1
00:00:02,400 --> 00:00:07,680
Speaker 1: Bloomberg Audio Studios, podcasts, radio News. We've got the managing

2
00:00:07,720 --> 00:00:10,240
Speaker 1: director of the International Monitoring Front, Crystalina gr Gaba, with

3
00:00:10,320 --> 00:00:14,040
Speaker 1: us here in the studio, with us in the Plaza Hotel.

4
00:00:14,080 --> 00:00:16,560
Speaker 2: Pret's welcome, great to be with you.

5
00:00:17,200 --> 00:00:20,880
Speaker 1: We're here focused very much on climate solutions, on the

6
00:00:21,000 --> 00:00:23,760
Speaker 1: challenges at the climate crisis has presented us as well.

7
00:00:23,880 --> 00:00:26,040
Speaker 1: But I want to ask you about the situation facing

8
00:00:26,079 --> 00:00:28,640
Speaker 1: the global economy. We've had the FED has cut interest rates,

9
00:00:28,640 --> 00:00:31,319
Speaker 1: It's joined the easing party that global central banks have

10
00:00:31,400 --> 00:00:34,880
Speaker 1: been taking in the past couple of months. We're about

11
00:00:34,880 --> 00:00:37,120
Speaker 1: a month away from the update of the next IMF

12
00:00:37,159 --> 00:00:40,879
Speaker 1: Global Economic Forecast. What's your reading now onto where we

13
00:00:40,920 --> 00:00:43,440
Speaker 1: are in the global economy, how much those central bank

14
00:00:43,479 --> 00:00:44,480
Speaker 1: right cuts are going to help?

15
00:00:45,080 --> 00:00:50,880
Speaker 2: Well? The global economy has been remarkably resilient, despite the

16
00:00:50,960 --> 00:00:55,080
Speaker 2: horrendous shocks of the last years, despite of interest rates

17
00:00:55,920 --> 00:01:01,360
Speaker 2: fighting inflation. For the last more than year, we have

18
00:01:01,520 --> 00:01:06,800
Speaker 2: seen global growth holding. We project three point two percent

19
00:01:06,920 --> 00:01:11,520
Speaker 2: this year three point two percent next year. The two

20
00:01:11,720 --> 00:01:19,080
Speaker 2: engines of this performance US economy and most of Emerging Asia,

21
00:01:19,240 --> 00:01:25,600
Speaker 2: especially India. Assian we are now seeing interest rates in

22
00:01:25,920 --> 00:01:33,200
Speaker 2: most economy is going down, and rightly so, because we

23
00:01:33,319 --> 00:01:38,760
Speaker 2: also see the price being paid for interest rates being high.

24
00:01:38,880 --> 00:01:46,920
Speaker 2: It is affecting somewhat prospects for growth in major economies.

25
00:01:48,080 --> 00:01:54,080
Speaker 2: Two very important points for your audience. Number One, yes,

26
00:01:54,280 --> 00:02:00,240
Speaker 2: growth is holding, but by historic standards it is not

27
00:02:01,000 --> 00:02:05,680
Speaker 2: high enough to retain good prospects for our economies before

28
00:02:05,720 --> 00:02:11,000
Speaker 2: the pandemic average growth three point eight percent. Two, we

29
00:02:11,120 --> 00:02:15,679
Speaker 2: also have very high debt levels and that combination of

30
00:02:16,400 --> 00:02:21,680
Speaker 2: slow growth and high debt is something that we at

31
00:02:21,720 --> 00:02:25,520
Speaker 2: the Fund worry about. What we want to see is

32
00:02:26,240 --> 00:02:34,200
Speaker 2: countries taking seriously the importance of fiscal prudence. So the

33
00:02:34,240 --> 00:02:37,680
Speaker 2: center banks have done their job. They fought inflation. Inflation

34
00:02:37,800 --> 00:02:41,120
Speaker 2: is going down, rates are going down. We need the

35
00:02:41,280 --> 00:02:45,520
Speaker 2: fiscal site to be equally committeed. And of course we

36
00:02:45,560 --> 00:02:48,720
Speaker 2: want to see more attention as to what drives growth.

37
00:02:49,400 --> 00:02:51,240
Speaker 3: I want to go back to inflation now with the

38
00:02:51,280 --> 00:02:54,600
Speaker 3: Fed finally making that big mood last week, that have

39
00:02:54,720 --> 00:02:59,160
Speaker 3: a point card Inflation defeated, Mission accomplished done or would

40
00:02:59,200 --> 00:03:01,720
Speaker 3: you say not necessarily yet watch it.

