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WASHINGTON, Oct 11 (Reuters) - The following are highlights from the International Monetary Fund and World Bank meetings on Saturday in Washington.
Many of the comments come from texts that were prepared for delivery to the IMF's steering committee, the International Monetary and Financial Committee, on Saturday.
"It's real infrastructure damage, it not like only an optical one ... you can imagine what kind of damage we have right now in our current account. Right now ...I just finished a meeting with Christine Lagarde ... and of course we need help, not only from the IMF, but from other international organizations."
ON DIFFICULTY OF REFORM and EFFECTS OF CONFLICT
"It's very difficult to do reforms, any reforms, when we have a real hot war, because first of all you have to consider how to finance your military expenditure which absolutely was not envisaged before in your budget - even in our minds we could not envisage before this situation would happen."
"I think Europe right now also shows their commitment to help us. Today I had a meeting with the chairman of the EBRD we discussed a very unique special program for Ukraine and this program is not any more only about how to support our balance of payments, but how to support the remains of our external debt. It's even about how to rebuild Ukraine and how to give confidence to all market participants
"In a sense, sanctions, economic sanctions, are a kind of rehearsal for (the) Fed's (monetary) tightening because at the end of the day, it is an interest rate rise... And we saw similar things happening last year with the Fed (and the taper tantrum)."
"We're definitely concerned. But on the other hand, we first of all have a fairly proper debt structure. ... We have significant reserves to support the market. We experiment with different instruments which can smooth this transition. Also, we have very low government debt, both foreign debt and domestic debt. So we have buffers to be able to smooth this kind of shock in the short-term."
"In the long-run...there may be some cost to the Russian economy; it will develop in some areas not the most efficiently."
"I cannot not mention some costs to the global financial system, because I was told that one of the large American clients had to hire 20 lawyers to process (the) payments of one - not the largest - Russian bank. So there are significant costs to the global financial system involved from these sanctions, and we have to properly understand that."
"We think that our role in the currency markets is to make the market work, to provide it support, but not to replace it."
"Some people in Russia think that we should stimulate investment with weaker monetary policy. I don't believe that this is right, because a weaker monetary policy environment can destabilize exchange rates, destabilize the money market, and it will actually have a negative effect on investment."
"We are quite comfortable (with our level of reserves). Our reserves are 60, 70 percent of our debt. ... (And) we've done quite a lot recently to move to a flexible exchange rate. I think our economy adjusted quite significantly to this flexible exchange rate."
"The biggest problem in our market is actually internal capital flight, not external capital flight. Internal capital flight, meaning people, companies converting some of their savings to foreign currency from domestic currency."
"An uneven recovery continues, despite setbacks. A number of countries face the prospect of low or slowing growth, with unemployment remaining unacceptably high... Bolstering today's actual growth and tomorrow's potential growth, while ensuring resilience and sustainability, must be our utmost priority."
"Fiscal strategies should continue to be implemented flexibly so as to support growth and job creation, while placing debt as a share of GDP on a sustainable path."
"Our key concern is to look ahead so that we avert .... the very real risk of a prolonged period of sub-par growth."
"If we don't address tomorrow's growth problems today, we will be left with today's problems tomorrow unsolved, and tomorrow's problems, if left for the future, will just get larger."
"There is ample scope for structural reforms that boost growth tomorrow but also help confidence today."
"We recognize that structural reforms have been with some exceptions too slow. We've got to pick up the pace. And there are ways of doing it which do not lead to a short-term reduction in economic growth, that do not inflict more austerity. We discussed many ways. There are ways in which we can have growth-friendly fiscal policies without a major fiscal expansion or without slippage from fiscal rules."
BANK OF THAILAND GOVERNOR PRASARN TRAIRATVORAKUL FROM IMFC STATEMENT
"The impending monetary policy normalization in the advanced economies and the consequent shifts in global liquidity will pose challenges for policymakers in emerging market economies. Nevertheless, such normalization, in so far as it is premised on economic recovery being entrenched and is well communicated, is a welcome development as it reflects the strengthening of global demand."
INDIA CENTRAL BANK GOVERNOR RAGHURAM RAJAN FROM IMFC STATEMENT
"As accommodative monetary policies are leading more to financial risks than economic risks, the pros of continuing such policies need to be carefully weighed against the cons."
"The process of exit from unconventional monetary policies needs to be predictable and well communicated, and sensitive to developments."
