulnerable population of the country is supported through the shock and that may increase financing needs. So that's the preliminary assessment.

We do anticipate that that will have a short-term adverse impact on the economy. But we do not, at this point, the team does not expect that the drought will have a persistent effect over the medium term, and for that reason we expect that the impact on debt sustainability will be limited. But all of this, of course, will be confirmed and discussed in detail by the team as part of their mission.

With respect to debt. Of course, we welcome any progress on debt restructuring and we urge all creditors and the authorities to advance discussion toward restoring debt sustainability in Zambia. The debt treatment reflected in the MoU agreed between Zambia and the official creditors is consistent with the objectives and parameters of the IMF-supported program. And in line with the Fund’s Lending to Arrears Policy, Zambia is pursuing policies that are consistent with restoring macroeconomic stability and restoring growth. The authorities are also making a good faith effort to reach a restructuring agreement with external private creditors on comparable terms and consistent with program parameters.

Let's see. I have a question online on Ghana. Matthew, do you want to go ahead? Oh, I'm sorry I missed Ethiopia. Let me go to Ethiopia first, Matthew. Sorry I missed that one. And then I'll come to you.

QUESTIONER: Okay.

MS. KOZACK: So on Ethiopia. We have received a request for financial assistance to help Ethiopia address the significant challenges that the country is facing, including food insecurity, humanitarian needs, post conflict reconstruction and high inflation, and also to support the homegrown economic reform agenda which aims to fulfill Ethiopia's considerable economic potential. An October mission made good progress on how the IMF could support the authority's economic program and the set of reforms that could underpin the requested program. Discussions are ongoing. Another mission to Addis Ababa is expected to take place in the coming weeks.

Sorry, Matthew, thank you for your patience. Did you have a sort of two hander, Eric? Yes.

QUESTIONER: I just wanted to ask on Ethiopia, a follow up, which is whether there would be any impact from recent us concerns over human rights related to the government's counterinsurgency efforts? We've seen the State Department flag issues that might violate the International Financial Institutions act, which would put in doubt us support. And so, the IMF assessment of that impact in Ethiopia. Thank you.

MS. KOZACK: Okay, thanks, Eric. The recent violent incidents in Amhara and Oromia have indeed been distressing and concerning. We are closely following these developments and we note the concerns from the United States, and we hope for a peaceful resolution of this issue. Matthew, finally, thank you for your patience. Sure.

QUESTIONER: Thanks a lot. I have two questions. One is, as you said, about Ghana, there's some controversy about an anti-LGBTQ+ law pending and whether the IMF, as some have said, there is a kind of conditionality. What's its view? Is it aware of that law and what, if any, is the connection to its programs there? And then about here, I guess, about the United States, but maybe beyond, on commercial real estate. There was a talk by the IMF in the last week on the anniversary of the failure of Silicon Valley bank talking about commercial real estate exposure being a big risk. There's obviously issues around New York Community Bank here. Steve Mnuchin has invested. Joseph Otting is coming in. What can you say about how broad a risk does the IMF think this problem is and does it have any guidance? Thanks a lot.

MS. KOZACK: Great. Thank you, Matthew. I know we often get a number of questions on Ghana. So any other questions on Ghana. Eric? And then I think we have one online question on Ghana. So, Eric, go ahead.

QUESTIONER: Yeah, I wanted to ask about the advice to the government on the anti-LGBTQ bill. You've said that it clashes with internal policies, but what’s the impact that it could have on engagement and program with Ghana?

MS. KOZACK: Okay, good.

QIUESTIONER: There's another question from Ghana.

MS. KOZACK: Yes, please go ahead.

QUESTIONER: Yes, this is George Wiafe here from Joy FM in Ghana. Quick one. I want to find out whether there are any clear timelines for Ghana when it comes to reaching a deal with the external creditors and how that would impact on Ghana's program? And also, what mechanisms have you put in place to ensure that they are about $1.2 billion that you disburse to Ghana since the start of this program, the measures to ensure that they are being used for the right project or the right initiative? Thank you so much.

MS. KOZACK: Okay, very good. Anything else on Ghana? All right, let's start with Ghana. So on January 19, 2024, our Executive Board completed the first review of Ghana's IMF supported program giving the country access to an additional $600 million, and that brought total disbursements under the program so far to about $1.2 billion. The authority’s strong policy and reform efforts under the program are bearing fruit. Signs of economic stabilization are emerging. Growth in 2023 has proven to be more resilient than initially expected. Although volatile inflation has been declining rapidly, the fiscal and external positions have improved and exchange rate volatility has declined.