41
00:03:02,760 --> 00:03:04,760
Speaker 2: Yes, we are in a very good place. We have

42
00:03:04,919 --> 00:03:10,000
Speaker 2: been predicting soft lending. We would see inflation down and

43
00:03:10,120 --> 00:03:14,560
Speaker 2: growth still remaining firmly in positive territory. This is where

44
00:03:14,600 --> 00:03:19,239
Speaker 2: we are. We know that in the services inflation is

45
00:03:19,280 --> 00:03:22,200
Speaker 2: still flaring a little bit more so the FAT is

46
00:03:22,240 --> 00:03:27,560
Speaker 2: going to watch it. But broadly we think that the

47
00:03:27,639 --> 00:03:32,600
Speaker 2: FED got it right and we would see how that

48
00:03:33,360 --> 00:03:38,760
Speaker 2: evolves in the next meeting of the FAT. Not to

49
00:03:39,040 --> 00:03:44,680
Speaker 2: exclude that could be more cuts. But again, why is

50
00:03:44,720 --> 00:03:49,440
Speaker 2: the FED successful Because it is data driven, so they

51
00:03:49,480 --> 00:03:52,600
Speaker 2: would watch inman data very carefully.

52
00:03:53,800 --> 00:03:56,280
Speaker 1: I take note that you're worried about the fiscal side, though,

53
00:03:56,480 --> 00:03:58,120
Speaker 1: how big a risk is what you're hearing in the

54
00:03:58,200 --> 00:04:00,720
Speaker 1: US election campaign that's going to have a huge impact

55
00:04:00,800 --> 00:04:02,080
Speaker 1: on US RISCO policy.

56
00:04:02,320 --> 00:04:05,000
Speaker 2: Look, I mean, let's first give credit where credit is due.

57
00:04:05,200 --> 00:04:09,400
Speaker 2: The US has helped the world economy to stay afloat

58
00:04:09,560 --> 00:04:13,040
Speaker 2: in this very difficult time. So when we think about

59
00:04:13,080 --> 00:04:17,320
Speaker 2: the response to the pandemic, the response to the war

60
00:04:17,360 --> 00:04:22,000
Speaker 2: in Ukraine, these spike of energy and food prices, having

61
00:04:22,200 --> 00:04:25,880
Speaker 2: the US economy to perk in the way it did

62
00:04:26,960 --> 00:04:31,760
Speaker 2: a very good news for everybody. This being said, we

63
00:04:32,160 --> 00:04:37,839
Speaker 2: have to all think of the piece that may be

64
00:04:38,240 --> 00:04:41,640
Speaker 2: around the corner. What we learned in these last years

65
00:04:41,839 --> 00:04:44,840
Speaker 2: is that we are in a more shock front world

66
00:04:45,560 --> 00:04:52,240
Speaker 2: and having fiscal space to act should that become necessary.

67
00:04:52,800 --> 00:04:56,680
Speaker 2: Is a message we sent to all our members.

68
00:04:56,560 --> 00:05:00,359
Speaker 3: Is I remember one risk the fiscal possession of the

69
00:05:00,440 --> 00:05:02,560
Speaker 3: United States and other well, I mean.

70
00:05:02,480 --> 00:05:08,760
Speaker 2: The United States has the ability to fund itself in

71
00:05:08,800 --> 00:05:14,400
Speaker 2: a fairly comfortable manner, right, what we see in some

72
00:05:14,480 --> 00:05:20,480
Speaker 2: other countries they don't quite have that privilege. So the

73
00:05:20,520 --> 00:05:26,280
Speaker 2: pressure for imminent action, of course, differs in different places.

74
00:05:26,560 --> 00:05:30,840
Speaker 2: We do we have been saying that make sure that

75
00:05:31,400 --> 00:05:42,440
Speaker 2: you are not pushing prices up by getting more money

76
00:05:42,760 --> 00:05:46,200
Speaker 2: into the economy the economy than the economy can handle.

77
00:05:46,240 --> 00:05:46,920
Speaker 2: So be careful.

