The IMF expressed confidence and support for the European Central Bank’s move to unveil fresh plans to stimulate the eurozone economy announced Thursday (March 7).
“What I would say on the ECB announcements this morning is that their revised forward guidance and new targeted refinancing operations are appropriate steps to maintain strongly accommodative monetary and private sector credit conditions as is warranted until inflation is convincingly converging to the objective set by the ECB so were appropriate,” IMF spokesman Gerry Rice told reporters in Washington.
Rice also took questions on Venezuela and whether it would recognize the opposition leader Juan Guaido as the country’s leader. The IMF policy is to follow the guidance of its member-states, and while many have declared support for Guaido over President Nicolas Maduro, the Fund’s Executive Board has not yet made a determination.
Rice said that the situation is ‘fluid’ but that Venezuela is facing a complex set of steep challenges.
“Both Christine Lagarde and David Lipton have had spoken about the challenges the very difficult challenges facing Venezuela. And Mr. Lipton in particular talked about Venezuela facing one of the most complex situations that we have seen here at the Fund. And that's a combination of food and nutrition crises, hyper-inflation, a destabilized exchange rate, very debilitating human capital and physical productive capacity and a very complicated debt situation. So addressing this this complex set of challenges in Venezuela will require strong resolve by the authorities and broad international support.”
China’s newly released Government Work Report has cut the economic growth target to between 6-to-6.5% in the coming year. Rice said the IMF welcomes that move, and it should be seen as a positive step.
“The resetting of the growth target which you mentioned the IMF view is that this will allow China policy makers to focus on improving the quality of growth rather than maintaining a high quantity of growth per say. And certainly, to help avoid creating too much debt as you may know. This more modulated growth rate and China is something that the IMF has actually been advocating and encouraging and working with the Chinese authorities in that direction for some time,” Rice said.