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Quest Means Business

IMF and World Bank Spring Meetings; Top Court Approves Macron Plan Raising Retirement Age; US National Guard Airman Charged With Sharing Top Secret Documents; Indian Economy Likely To Grow At 5.9 Percent In FY24; Ukraine's Economy Shrank By More Than 30 Percent In 2022; IMF Credits Morocco For Overcoming Economic Shocks. Aired 3-4p ET

Aired April 14, 2023 - 15:00   ET



RICHARD QUEST, CNN INTERNATIONAL HOST: It is the final day of the Spring Meetings of the IMF and World Bank, the final hour of trade on Wall Street

as we come to the end of the week, and oh dear. Have a look at the numbers, you'll see there we are, besides that smidgen of green, which must have

been caused by morning coffee, but otherwise, the rest of the day has just been down and miserable across all the major markets.

We'll get to the reasons why the markets and the main events we're talking about.

The IMF Chief Kristalina Georgieva has said rising interest rates, countries must act now to avoid debt issues later.


KRISTALINA GEORGIEVA, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: We do not foresee a debt crisis, we do see significant debt vulnerabilities.


QUEST: In the face of protests, the French Constitutional Council upholds pension reform. What next?

And Ukraine receives global assurances, long-term financial support, Finance Minister says just how much it will cost. The Finance Minister from

Ukraine is with me.

We are live in Washington, DC at the Spring Meetings on Friday. It's April the 14th. I'm Richard Quest at the IMF and World Bank, I certainly mean


Good evening.

There are few certainties in life, but you do know that when the tulips are out, it must be the Spring Meetings of the IMF and World Bank.

For some three decades, I've been watching those tulips grow, maybe not those, but you get the idea, and each time, it is the similar sort of

issues, but this year, optimism of spring is not being felt. There are banking crises, debt concerns, Ukraine, and we will have all of that

because you're going to hear from Ukraine's Finance Minister. You're going to hear from the Director-General of the WTO, Ngozi, and the Governor of

the Reserve Bank of India, all of whom will be with me during the course of the hour, as indeed will Julia Chatterley who will be just waiting in the


The IMF head Kristalina Georgieva has talked about global growth being weak, and with that weak growth comes greater problems, because if we are

going to have higher interest rates for higher inflation for longer periods, then it will increase the debt vulnerabilities of emerging and

developing economies.

And so the IMF MD was quite clear when she spoke to me, those countries must come forward now, to put things right.


GEORGIEVA: I think we see the future the same way. We have managed to come through a very difficult time, with no recession. We have still, however, a

problem of growth slowing down and inflation not slowing down enough.

And when we look into the future, unfortunately, prospects for growth are quite weak. We see eye-to-eye in terms of numbers, and I think it is people

like you that then give an interpretation that there may be differences in views.

QUEST: The reality is, there is very little difference, none whatsoever between growing 0.2 and minus 0.2.


QUEST: It feels horrible, as the ECB President said.

GEORGIEVA: Exactly, exactly.

What we have to recognize, we are still in a difficult time. It is an uncertain time. We are moving from a period of very low interest rates and

a lot of liquidity to a period of high interest rates and tight liquidity that of course, exposes vulnerabilities. We saw them in the banking sector

and the prospects for growth when inflation is so sticky and you have to fight it are not as bright as we want them to be.

QUEST: All right, so higher for longer on interest rates, but this also means higher for longer on debt, and I mean outside what is the usual

cancel the debt protest, but with a tightening banking liquidity and credit, there is going to be a debt crisis. Are you getting ready for that?


GEORGIEVA: We do not foresee a debt crisis, we do see significant debt vulnerabilities and to prevent them from turning into a crisis, we have to

act early.

Those who have not done it, please look at the profile of your debt and re- shape it, so it doesn't hit you. For countries that are already in debt distress, restructure the debt.

One piece of great news, Richard, at the time when great news doesn't come in big quantities, we had a fantastic breakthrough in the discussion on


We created a new sovereign debt roundtable. It brought traditional creditors, new creditors like China, the private sector, the debtor

countries, so we can actually move forward in a more systematic manner, and make sure that that restructuring happens in a timely manner.

QUEST: With Ukraine, the numbers are four hundred, five hundred billion for reconstruction, but four, five billion a month for ongoing costs.

Yes, the global economy and the nations can afford it. There is no question, $60 billion a year it can be afforded. Will they?

And I know you're going to tell me there's no option, but $60 billion is a lot of money for the foreseeable future.

GEORGIEVA: Yes, it is. And yes, they will.