The authorities are making good progress on their comprehensive debt restructuring. The domestic debt exchange was completed last year. And on January 12 of this year the government reached an agreement in principle with its official bilateral creditors. Ghana is also engaging with its private external creditors to seek their support. Looking ahead, steadfast policy and reform implementation will be needed to fully and durably restore macroeconomic stability and debt sustainability in Ghana. It will be crucial for the government to continue implementing the program as envisaged to ensure sustainable growth and policy implementation.

With respect to the specific piece of legislation, our team is evaluating the potential economic and financial implications of the legislation, and we will continue to monitor the situation closely. As we have said before, like institutions, diverse and inclusive economies flourish. And finally, on the timeline, we expect that the next mission will tentatively take place in April.

And then Matthew, on your question on commercial real estate, just to step back and remind about the Fund's analysis of this issue. We have noted that higher financing costs since the beginning of the monetary policy tightening cycle have resulted in rising losses on commercial real estate loans, along with, of course, pressures in the property market for this segment. Stricter lending standards by U.S. banks have further restricted funding availability. Also, the effects of the tightening of financial conditions on commercial property prices over the past two years have been compounded by trends catalyzed by the pandemic, such as teleworking and ecommerce. Prospects for the sector do remain challenging.

Our advice is for financial supervisors to continue to remain vigilant. I can also just note that we are monitoring, of course, the situation in this sector very carefully and our team will provide a more fulsome analysis at the time of the Global Financial Stability Report. I would also draw your attention to a recent blog that we put out on this sector, which will have some more details on our overall position. Yes, please.

QUESTIONER: Question on Pakistan. Thank you.

MS. KOZACK: Good morning.

QUESTIONER: Just wanted to know what's the IMF assessment on Pakistan's external financial needs for 2024 and fiscal year and calendar year. And what would be the size of next IMF program for Pakistan and what kind of risks, political risks, IMF is assessing while dealing with Pakistan at this point in time?

MS. KOZACK: Okay, very good. Any other questions on Pakistan? Okay, I'm not seeing anything come up. So, on Pakistan, on January 11, the IMF Executive Board approved the first review of the Stand-by Arrangement with Pakistan, bringing total disbursements under the Stand-by to about $1.9 million. The SBA supported program underpins the authority’s efforts to stabilize the economy with a strong emphasis on protecting the most vulnerable segments of the population.

During the period of the caretaker government, the authorities have maintained economic stability through strict adherence to the fiscal targets while protecting the social safety net, maintaining a tight monetary policy stance to control inflation, and continuing to build foreign exchange reserves. And this has been done at the same time as implementing timely adjustments in tariffs to shore up the viability of the energy sector.

The IMF stands ready to hold a mission for the second review of the Stand-by shortly after a new cabinet is formed. The focus, therefore, is currently on completion of the current Stand-by program, which ends in April 2024. We look forward to working with the new government on policies to ensure macroeconomic stability.

QUESTIONER: Anything related to political instability?

MS. KOZACK: I'm not going to comment on politics. Only to say that the IMF stands ready, as I said, to send a mission after a new cabinet is formed, and we look forward to working with the government to ensure stability, macroeconomic stability, for the good of the people of Pakistan. Thank you. Eric?

QUESTIONER: Julie, given the travel that you announced for the Managing Director and the FDMD, I just wanted to ask if you could elaborate a little bit on the conversation with China. Bloomberg News reported last month that the U.S. Treasury and Chinese officials have been talking about the idea more of reprofiling debt and kind of rescheduling debt, rather than taking losses on debt, particularly in the emerging markets, to try to stave off potential default in the next several years. I was wondering if you could talk about the IMF's involvement in those conversations or the IMF view on whether reprofiling provides a -- and changing essentially the payment dates and delaying the payment provides a greater landing zone for an agreement at the G-20 level with China than some of the discussions that we've seen over the last year or so with working through the common framework, which has proven, everyone has said, has proven to be a slower process than some might have hoped.

MS. KOZACK: So I think where I'll go to remind everyone is that we're very engaged. The Fund is very engaged, along with the World Bank, and of course the G-20 in the Global Sovereign Debt Roundtable. So work is continuing through the Global Sovereign Debt Roundtable and of course through the common framework to address the debt challenges facing some low income countries.