78
00:05:46,960 --> 00:05:49,799
Speaker 3: But you don't worry about the the US Federal Bank

79
00:05:49,920 --> 00:05:52,240
Speaker 3: in particular that by that half a point content there

80
00:05:52,279 --> 00:05:54,960
Speaker 3: maybe are putting a little bit more stimulus when the

81
00:05:55,000 --> 00:05:56,560
Speaker 3: economy seems to be doing well.

82
00:05:56,640 --> 00:06:01,560
Speaker 2: Right, there's growth, Yeah, the economy is doing well. Labor markets.

83
00:06:01,600 --> 00:06:04,839
Speaker 2: You actually are reporting in your program that consumers seem

84
00:06:04,880 --> 00:06:07,320
Speaker 2: to be saying, well, you're not as confident as we

85
00:06:07,320 --> 00:06:11,080
Speaker 2: were before. Let's remember that when you have interest rates

86
00:06:11,080 --> 00:06:14,719
Speaker 2: so high, that has impact, and it is the desired

87
00:06:14,800 --> 00:06:19,839
Speaker 2: impact to bring inflation down, and the accompany not so

88
00:06:20,040 --> 00:06:24,280
Speaker 2: desired to impact on consumer and business confidence. So my

89
00:06:25,800 --> 00:06:29,880
Speaker 2: message is the following. We have to all be very

90
00:06:29,920 --> 00:06:34,920
Speaker 2: watchful of whether there is risk of inflation to flare

91
00:06:35,120 --> 00:06:40,520
Speaker 2: up again. What is happening around the world. You know,

92
00:06:40,640 --> 00:06:46,080
Speaker 2: we just saw in the Middle East spike of a

93
00:06:46,200 --> 00:06:51,039
Speaker 2: war with the accompanying not big but still visible impact

94
00:06:51,040 --> 00:06:54,640
Speaker 2: on our prices. So we are not I mean, as

95
00:06:54,920 --> 00:06:58,800
Speaker 2: the movie would go, we are not encances anymore. We're

96
00:06:58,839 --> 00:07:05,120
Speaker 2: in a different world, more shockpron more unpredictable. Keep your

97
00:07:05,279 --> 00:07:08,839
Speaker 2: powder dry, don't use all of it at once.

98
00:07:09,520 --> 00:07:12,120
Speaker 1: One of the shocks that did upend the global economy

99
00:07:12,200 --> 00:07:14,720
Speaker 1: is Russia's war in Ukraine, and the Fund was criticized

100
00:07:14,760 --> 00:07:19,480
Speaker 1: recently for planning to restart annual economic consultations with Russia.

101
00:07:19,920 --> 00:07:20,880
Speaker 1: Whose idea was that.

102
00:07:21,160 --> 00:07:24,400
Speaker 2: Look, I mean, we do have an articles of agreement

103
00:07:24,640 --> 00:07:27,480
Speaker 2: and they say you have to have regular consultations. The

104
00:07:27,560 --> 00:07:30,600
Speaker 2: Russian case is a very complex case. This is not

105
00:07:30,880 --> 00:07:35,600
Speaker 2: your normal article for so as you know, we have

106
00:07:37,200 --> 00:07:40,320
Speaker 2: said we need to see whether we have all the data,

107
00:07:40,400 --> 00:07:43,320
Speaker 2: we need to see whether we are ready, and at

108
00:07:43,320 --> 00:07:44,720
Speaker 2: this moment we are not.

109
00:07:45,040 --> 00:07:48,440
Speaker 1: What does that damage the Fund's reputation having that sort

110
00:07:48,480 --> 00:07:50,760
Speaker 1: of confusion around starting and then stopping.

111
00:07:52,120 --> 00:07:56,320
Speaker 2: I think that the Fund has been incredibly strong over

112
00:07:56,360 --> 00:08:00,280
Speaker 2: this period of time of shock upon shock upon shock.

113
00:08:01,160 --> 00:08:07,160
Speaker 2: We have supplied liquidity to countries that need it. We

114
00:08:07,360 --> 00:08:10,760
Speaker 2: boosted reserves for countries so they can go through these shocks.