We have today, an IMF program, $15.6 billion. What matters is not the money, only the money we provide. What matters is that this is a four-year

program with the handwritten $15 billion secured for Ukraine.

The miracle that has happened since last year is Ukraine moved from searching for money on a weekly basis to stitch their budget, to now having

a four-year predictable financing, so the country can pay salaries, pay pensions, secure social services, and with that confidence of the economy

working, also secure, winning the war.

QUEST: We've got through the winter, and the energy crisis didn't happen per se. We're now -- it's now between now and the end of the year really,

isn't it, to put in place so that next year is even better in that sense?

GEORGIEVA: But what we have seen is quite remarkable, the resilience of the Europeans exceeds anybody's expectations.

QUEST: Were you surprised?

GEORGIEVA: I'm surprised and very happy about that. Also, what we have seen is that when you are under existential threat, the impossible becomes


For next winter, for next winter, it will be still difficult for Europe, but Europe has already moved beyond dependency on Russia. And Europe has

put in place very strong transition plan for its economy.

QUEST: Now, the tulips are out and the daffodils are out outside, and it is always lovely to see that it always means the Spring Meetings. What

message are you sending with your delightful, colorful outfit today?

GEORGIEVA: Spring is a season of hope, and may the flowers of cooperation blossom.


QUEST: So, the Managing Director is wearing those lovely clothes for hope and blossoming. You're wearing white, I assume it is for hope, not


JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, "FIRST MOVE": Never surrender, especially where there is you and me.


CHATTERLEY: What do you think of the meeting?

QUEST: I am going to ask you, so I will go first. I think they now recognize this cake is baking. There is very little more they can do except

maybe a bit more on interest rates. They're now turning their attention to longer issues, deeper issues like debt.

CHATTERLEY: So important. I was really looking forward to this first global roundtable that was held this year, private creditors, China the biggest

onboard and fine, there wasn't enough progress, but there was movement.

The geopolitical backdrop stinks, quite frankly, but China was perhaps willing to at least talk about giving some fiscal room and some debt

repayment room to some of these correlations, it is so important.

QUEST: They helped create some of the problems.

CHATTERLEY: A hundred percent.

QUEST: With some --

CHATTERLEY: It doesn't mean, they have to be part of the fix or be willing to be part of the fix, but I think they recognize the need to be.

QUEST: Did you look at the debt burden? Many of these countries, it has happened over recent years, but cancel the debt outside.


QUEST: Cancel the debt protests.

CHATTERLEY: Don't even talk about canceling. We can't even have the word "suspension" of interest payments made, remember.

QUEST: No, rescheduling of debt.

CHATTERLEY: Progress is tough on this point, but I'll give you one step. The World Bank is saying that poorer nations need $2.4 trillion every year

to tackle climate finance and adaption.

At the moment, we transfer less to these poorer nations and they pay out an interest cost, it's insane.


QUEST: Okay, so we have a situation where the pandemic happens and everybody piles in. We have a recession or not, as the case may be, it will

be the same, de facto, and now, we all turn our attention away while these deep ends, sludgy nasty problems have to be dealt with.

CHATTERLEY: The big issues still have to be dealt with, but you raise a great point, which is the advanced nations are dealing with low growth,

they have to look at getting the balance back into the fiscal books, they have to stop pushing inflation and let Central Banks raise interest rates.

But at the same time, you can't leave huge swathes of the world to deal with big issues that we all need to be dealing with. And actually, I felt

like this time around, these big issues were discussed in a collective manner, despite the messy geopolitics.

QUEST: Interesting there, I felt the same at WEF.

CHATTERLEY: Great job, he said. Cheers.

QUEST: Thank you.

CHATTERLEY: He's talking to you --

QUEST: He was talking to you. The WEF, it was the same. People are starting to realize that obviously, climate finance is on the agenda, but

the AI crisis, and that's my word, that if you don't start dealing with it, it's going to be upon them before long.

CHATTERLEY: I've just done a big panel about digital public infrastructure and the benefits of tech --

QUEST: I'm sorry.

CHATTERLEY: I know, DPI, we will leave that there, but the benefits of technology, digitization, and inclusion, if all of these things can be

transformative, and actually in a far lower cost than the trillions of dollars that we're talking about to fix all the problems, so the beauty of

these meetings is you hear about things that you've not heard about before, and they are transformative.

QUEST: Okay, so is it still worth us coming?

CHATTERLEY: Yes. How many times have you been, Richard?

QUEST: Oh, this is my 30th or 31st or something.