"If the Fed starts raising interest rates ... It could create some volatility for the emerging markets ... my hope is that after the initial volatility there will be differentiation, and the financial investors would try to see where there is some macro stability ... and I hope India comes out in (that) group."
"... (IMF) members with low growth, below-target inflation and fiscal space need to consider the pace and composition of fiscal consolidation and the appropriateness of targeted, timely and temporary fiscal support."
"WE need to push ahead with an optimal policy mix consisting of fiscal and monetary policy and structural reforms, taking into account the economic situation and policy space in each country."
SWISS FINANCE MINISTER EVELINE WIDMER-SCHLUMPF FROM IMFC STATEMENT
"Monetary and fiscal support has created essential breathing space, but will not lead to strong, sustainable, and balanced growth in and of itself. Thus, monetary and fiscal policies are not a substitute for the implementation of wide-ranging structural reforms."
ALI BABACAN, DEPUTY PRIME MINISTER FOR ECONOMIC AND FINANCIAL AFFAIRS, TURKEY
ON HOW TURMOIL ON TURKEY'S BORDERS ARE AFFECTING THE ECONOMY
"Well in terms of trade flows, the recent slowdown in the Russian and Ukrainian economies hurt our exports to a certain extent. Syria wasn't a big trade partner for us anyway."
"So there is some trade impact because of the situation in the neigbourhood. But in terms of the overall confidence in the country ... the impact is very, very limited."
"Uncertainty created by an expected normalization of U.S. monetary policy got a lot of discussion because every country is going to have to deal with this one way or another ... We talked a lot about when and how this will happen."
"We all agree ... that we need more sustained growth and that can only be achieved if we all take action on structural reforms, depending on the different situation of individual countries and continents ... and we all contribute to making sure the financial system is healthy and we all also have to make sure public finances are sustainable."
"We have a broad understanding that we're aware in Europe of our responsibility for global economy ... Some geopolitical risks have materialized , for example in Ukraine, and the German economy is more affected than the others, which should not come as a surprise.
"That makes it even more important to maintain the course and proceed with structural reforms ... But we are all of the same view that there is no reason to talk about a crisis in the global economy."
"The world is not in crisis anymore. Three years ago we were talking about whether the euro zone would survive. We were worried about whether banks could be restored to health and could function. The crisis now, that kind of crisis is over. The world is recovering."
"Countries should do what they can to support demand, to raise supply, and for the countries that have imbalances, to correct their imbalances ... I think that recommendation generally speaking was accepted by the membership. People tend to have a preference, to put a little more emphasis on the one or the other."
"At a time when most members are pursuing fiscal consolidation, we should also encourage the preparation of an ambitious program of European investment to begin supporting demand ... Unless we act rapidly, there is a danger that the current economic stagnation could become permanent."
DUTCH FINANCE MINISTER JEROEN DIJSSELBLOEM FROM IMFC STATEMENT
"Very loose monetary conditions warrant vigilance. New financial bubbles can quickly develop. Signs of excessive financial risk-taking are already emerging across many advanced and emerging economies, although less so within the Euro area."
ESSA KAZIM, GOVERNOR OF THE DUBAI INTERNATIONAL FINANCIAL CENTRE
"It's the Middle East. We've gotten used to instability."
"I think the chance of a hard landing (in China) is very low, although we worry about some downside risk like the real estate slowing down and so on. There are also growth engines, including the service sector in general, the Internet in particular ... and healthcare is rising very rapidly."
"The leverage in the real-estate sector, in the SOEs (state-owned enterprises) and among a lot of LGFVs (local government financing vehicles) ... are too high. The leveraging is actually rising in the past few years, while the non-SEO leveraging is falling. These problems require effort for rebalancing."
"At the macro level, I think we need to avoid excessive stimulus, which could increase leveraging significantly in the longer term, even though GDP growth is slowing a bit."
"I am worried about growth around the world, there are more downside risks than upside risks ... Other major economies are tilting or at least showing risks that are a little bit more to the downside than to the upside and this is obviously something we have to think about in our own policies."
"An aggregate demand problem (in the United States) is not unrelated to income distribution ... Right now the physical capital stock (of the country) is about as old as it has been in the post World War Two era ... That suggests an underinvestment."
"This is not a quick turnaround."
Compiled by Reuters' IMF/G20 team