115
00:08:10,760 --> 00:08:14,080
Speaker 2: And I think our reputation speaks for itself by the

116
00:08:14,160 --> 00:08:18,480
Speaker 2: fact that our membership is increasing. We just got our

117
00:08:18,480 --> 00:08:23,160
Speaker 2: one hundred ninety first member, the tiny country of Liechtenstein

118
00:08:23,880 --> 00:08:28,040
Speaker 2: joining us. Why because we are an anchor in a

119
00:08:28,120 --> 00:08:33,400
Speaker 2: sea of trouble. So I would argue that when you

120
00:08:33,440 --> 00:08:36,880
Speaker 2: look at the Fund, you have a credible institution. We

121
00:08:37,000 --> 00:08:40,760
Speaker 2: have come true. We help the world economy to steer

122
00:08:40,840 --> 00:08:44,160
Speaker 2: through very difficult times. We will continue to do that.

123
00:08:44,600 --> 00:08:48,760
Speaker 3: But is it tricky considering the war and in terms

124
00:08:48,760 --> 00:08:51,840
Speaker 3: of advising Russia, like how to survive through this when

125
00:08:52,120 --> 00:08:53,679
Speaker 3: most of the developed world, as you.

126
00:08:53,679 --> 00:08:58,199
Speaker 2: Know, of course, cities as a horrible war. My heart

127
00:08:58,480 --> 00:09:03,360
Speaker 2: bleeds for the people in Ukraine that have been so

128
00:09:04,000 --> 00:09:10,439
Speaker 2: harshly hit by Russia's war. I want to see the

129
00:09:10,480 --> 00:09:15,000
Speaker 2: war ending for the sake of Ukraine and for the

130
00:09:15,040 --> 00:09:18,720
Speaker 2: sake of the global economy. It was incredibly damaging to

131
00:09:18,840 --> 00:09:23,120
Speaker 2: the whole world. When we think of this is it

132
00:09:23,720 --> 00:09:29,360
Speaker 2: is it possible to do Article four without enhancing Russia's capabilities?

133
00:09:30,080 --> 00:09:33,200
Speaker 2: We have to sit back and think twice. And this

134
00:09:33,360 --> 00:09:35,440
Speaker 2: is what you're doing right now?

135
00:09:35,800 --> 00:09:37,120
Speaker 1: How long will you wait before that is?

136
00:09:37,440 --> 00:09:39,520
Speaker 2: And why are some of our members, I mean, this

137
00:09:39,559 --> 00:09:41,720
Speaker 2: is our the levels. Some of our members are saying,

138
00:09:41,760 --> 00:09:45,280
Speaker 2: please if you're you're the only institution no treasure. Other

139
00:09:45,360 --> 00:09:48,559
Speaker 2: members they're saying, you're the only institution that can come

140
00:09:48,640 --> 00:09:52,240
Speaker 2: up with some credible assessment what is happening in Russia.

141
00:09:53,040 --> 00:09:56,040
Speaker 2: So that is also something that is in the equation.

142
00:09:56,320 --> 00:10:01,280
Speaker 2: But I'm telling you this is not an venture we

143
00:10:01,360 --> 00:10:07,760
Speaker 2: would take ever lightly. And I care very deeply for

144
00:10:07,840 --> 00:10:11,880
Speaker 2: the trust of my membership. We need to be there

145
00:10:12,320 --> 00:10:17,360
Speaker 2: as an institution that holds strong in a world that

146
00:10:17,440 --> 00:10:18,880
Speaker 2: has more trouble.

147
00:10:19,920 --> 00:10:22,240
Speaker 3: I want to ask you about Argentina because you guys

148
00:10:22,240 --> 00:10:25,080
Speaker 3: have put in there are some complaints by the Argentinian

149
00:10:25,120 --> 00:10:29,439
Speaker 3: president about the IMAF negotiator. You put in a new negotiator,

150
00:10:29,480 --> 00:10:31,520
Speaker 3: and we do wonder about, like what does that signal

151
00:10:31,840 --> 00:10:35,680
Speaker 3: to other countries when they're maybe not happy with negotiations

152
00:10:35,720 --> 00:10:36,960
Speaker 3: or policies.

153
00:10:36,480 --> 00:10:40,840
Speaker 2: Or the IMASS So the answer is very simple. It

154
00:10:40,920 --> 00:10:49,280
Speaker 2: is the negotiator himself who found the situation being propagated. Yeah,

155
00:10:49,360 --> 00:10:52,280
Speaker 2: how do you negotiate with somebody who does not trust

156
00:10:52,360 --> 00:10:57,280
Speaker 2: you at all? So it was that negotiator that looked

157
00:10:57,320 --> 00:11:00,480
Speaker 2: into the situation in Argentina. That's Argenta in a needs

158
00:11:01,160 --> 00:11:04,600
Speaker 2: help from the fund? Yes, do they need our advice? Yes,

159
00:11:05,160 --> 00:11:09,360
Speaker 2: well let me send somebody who the president would listen to.