CHATTERLEY: Thirty-first.

QUEST: Yes, yes. I remember when we were in the other building, and it's a long story, but don't worry about it.

CHATTERLEY: But you still come.

QUEST: I come here because they come here.


QUEST: And this is one of the few places where you have a chance to grab and talk to the Governors, the Finance Ministers, they are relatively

relaxed, and they give you time.

CHATTERLEY: Do you think the conversation is evolving about how the structure of this place works and that there is recognition that you've got

to be more inclusive in the conversation to China, to places that we are part of building it.

QUEST: That happened years ago. That happened years ago. After 50 years, it was enough. And to the last MD, and now, this MD, this idea of we're

going to let everybody in -- I've got a feeling you've turned the tables here, and now I'm being interviewed.

CHATTERLEY: Sir, Richard, how long have we got?

QUEST: What time is your train?

CHATTERLEY: You're cheating, and telling my secret. Forty minutes, I'm going to run. I've noticed you've got bell away from me though. It is

important. Oh, can I?

QUEST: All right, two shot. There we go.

CHATTERLEY: I feel that was louder than when you do it.

QUEST: Thank you very much. Thank you.

CHATTERLEY: Thank you, Richard.

QUEST: Julia Chatterley. We will continue tonight.

Demonstrators are protesting. They are protesting against the decision of the Constitutional Court, which has upheld the proposals and the law of

Emmanuel Macron on Pension Reform. Remember, they want to raise pension age from 62 to 64.

The Court also refused a request to have a referendum on the subject. It's a very big win. It's a constitutional win. It's a legal win.

Whether it's a political win, is another matter for Macron, because it's been a very costly victory. His approval ratings are at near record lows.

Fred Pleitgen is in Paris.

The decision wasn't completely unexpected. The protests are what? Muted tonight?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, no, I wouldn't say that they're necessarily muted. I think they're more


If you look around me, Richard, you can see there's riot cops all over this place. I'm in Place de la Bastille in Central Paris, and you can see that

the riot cops are out in full force, and if we turn around, you can see they seem to be maybe detaining someone. There is some sort of action

that's going on down here in this alleyway, as well.

So you can see that there is still a lot of anger here on the streets. The people have dispersed more, and it sort of a cat and mouse game, if you

will, right now, between the police and some of the protesters who keep coming out and chanting against the police.

So it certainly seems as though if this was a political win, also for Emmanuel Macron, the people that are out here on the street right now, they

don't seem to see it that way, and I think that's one of the things that a lot of the protesters that we saw today have been trying to make clear

where I have been saying is that, despite the fact that the Constitutional Council, as you noted, voted to uphold the lifting at the retirement age

from 62 to 64, a lot of the people are saying that they are going to continue to fight it.

And I think what you're seeing here, right now on the streets of Paris, and what you've seen over the past couple of days, Richard, really shows that

to a lot of people right now, especially a lot of the younger people, this is about more than just the reform of the retirement age or the lifting of

the retirement age, a lot of people are very angry with the way that Emmanuel Macron has pushed that through and you alluded to some of it going

to the special process.

They are using executive powers, essentially bypassing a vote in Parliament and while all of that today was seemingly greenlighted by the

Constitutional Council, it certainly has cost Emmanuel Macron a great deal politically.

And a lot of people here are saying, if we pan around a little more, you can see some of the major police presence that is on the ground here. And a

lot of these police officers, as you can see very much in riot gear, have been charging some of the crowds out here.

While it may have been a victory legally today for Emmanuel Macron in pushing this agenda through, a lot of people that are saying that the

political process here in this country has suffered a great deal because of that, because a lot of people from Emmanuel Macron's government have become

deeply unpopular because of it.

And also because for instance, politicians like Marine Le Pen, from the far right has already said, look, if you don't want something like this to

happen in the future, you have to vote for Marine Le Pen rather than for someone like Emmanuel Macron because he's not going to be up for election

anymore because he's already in his second term.

So it really is damaging some people say for the political process. Nevertheless, this pension reform is going to come. Of course, Emmanuel

Macron himself says it's absolutely necessary, he wants to be -- he will push it through.

But if you listen to the unions, you listen to some of the folks here, they certainly are not happy with the outcome that we're seeing today, and you

feel that out here on the streets of Paris tonight -- Richard.

QUEST: Fred Pleitgen, thank you.

As we continue tonight on QUEST MEANS BUSINESS, more from the IMF and World Bank.