A work plan to map out the next phase of work for the GSDR, that's what we call the Global Sovereign Debt Roundtable, has been developed and agreed with GSDR deputies in December of 2023. The work plan addresses the interest expressed at our Annual Meetings in Marrakech, including further work on ways to support countries confronted with climate and debt vulnerabilities, together further progress on technical issues such as dealing with non-resident holders of domestic debt in a debt restructuring context, how to treat state-owned enterprise debt, and restructuring timelines and processes. It will also cover engagement with credit rating agencies on restructuring related issues and finally to review the lessons learned from the first restructuring cases under the common framework.

There will be another meeting this month to deepen work on the restructuring processes and timelines, including issues of comparability of treatment. And the GSDR principals will meet during our Annual Meetings to review the work done and draw a work plan for the coming months, and we do expect that a progress report will be issued at that time.

Let me now go online. I know we have some questions on Argentina. I think, Liliana.

QUESTIONER: Hi, good morning. How are you?

MS. KOZAC: Very good.

QUESTIONER: The last IMF statement said, and I quote, “Given the near term stabilization costs, sustained efforts to support vulnerable segments of the population and preserve the real value of social assistance and pensions are essential”. In that sense, which measures do you think are necessary to implement as soon as possible? Thank you.

MS. KOZACK: Thank you, Liliana. Anything else? Any other questions on Argentina? I know we typically have quite a few. Okay, I have David, Eric Online. Patricia, go ahead first, and then we'll go to David and Eric.

QUESTIONER: Hi, Julie. Also, similar to what Liliana was asking, the fall in pension expenditure was terrific -- terrible, sorry, not in a positive way, 43% in the first two months. So I was wondering if there were discussions on a larger fiscal margin to prevent that from going on? And also with children support, not only in the basic programs, but there were lots of cuts on other programs directed to vulnerable populations, such as food for schools and communities. So I was wondering if there was some discussion on the fiscal margins and expenditure for those subjects?

MS. KOZACK: Thank you. Thank you, Patricia. David and Eric.

QUESTIONER: So, I just wondered if you could kind of clarify the discussions that are going on with Argentina. There's been some reporting out there suggesting that this would be a new program. It seems like the IMF is continually in negotiations with Argentina on adjustments to programs. Is there any difference here? How do you define a new program versus enhancing an old program?

MS. KOZACK: Eric?

QUESTIONER: Yes, David, read my mind. That's what we're interested in knowing about. And also, if you can confirm that this is a new program being discussed, how much more money would the IMF be looking to provide to Argentina to buffer reserves?

MS. KOZACK: Okay, very good. Anyone else on Argentina?

QUESTIONER C: Morning, Julie. Can I step up?

MS. KOZACK: Yes, of course. Go ahead.

QUESTIONER: Hi, good morning. I'm sorry, my camera is actually not working. But I was wondering that according to a Twitter post of former Economy Minister Martin Guzman, there's a mission of the Independent Evaluation Office of the IMF currently working in Buenos Aires regarding the Stand-by Agreement of 2018. Do you have any details or any comments on that mission? Thank you.

MS. KOZACK: Okay, very good. So let me just start stepping back for a moment to remind everybody of where we are with Argentina. So, the seventh review of Argentina's EFF was completed on January 31 of this year and it enabled an immediate disbursement of $4.7 billion. An ambitious stabilization plan is being implemented to correct severe policy slippages in the final quarters of 2023 and to bring the program back on track. The plan is centered on the establishment of a strong fiscal anchor, along with policies to durably bring down inflation, rebuild reserves, and tackle distortions, as well as long standing impediments to growth. Good progress is being made, but of course, the path to stabilization will be challenging and that requires steadfast policy implementation and agile policy making.

Efforts to support the most vulnerable segments of the population is a critical pillar of the program, and it's important that the burden of adjustment does not fall disproportionately on poor and working families. This involves addressing the challenges of inflation and high poverty. The strong fiscal consolidation, the elimination of monetary financing, along with improvements in monetary and FX policy frameworks are expected to bring about a gradual disinflation process, and we are seeing this work already. We are seeing some results in this area with inflation starting to decline.

And why is reducing inflation so important when it comes to protecting the most vulnerable? Because we all know that inflation is a tax on the poor. Given the very delicate social situation, along with already very high poverty rates in Argentina, it will be important to secure additional social assistance and to preserve the real value of pensions. Sustained efforts are also needed to support vulnerable segments of the population. And as I already said, it's very important for us that under the program, the burden of adjustment does not fall on the working families and the most vulnerable segments of the population.