160
00:11:10,200 --> 00:11:13,800
Speaker 2: And I can tell you that that was a mature judgment.

161
00:11:13,880 --> 00:11:18,920
Speaker 2: And I stand by this judgment of my staffer, great professional,

162
00:11:19,400 --> 00:11:25,760
Speaker 2: great professional, Rodrigo Valdez. I admire him for the maturity

163
00:11:25,920 --> 00:11:27,679
Speaker 2: it has shown in that environment.

164
00:11:29,120 --> 00:11:32,079
Speaker 1: And are you hopeful for improved relationships with Argentina as

165
00:11:32,120 --> 00:11:35,120
Speaker 1: a result of that change? Will things proceed more smoothly

166
00:11:35,160 --> 00:11:37,200
Speaker 1: with the IMF relationship there Argentina?

167
00:11:37,600 --> 00:11:43,680
Speaker 2: Argentina faces very very tough problems to solve, and I

168
00:11:43,720 --> 00:11:48,600
Speaker 2: know that Argentina would only benefit of having the IMF

169
00:11:50,000 --> 00:11:56,760
Speaker 2: analytically to stand by Argentina and financially to stand by Argentina.

170
00:11:57,320 --> 00:11:57,839
Speaker 2: And I'm r.

171
00:11:57,840 --> 00:11:59,160
Speaker 3: I don't know if you realize it, but there's an

172
00:11:59,200 --> 00:12:01,600
Speaker 3: election going on in the United States and I am

173
00:12:03,000 --> 00:12:05,880
Speaker 3: I am curious. You've got two candidates with radically different

174
00:12:05,880 --> 00:12:09,120
Speaker 3: positions on a lot of different issues, whether it's trade, immigration,

175
00:12:09,320 --> 00:12:13,640
Speaker 3: the US's position on the global stage on economic policy.

176
00:12:13,840 --> 00:12:16,880
Speaker 3: What's your advice for the next president of the United States.

177
00:12:17,000 --> 00:12:20,080
Speaker 2: Look, I mean the elections in the United States. This

178
00:12:20,240 --> 00:12:24,840
Speaker 2: is the choice of the American people. They make this choice,

179
00:12:25,000 --> 00:12:28,440
Speaker 2: they have a president, and then this president sets up

180
00:12:28,440 --> 00:12:34,839
Speaker 2: an agenda for the country. We are always there for

181
00:12:34,920 --> 00:12:38,720
Speaker 2: our members to give them our best shot advice.

182
00:12:39,800 --> 00:12:43,040
Speaker 3: So you remembers worried about the outcome of the US election.

183
00:12:43,440 --> 00:12:46,960
Speaker 2: The whole of the membership is now facing a work

184
00:12:47,080 --> 00:12:53,000
Speaker 2: in which sixty percent of people are going to the pulse. Yeah,

185
00:12:53,440 --> 00:12:57,480
Speaker 2: you ask different countries. They have different worries, but are

186
00:12:57,520 --> 00:13:00,800
Speaker 2: also very amazing stories that I hope you would tell.

187
00:13:01,200 --> 00:13:06,080
Speaker 2: I was with Professor Hunise of Bangladesh. Here is a

188
00:13:06,160 --> 00:13:10,760
Speaker 2: country in which the youth of the country said, no

189
00:13:10,880 --> 00:13:15,480
Speaker 2: more corruption. We want to turn a page. And for

190
00:13:15,559 --> 00:13:20,839
Speaker 2: us supporting this country to turn that page to get

191
00:13:21,040 --> 00:13:25,880
Speaker 2: a good growth and good prospects for their people. Amazing.

192
00:13:26,160 --> 00:13:29,840
Speaker 3: So listening to the younger population always important. Chris Allni Giorgava,

193
00:13:29,920 --> 00:13:32,360
Speaker 3: thank you so much. We so appreciate your time here.

194
00:13:32,440 --> 00:13:35,319
Speaker 3: Managing Director of course at the International Monetary fun Thank

195
00:13:35,360 --> 00:13:36,840
Speaker 3: you so much, my pleasure