The Pentagon leaker or the alleged Pentagon leaker has now been arraigned in court. Jack Teixeira has been before the Court in Boston. We know he's

21 and he was an Air National Guardsman and an IT specialist. He'd had top security clearance -- top secret security clearance for the last couple of


Posted documents in gaming chat rooms, and the charges include at the moment and there may be more to come, unauthorized, retention and

transmission of classified information.

Jason Carroll is outside the Boston Courtroom. Jason is with me now.

Well, I suppose now the long process of putting the case together in detail begins. Did we learn more about the case?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: We did We did. We got specific information about the charges that he now faces including a charge under

the Espionage Act that will be the first one. The unauthorized retention and transmission of National Defense Information 793 again under the

Espionage Act.


And then he faces another count, Federal count: Unauthorized removal and retention of classified documents, and material.

And in addition to that, the affidavit was unsealed where we got a little bit more information, Richard, about some of the things that he was alleged

to have done and about his security clearances that he had in the past.

Apparently, he held a top secret security clearance that was granted back in 2021. He had access to highly classified documents, I mean, programs

since 2021, and apparently, allegedly started posting some of these documents back in December of 2022.

So that unsealed document there, that affidavit gave us some more information as well.

What we also found intriguing was what was seen here in Federal Court during this initial Court appearance. Some of his family members were in

the courtroom. They were seated to the side. At one point his mother in what is believed to be his grandmother, in Court were praying and cried

during the proceeding, and during the conclusion of the proceeding, his father said the following, shouted out and said: "Love you, Jack."

At that point, Jack Teixeira did not turn around. He just simply looked ahead and said the following, "You too, Dad."

So a number of things that happened inside the Court. Meanwhile, outside of Court, Richard, once his parents left, they were surrounded by just like a

huge mass of reporters and photographers myself included, asking repeatedly if they wanted to comment about anything at all about what their son was

accused of. They left the court without saying a word -- Richard.

QUEST: Jason Carroll in Boston who will follow the events and will continue to watch. Jason, I'm grateful. Thank you.

Back in the World -- back at the World Trade Organization, the view is that subpar growth with trade for this year will continue. The reasons are

somewhat obvious, perhaps geopolitical tensions, the Ukraine war, inflation, and monetary tightening.

I talked to the WTO, Director-General Ngozi Okonju-Iweala, and despite all these rather serious headwinds, the DG reminded me trade is resilient.


NGOZI OKONJU-IWEALA, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: It's a question of is the glass half full or half empty? So it's a bit of both.

On the one hand, World Trade has been resilient. In spite of all the ups and downs we've seen world trade has enabled us to move goods from places

like the issue of food security, moving food from where it is made to where it is needed. It's allowed countries like Ethiopia who could not get access

to grains in Ukraine and Russia to be able to move to the US and Argentina to buy food.

So trade has helped build resilience, but on the other hand, it is slowing. Freight growth in trade is slowing.

QUEST: What can we do to try to arrest the slow down and reverse the trend?

OKONJU-IWEALA: Well, look, that's a big question, because global growth is also slowing, and we see that all this is going to be sluggish in the next

few years.

So next few, let's say years, so what should we do? We need to do a number -- we need to find ways to increase demand if we want trade to grow. But if

you do that, you have the problem of inflation, which is being battled right now.

QUEST: So are we moving to where we're just going to have to accept subpar growth, trade difficulties, and just suck it up?

OKONJU-IWEALA: I don't think we have to accept it. We have to notice that this might be the reality we are facing in the next few months or maybe a

couple of years. But there are policies we can take, you know, in order to try to reverse this and to get growth back, and that's what every country


QUEST: I want to quote you, this is what President da Silva, Lula da Silva says, he was talking China, he says, "Every night, I ask myself why

all countries have to base their trade on the dollar." Now, yeah, of course, you know, there's an obvious reason, isn't there? It's the world's

reserve currency, the largest single economy.

And really, there is alternative, arguably the euro, but there's no alternative.

OKONJU-IWEALA: That is correct. And it's going to take time before alternatives develop. But there are countries who are beginning to trade

with each other in each other's local currencies, and some of that is going to be inevitable down the line, but it will take a long time to move away

from this reserve currency, the dollar that everybody has confidence in.

And I think it's because the world has confidence in it that you see dominating trade and exchange.


QUEST: But isn't there an interesting possibility here, in a sense that if a country does want to have a reserve currency, or does want to have the

trade currency, you've got to run your economy with an element of stability, an element of competence. And well, you've got to have trust in

your currency and your economy.