Now, with respect to the question on a new program, as we've stated, the seventh review of the program was completed in January. Right now, our focus remains on supporting policies that aim to restore macroeconomic stability in Argentina. I just listed many of those policies while also protecting the most vulnerable. It's premature to discuss the exact precise program modalities, and I would also simply note that I would refer you to the Tweet of the Finance Minister of Argentina from last week, which clarified where we stand on a potential new program.

With respect to the question on the independent evaluation. First, the Independent Evaluation Office, which we call the IEO, conducts objective and independent evaluations on issues that are relevant to the IMF's mandate. The current work program of the IEO includes an evaluation of the IMF's Exceptional Access Policy. The evaluation is examining, specifically, the application of the policy in past Exceptional Access Programs. The 2018 Stand-by Arrangement with Argentina is one such program, but not the only program that will be examined as part of this review. So, I want to clarify that the assessment being done by the IEO is about the Exceptional Access Policy itself.

Okay, let me just see if there's anyone online who hasn't yet. Did you have a follow up question, Kemi, or new topic? Okay, so let's see if there's any online who want to come in. I think I see -- okay, so I have coming in here a question on the U.K., so I will read it out loud. It's come through the Press Center. It's a question from David Hughes of Press Association. And the question is, what is the IMF's response to the tax cuts announced by the U.K. Chancellor in his budget yesterday?

So, with respect to the Chancellor's spring budget, which was announced yesterday, what I can share is that the Managing Director had a very good call yesterday with U.K. Chancellor Hunt, during which he briefed her on the spring budget. The MD acknowledged the U.K.'s authorities’ efforts to navigate complex economic challenges through policies to support growth while stabilizing debt. IMF staff will be analyzing the announced policies in greater detail, but the aim to continue the fiscal consolidation, pursued since November 2022, to reduce inflation and stabilize debt is welcome.

The main tax cut announced this week, a further 2 percentage point reduction in the National Insurance contribution rate and the reform of the child benefit regime, are aimed at incentivizing work. These measures, together with a slight increase in public sector investment, are partly funded from well-conceived revenue raising measures.

As noted in last year's Article IV Consultation Report, significant spending to protect service delivery, growth, enhancing investments and the appropriate commitment to stabilize debt are likely to require additional revenue raising measures over the medium term. The forthcoming 2024 Article IV Consultation, which will take place in May, is an opportunity to discuss these issues and broader policies.

I have time just to take an online question which is on Ecuador. Please go ahead and come in on Ecuador.

QUESTIONER: Thank you. Good morning, this is Evelyn from Primisia (phonetic) Ecuador. I have a couple questions about Ecuador. First, I would like to know how much money Ecuador could access in this new EFF program that Ecuadorian government is looking for? And also as we know, they are looking for these new negotiations this week, these couple days. I would like to know if there are exceptional requirements that Ecuador must accomplish to access to this new program? And if you can, please confirm when are expected to begin this negotiation?

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

QUESTIONER: My question hi. Hi, Roman (phonetic) here from EFE (phonetic). My question is basically the same as my colleague, just knowing what are the requirements and reforms or assurances that the IMF is looking for?

MS. KOZACK: Okay, very good. So a few weeks ago, the Ecuadorian authorities officially requested to begin discussions on a potential new program with the IMF. Staff are actively engaging with the authorities to assess the economic situation and support the reforms to address the challenges facing the country. The recent wave of violence has come at a time of a challenging macroeconomic and fiscal outlook for Ecuador. We are closely following the developments. We hope that the security situation continues to improve for the safety and wellbeing of all of the Ecuadorian people, and in addition to efforts to enhance public safety policy, should focus on ensuring macroeconomic and fiscal sustainability. The official request, as I said, took place a few weeks ago. We are engaged with the authorities and we will provide more information as the talks progress and as we have that information available to you.

And with that, I am going to have to wrap up. We're a few minutes past time already. So as usual, this briefing is embargoed until 11:00 a.m. Eastern Time. The transcript will be available on imf.org. In the case of clarifications or additional queries, please do reach out to my colleagues at media@imf.org. Thank you all, and I look forward to seeing you again at the next press briefing, which will take place on April 4. Have a wonderful day. Thank you all.

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