IMF / US DEBT CEILING G7

11-May-2023 00:02:11
The IMF warned of negative consequences to the global economy if US leadership is unable to resolve its political impasse over negotiations to extend the debt ceiling, spokesperson Julie Kozack told reporters Thursday in Washington, DC. IMF
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STORY: IMF / US DEBT CEILING G7
TRT: 03:23
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS

DATELINE: 11 MAY 2023, WASHINGTON DC / FILE
SHOTLIST
RECENT - WASHINGTON DC

1. Various shots, IMF building exterior

11 APRIL 2023, WASHINGTON DC

2. Wide shot, press room
3. SOUNDBITE (English) Julie Kozack, Spokesperson, International Monetary Fund (IMF):
“We encourage all of the interested parties to come together, reach consensus to urgently resolve the matter. And of course, the reason that we're calling for this is because we are concerned about the severe repercussions for both the US economy, but also the global economy.”
4. Wide shot, press room
5. SOUNDBITE (English) Julie Kozack, Spokesperson, International Monetary Fund (IMF): “The situation in the US, of course has is marked by some uncertainty. At the same time, we have seen resilience in the labor market in the US and in some of the underlying economic figures. So, on the US, I think the bottom line is right now our April we forecast remains relevant.”
6. Med shot, reporter
7. SOUNDBITE (English) Julie Kozack, Spokesperson, International Monetary Fund (IMF):
“We see that the impact could be 0.2 percent of global GDP, or the cost of fragmentation could be 0.2 percent of global GDP. But if we move into the realm of more extensive or runaway fragmentation, the costs could be as high as 7 percent of global GDP. And if we add technological decoupling, the cost could rise to 12 percent of GDP for some countries. So, we are encouraging countries when they look to strengthen their supply chain to do this on the basis of economic logic, as our Managing Director has said, and to limit these costs very much to the lower end of that bound to ensure that the global economy remains strong and robust.”

RECENT - WASHINGTON DC

8. Wide shot, IMF building exterior
STORYLINE
The IMF today (11 May) warned of negative consequences to the global economy if US leadership is unable to resolve its political impasse over negotiations to extend the debt ceiling, spokesperson Julie Kozack told reporters Thursday in Washington, DC.

“We encourage all of the interested parties to come together, reach consensus to urgently resolve the matter. And of course, the reason that we're calling for this is because we are concerned about the severe repercussions for both the US economy, but also the global economy,” said Kozack at her first briefing to a full room of journalists since the Covid-19 pandemic.

Failure to find a way to pass legislation raising the debt ceiling could lead to the first-ever default by the US as early as June, Treasury Secretary Janet Yellen has warned. This could lead to higher interest rates for sovereign debt, increasing pressure on countries already struggling with increased borrowing costs, the IMF has warned.

But the IMF was not prepared to put a number on the potential negative impact of a default at this point on the US or global economy.

“The situation in the US, of course has is marked by some uncertainty. At the same time, we have seen resilience in the labor market in the US and in some of the underlying economic figures. So, on the US, I think the bottom line is right now our April we forecast remains relevant,” said Kozack

The IMF is also urging countries ahead of the G7 meeting of Finance Ministers and leadership summit in Japan to resist pressures building to raise trade protections and ‘friend-shoring’ manufacturing.

“We see that the impact could be 0.2 percent of global GDP, or the cost of fragmentation could be 0.2 percent of global GDP. But if we move into the realm of more extensive or runaway fragmentation, the costs could be as high as 7 percent of global GDP. And if we add technological decoupling, the cost could rise to 12 percent of GDP for some countries,” Kozack explained.

“So, we are encouraging countries when they look to strengthen their supply chain to do this on the basis of economic logic, as our managing director has said, and to limit these costs very much to the lower end of that, bound to ensure that the global economy remains strong and robust.”

IMF Managing Director Kristalina Georgieva will be traveling to Niigata and Hiroshima, Japan to take part in the meetings.
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