OKONJU-IWEALA: Absolutely right, Richard, that's why the dollar keeps dominating. But as I said, there are countries who are coming up among the

emerging markets, who are beginning to trade with each other in each other's currencies, but you need to have all those elements.

And in an uncertain world, where we have all of these crises, one upon the other -- the war, the pandemic, you know, food crisis, energy crisis,

everything, climate change an existential threat piling on, it's such an uncertain world, monetary tightening.

It is very difficult to have a grip on your economy because there are so many external factors with negative spillovers that you're having to deal



QUEST: That is the Director-General of the World Trade Organization. We will continue to discuss the issue of trade and of course, economic growth.

Joining me after the break, the Governor of the Bank of India is with me. Sir, we're looking forward to talking to you after the break. Thank you.



QUEST: Hello, I'm Richard Quest at the IMF and World Bank in Washington. We have a lot more QUEST MEANS BUSINESS for you this evening.

These three gentlemen will be with me. That's the Governor of the Reserve Bank of India, Minister of Finance from Ukraine, and from Portugal, Mario

Centeno, the governor of the Bank of Portugal. They will all be giving their views on their various economies and greater growth in just a moment.

Only after I've done the news headlines though, gentlemen, because this is CNN and on this network the news always comes first.


President Biden has been spending his last day in Ireland visiting County Mayo. His first stop was the Knock Shrine, the Roman Catholic pilgrimage

site. The president also visited the North Mayo Heritage Center to research his family tree.

The suspect in the stabbing death of a Cash App founder Bob Lee has appeared in a San Francisco court on Friday for his arraignment. Nima

Momeni is seen here on the left will be held without bail until the next court appearance. It will continue until April 25.

And a mission to explore Jupiter has been launched by the European Space Agency. The Juice Mission hopes to uncover the mysteries of Jupiter and its

moon. It's expected to take eight years for the spacecraft to reach Jupiter and then spend three years exploring parts of the solar system.

Janet Yellen, the U.S. Treasury Secretary is optimistic about a soft landing. She was speaking to Fareed Zakaria, the Treasury Secretary, and

she acknowledged that there are risks ahead.


JANET YELLEN, U.S. TREASURY SECRETARY: What people call a soft landing is possible. So, I do think there's a path to bring down inflation while

maintaining what I think all of us would regard as a strong labor market. And the evidence that I'm seeing suggests we are on that path. Now, are

there risks? Of course I don't want to downplay the possibility that there are risks here, but I do think that's possible.


QUEST: The U.S. Treasury Secretary the whole interview is on Fareed Zakaria GPS this Sunday.

India's an economic bright spot. According to both the fund and the bank, it's the second fastest growing G20 economy at the moment. The IMF is

projecting the best part of 6 percent growth in 2023, compared to 2.8 for the rest of the world. Companies are seeking to expand outside China or

growing there. With Apple expanding 7 percent of iPhones are now assembled India.

Shaktikanta Das is the governor of the Reserve Bank. Governor, it is good to see you, sir. The message is one of growth out of India, but at the same

time, you are not immune to the spillover effects of both the slowdown in the west or the other countries and higher inflation, higher interest


DAS: You see, on growth, let me say that the year which we just concluded on 31st March, that is a financial year '22, '23. India is expected to have

a recorded GDP growth of 7 percent. And for the current financial year, from April to March next year, we expect growth to be 6.5 percent, which is

above what the IMF has projected. That's because the aggregate demand conditions remain good. Investment conditions remain good.

Coming to spillovers?


DAS: Now coming to spillovers, if you are referring to the slowdown of the growth elsewhere, two points I would like to mention. First, that the

domestic economic activity, the domestic consumption demand, both rural demand as well as urban demand, they continue to be strong. Domestic

investment activity, public investment is doing well. Private investment in critical sectors are also picking up.

And one more point with regard to the banking sector crisis which has developed elsewhere in Europe and in the United States, our banking system

remains well insulated. In terms of all parameters our banking sector is resilient and stable and healthy.

QUEST: Right. So now we look at, for example, the energy requirements of India and the purchase of Russian oil, for example, which at lower prices

is a benefit to your economy, but creates difficult problems as well.

DAS: Yes, in the sense we have a huge energy requirement. You know, India, despite growing very fast, we have still lot of population at what we call

living below the poverty line. And naturally, India cannot pay very high prices for energy. So India has been, without violating the sanctions,

India has been importing oil from wherever it is available. And in any case, it's not the government which imports. There are companies which

import. They are doing refining and they are selling it all over the world.

QUEST: Do you find -- does India currently find itself in a tricky position between the U.S. and with China? The worsening relationship between those

two giants creates opportunities certainly for India. Do you have to make a choice?


