Via IMF (Den Internationale Valutafond)

Managing Director’s Speaking Points at 2020 Spring Meetings IMFC Plenary

Opening Remarks by Kristalina Georgieva

April 16, 2020

As prepared for delivery

Thank you, Governor. Good morning.

We meet during exceptional times. And exceptional times call for exceptional action.

More than ever, we must work together to

respond to this unprecedented crisis and prepare for recovery


This is a crisis like no other. It is:

  • More complex, with interlinked shocks to our health
    and our economies that have brought our way of life to a complete stop;
  • More uncertain, as we are learning only gradually how
    to treat the novel virus, make containment most effective, and restart
    our economies; and
  • Truly global. Pandemics don’t respect borders, neither
    does the economic shock they cause.

The outlook is dire, as our flagships have shown—and I want to thank
Gita and Tobias for their excellent presentations. We expect

global economic activity to decline on a scale we have not seen
since the Great Depression

This year 170 countries will see income per capita go down – only months
ago we were projecting 160 economies to register positive per capita income

This is an

unprecedented crisis that calls for a comprehensive approach by our

Actions Taken

Thanks to your wise actions to strengthen the financial capacity of the IMF
with the New Arrangements to Borrow and the Bilateral Borrowing
Arrangements, we have $1 trillion lending capacity – 4 times more than at
the outset of the Global Financial Crisis. And like you at home, we have
taken exceptional measures.

In our surveillance, we combined

macroeconomic policy analysis with epidemiological modelling

to disentangle the path of the virus and its impact on health and economic
systems. We gave early guidance on the severity of the downturn and
incorporated additional scenario analysis to reflect the unusual

We tracked policy actions across 193 economies to develop
policy advice and share good practices aimed at slowing the outbreak,
protecting people and jobs, and safeguarding macro-financial stability.

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Recognizing the characteristics of this crisis—global, fast-moving such
that early action is far more valuable, and enormous—we sought to maximize
our ability to provide financial resources quickly, especially for
low-income members, to ease liquidity constraints and provide space for
priority outlays: above all health measures, and actions to protect
vulnerable people and avoid unnecessary insolvencies.

With invaluable support from you and from our Executive Board we

doubled annual access limits for our rapid disbursing vehicles

to cover urgent financing needs. More than 100 countries
have approached us for emergency financing, and the Board will have
considered about half of these requests by the end of the month.


the World Bank and other international financial institutions

we are working as a system to maximize the impact of our
collective action, and to make sure we support countries to use resources
in a targeted way and with good governance.

And we have rapidly revamped how we deliver capacity support in a shutdown.
Over 90 countries have already benefited from our capacity development, which has been closely integrated
with our policy advice.

We also revamped

the Catastrophe Containment and Relief Trust to help 29 of our poorest
and most vulnerable members through rapid debt service relief

. Thank you to those that have pledged contributions, and
we hope many more will soon take part.

We wholeheartedly welcome the leadership of the G20 for reaching an
agreement on

official bilateral creditors to suspend debt service obligations

will further free up resources for our poorest members.
This is an impressive achievement, done in record time, and combines the
long-acquired expertise of the Paris Club, the flexibility of emerging
creditors, and the generosity of all. We join the call for private sector creditors to participate on
comparable terms.

As staff and the Board have reminded me more than once, this is a
staggering amount of policy progress in less than two months. We could not
have strengthened our arsenal in this way without such strong support from

As one example of our efforts and collaboration, tomorrow we are co-hosting
with the World Bank a high-level “Mobilization with Africa” event – and count on many of
you to take part in it.

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Preventing a Protracted Recession

But now is the time to look ahead. In a nod to our
departing Canadian Governor Stephen Poloz, I’ll quote another great
Canadian. Wayne Gretzky: “Skate to where the puck is going, not where it
has been.” We need to think hard about where this crisis is headed and how
we can be ready to help our members, being mindful of both risks and
opportunities. Just as we responded strongly in the initial phase of the
crisis to avoid lasting scars for the global economy, we will be relentless in our efforts to avoid a protracted recession.

I am particularly concerned about emerging markets and developing
countries. They have experienced the sharpest portfolio flow reversal on record of about 100
billion dollars. Those dependent on commodities have been further shocked
by plummeting export prices. Tourism-dependent countries
are experiencing collapse of revenues, as are those
relying on remittances for income support.

Some of these countries could face temporary liquidity pressures and to
protect those with very strong policies,

the Fund yesterday established a new Short-term Liquidity Line


But, with the peak of the outbreak still ahead, many economies will require significant fiscal outlays to tackle the health
crisis and minimize bankruptcies and job losses, while facing mounting
external financing needs.

For emerging economies, we can engage through our regular facilities, including those of a precautionary nature.

This may require considerable resources if further market pressures arise.
To prevent them from spreading, we should be ready to deploy

our full lending capacity and should be ready to mobilize all layers of
the global financial safety net.

For our poorest members, we need much more concessional financing. We aim
to triple our concessional lending and are urgently

17 billion dollars in new loan resources for the Poverty Reduction and
Growth Trust.

We will also likely need at least 1.8 billion dollars in subsidy resources.
We will consider how the use of SDRs could be more

But across the membership, more lending may not always be the best
solution, as the crisis is adding to high debt burdens, and many countries
could find themselves on an unsustainable path.

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We therefore need to contemplate new approaches,

working closely with other international institutions and fora, as well
as the private sector

, to help our members steer through this crisis and come out of it more

And we, like our members, may need to venture even farther outside our
comfort zone to consider whether extraordinary measures might temporarily
help in this unprecedented crisis.

Preparing for Recovery

To help our members lay the foundations for a strong recovery, our policy
advice will need to adapt to the evolving realities. By the time of the
Annual Meetings in October, we will need to have a

better understanding of the challenges, risks and tradeoffs

facing our membership as they gradually restart their economies.

Key questions include how long to maintain the extraordinary stimulus and
unconventional policy measures, and how to unwind them, dealing with high
unemployment and ever ‘lower-for-longer’ interest rates,
preserving financial stability, and, where needed, facilitating sectoral
adjustment and private sector debt workouts.

And we must not forget about long-standing challenges that require a
collective response, such as reigniting trade as an engine
for growth,

sharing the benefits of fintech and digital transformation

which have demonstrated their usefulness during this crisis, and combating climate change where stimulus to reinforce the
recovery could advance a green economy.

Finally, in this new world, we simply cannot take social cohesion for granted. So, we will
support countries’ efforts in calibrating their social policies to

reduce inequality, protect vulnerable people, and promote access to
opportunities for all

Final Remarks

There is much uncertainty about the shape of our future.
But we can and we must embrace this crisis also as an opportunity to craft this
future together.

As we discussed at the last Annual Meetings, we have successfully worked
together through more than 75 years of transitions.

We have overcome numerous challenges and we will do so again

Thank you.

IMF Communications Department


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