DAS: No, I think that is an issue on which as a central bank governor, it's not for me to really commit.


DAS: It's for the government, for the minister or somebody from the government to commit.

QUEST: Right.

DAS: As central bank governor, it's not my, you know, it's not my domain.

QUEST: All right, so firmly your domain is inflation and the fight against inflation.

DAS: That's right.

QUEST: At what point do central bank governor say enough is enough? You know ,if your target 2 percent, you stop at 2.3. If you've got a range of

two to four, you say 5 percent, we've done enough. That'll be fine. The pivot question is what you're all talking about or concerned about.

DAS: You see, during the inflate, during the COVID times, our inflation target is 4 percent. And we have a tolerance band of 2 percent on either

side. That is, two to 6 percent is what is tolerable. During the COVID times, because we had to provide support to the economy, the Monetary

Policy Committee of the Reserve Bank decided tolerate a slightly higher inflation.

But then a time came when it exceeded 6 percent, which is the other problem.

QUEST: That's the problem. See, that's what happens when you --

DAS: Exactly.

QUEST: When you increase the range. So are you going tolerate again?

DAS: No, I'm coming to the point. So the moment it exceeded that and by that time, the COVID time was behind us, we acted in time and in about six

successive meetings, we have increased our policy rate by about 250 basis points.

And now the inflation is the latest print. It has come below 6 percent. And in the last meeting, that is last week, we had the latest Monetary Policy

Committee meeting there. The Monetary Policy Committee decided that we have already done 250 basis for rate increase over the last one year. Let us

assess its impact.

And in the last meeting, the Monetary Policy Committee decided to take a pause but not a pivot. We have taken a pause to assess the full play out of

the impact of all the action that we have taken and then decide, depending on the incoming data and depending on the outlook, we will take a call in

the next monetary policy meeting and on the future action.

QUEST: You're closing but not pivoting.

DAS: That's right.

QUEST: Thank you, sir.

DAS: Thank you.

QUEST: Very, very much.

DAS: Thank you very much.

QUEST: Thank you. I need to update you with the markets as we do come towards the end of what is a very busy week. The markets are down. You've

got there the big board, which is of 180 odd points. The Dow has fallen quite sharply throughout the course of the day. But it looks like we might

be just holding back a bit. A little bit.

We're at the World Bank meetings. The IMF and World Bank meetings. The World Bank president spoke to Julia Chatterley on the question of the

Russian economic situation. Now, the bank president, of course, David Malpass is retiring later this year. He was quite clear that forget the

official numbers from the Russian government, the real situation was likely to be much worse.


DAVID MALPASS, WORLD BANK PRESIDENT: I think life is hard in Russia because they're excluded from traveling to many parts of the world. They've seen

their supply chains have to change dramatically, which creates --


MALPASS: -- brain drain, shortages, young people moving out of Russia because they don't want to be a part of the war. So the GDP numbers are not

capturing the reality of the horror of this war.


QUEST: The Finance Minister of Ukraine is with me. Minister, good to see you, sir.


QUEST: The numbers that we've heard over the last couple of weeks 400 billion for reconstruction, 14 billion for immediate needs, 4 billion a

month as ongoing. Does that sound about right?

MARCHENKO: It's right. Correct figures. We are seeking for support for reconstruction and our current needs is 14 billion.

QUEST: That's immediate needs?

MARCHENKO: Immediate needs, yes. We need to restore our electricity. We need to repair our roads, bridges, as well as the mining activities. Do the

mining activities.

MARCHENKO: Right. So -- and then you need another 4 billion a month roughly for ongoing payment of salaries, pensions and the like.

MARCHENKO: We already settled with this. We already have a program with IMF. Two weeks ago we received board agreement to support Ukraine with

fines 15.6 billion generally to help us to cover our needs for 2023 for budget needs.

QUEST: Do you worry at all that the rest of the world is going to say this is getting too expensive or is the cost really I mean, to use that phrase,


MARCHENKO: If Ukraine it will not be. But if we lose, Ukraine will lose, every country in the world will lose because Ukraine is struggling for

western democracies.

QUEST: What do you make -- so we now know the alleged Pentagon leaker who has been arraigned today in a court in Boston. The damage because of what

was revealed about Ukraine's missile position was very serious. What do you now make of the situation?

MARCHENKO: I think our military command will just for this reality and raise they will find a way how to better use an opportunity for contrafancy



QUEST: What would you say to the accused man assuming, you know, what would you say to him about what he's alleged to have done?

MARCHENKO: I am not prosecutor. Sorry, I am financial guy so it's not my business for authorities which should look at this case.

QUEST: I notice on a much more positive note you're talking about the energy ministers talking about exporting electricity again.


QUEST: That there is the position. Now, you're at this really crucial moment, I don't just mean militarily, I mean economically that rebuilding

but also continuing to develop the growth areas that do exist.

MARCHENKO: Yes, it's necessary for us to show that we can restore our capacity very soon. Our economy should run out, we should get enough taxes

to pay for necessary military operation and for other stuff. So, for us it's necessary to get business in Ukraine, to attract business in Ukraine

because now I see that the right moment to call in for all our partners to support their business to step in Ukraine.

QUEST: And what about agriculture which has been a backbone and now we're going to have exactly the same issues. I mean I can't believe that you and

I are talking about what we talked about last year, but now we're going to have exactly the same issue of whether or not the grain can be grown, it

can be harvested, it can then be exported, all of these things again.

MARCHENKO: Well, we are ready to cover all needs for wood, for food, to secure all necessary exports for our commodities. But it's a question of

grain deal, continuation of grain deal as well as finding our other roads through Donbas, through western border and we are now approaching our

European colleagues to help us to rebuild good export roads.

QUEST: When I spoke last year with you and over the year I don't think either of us expected that we would still be talking in such dreadful

terms. But there's always next year, sir. We'll talk more again and hopefully things will be different.

MARCHENKO: I also hope so very much. Thank you.

QUEST: Definitely. Its Quest Means Business. We are live at the IMS in Washington.


QUEST: Last year, Portugal had huge economic growth. It was extraordinary. The country did really well. This year, it will not be so impressive if the

IMF numbers believed it's 1 percent compared to 1.7 and 1.7 next year compared to 6.7.


The governor of the Bank of Portugal is with me, Mario Centeno. Good morning to you. Or good afternoon, Governor.


QUEST: All right, what's gone wrong? You're going to slow -- you're going to grow much slowly.

CENTENO: We are going to grow much slowly, but still we expect more than what the IMF forecast says. But we need to understand that last year growth

was in great part due to the recovery from COVID yet. We are growing very close to potential. The labor market is posting very good numbers. The

unemployment rate is low, wages grow moderately. So we think it's a good condition.

QUEST: How much more work do you think the ECB has to do? You are on the Governing Council, after all.


QUEST: So how much more work do you have to do? You know, this isn't really are you going to raise next month or month after, whatever? Is there much

more to do?

CENTENO: I think we have to understand where we are right now. We did a lot in a very short period of time. Never before this happened. We did not act

alone. We act globally with most central banks around the world. This generates spillovers into our action that will help us also bring inflation

down, and inflation is coming down. So this is the picture right now.

QUEST: Right. Very elegant way of but not telling me how much more there is to do.

CENTENO: Yes, because we need more data to have a final answer to your question.

QUEST: Right. The core bit of data that you won't have, or that's going to be very difficult to quantify is the implicit tightening as a result of

tightening of bank lending, tightening of credit conditions.

CENTENO: But something is going on already.

QUEST: Up front.

CENTENO: Yes, because the tightening is with us. 350 basis points in seven months is a lot. The monetary stance right now is one of tightening. It is

making its way into inflation. Inflation came already from 10.6 in October to 6.9 in March. We expect it to be very close to 2 percent in the first

half of 2025. This is our way.

QUEST: The governor, you probably couldn't hear you standing to side, but the governor of the Reserve Bank in India was saying he is pausing, not

pivoting. I think that's a key thing that, you know, you're going to have to pause because of all that monetary policy, stimulus, tightness in the

system, but it's not a pivot.

CENTENO: No, but even when we pause, the tightening will be with us because the interest rate is above the natural interest rate. So tightening will

not stop when we pause.

QUEST: OK, so we now move to this nirvana with people saying cuts interest rates. There are those who saying we could see cuts before the end of the

year. I can't say I see that.

CENTENO: I can't say I see that either in the Eurozone, at least. I think we need to understand that overshooting is a very big risk for financial

stability. We need to keep very close to the data and the data is telling us that inflation is coming down. We did already most of our trajectory. We

are very close to the terminal rate. I don't know if it's 25 basis points or 50 basis points, but we are getting very close.

QUEST: Is it possible that we could see that this banking tightening as a result of the banking crisis is much worse than people thought and it could

actually really clobber?

CENTENO: We have been very, very careful about that.


CENTENO: Financial stability is very important for monetary policy efficiency. So, we don't see risks accumulating of the size that you are

kind of asking me about. So, we will continue monitoring all dimensions of now.

QUEST: Now, will you be going to Marrakesh in the autumn?

CENTENO: Yes, I will.

QUEST: Great place, isn't it?

CENTENO: It is. So it's going to be great.

QUEST: Minister Mario, many thanks indeed. Marrakesh is where the next IMF annual meeting. It's held out of Washington every third year. And we'll be

there. I spoke to the minister, finance Minister from Morocco.


NADIA FETTAH, MOROCCAN FINANCE MINISTER: Global conversation that is happening in Africa after 15 years, and we so proud that the south is

finally part of this global conversation.




QUEST: Now. that's me in Marrakesh in 2019. Magnificent. It was just wonderful to be there. The IMF and World Bank meetings are going to be in

Marrakesh every third year. The annual meeting, which is the one held in the autumn, is held out of DC. And so this year it is Marrakesh. I'm

excited to be there, of course. Magnificent country, Morocco.

Now, as for these meetings, when it comes to Morocco, the IMF has got praise for the country. It says there has been a strong COVID response,

strong safety net has been put in position, and a good line of credit is now in place. All of which was perfect for the Moroccan finance minister

when she joined me and we surveyed the meetings later in the year.


FETTAH: We are honored to have the world financial world gathering in Morocco in October this year. It's a global conversation that is happening

in Africa after 15 years and we're so proud that the south is finally part of this global conversation.

QUEST: The south has suffered greatly during the pandemic. Morocco suffered greatly. What is it you now need in terms of policies from the rest of the

world in a sense because we're going into a slow period.

FETTAH: Actually, and this is the vision of our majesty is that the world is no more to dominate but to share. And what we want is partnerships as

equal. So, we are facing the same challenges as the rest of the world, but maybe tougher than the rest of the world inflation, commodity prices and

tightened financing conditions. So we need the world to give the share for the south to develop.

QUEST: How do they do that in a sense of doesn't it also start with governments like yours putting in place the strength of policies?

FETTAH: Absolutely. I think that Morocco is doing this strong reform for 20 years, but a very strong narrative of reforms for the coming years. And

this is why have allow us to go to precautionary leaning from IMF because were with our strong policy able to mitigate the crisis but build them a

better future.


QUEST: Do you feel sometimes caught in the middle? You know, China, U.S., EU. Everybody wants something. And countries like you in their camp.

FETTAH: Actually, we are an open country. We want trade, we don't want aid. We need to diversify our economy, which we are doing, but also our allies

(ph) and our market.

QUEST: But I was talking to Dr. Ngozi about trade, and the reality is people are courting you with the prospect of trade. You give us this, we'll

give you that. Who are your friends and who are your enemies or your friends with all?

FETTAH: We are friends of all, actually, and we want to work with all. Global value chain is an opportunity for us, and we have talent, and we can

show that we have talent for many areas in the global value chain.

QUEST: Now, when we come to Morocco.

FETTAH: You come in October and we will be --

QUEST: What do I need to go and see?

FETTAH: Marrakesh --


FETTAH: -- all the neighborhood and maybe some other cities and what Morocco have been building for the last 20 years under the guidance of my


QUEST: Will you be there?

FETTAH: Absolutely.

QUEST: You'll show us around?

FETTAH: Yes, absolutely.

QUEST: Moroccan tea.

FETTAH: Oh, you can taste some here already.

QUEST: I loved Moroccan tea.

FETTAH: And maybe Moroccan pure mint tea will beautiful.

QUEST: What's good? And now you're talking my language.


QUEST: Moroccan mint tea. I'll have a profitable moment after the break.


QUEST: Tonight's profitable moment at the IMF and World Bank. All too often hear what's talked about is the crisis de jour. And whenever they talk

about slowdowns recession, higher inflation, higher interest rates, there is an underlying that is often missed, but everybody knows about it is debt

crisis, growing debt, debt emergencies, the need for debt restructuring, particularly amongst emerging and developing countries.

Well, now they are talking about it. And they're talking about it clearly and loudly, because the economic scenario globally means that more

countries will be in debt crises before the end of the year. And that's why what the IMF managing director says is so important come now, get your help

before you need it. Put in place the policies. Because otherwise what we'll be talking about in Morocco is a debt crisis that simply got out of


And that our Quest Means Business for tonight. I'm Richard Quest of the IMF and World Bank in Washington, DC. Whatever you're up to in the hours there,

I hope it's profitable. Back with you on Monday in New York.