## Press Briefing Transcript: Julie Kozack, Director, Communications Department, March 6, 2025

_IMF News, March 6, 2025_

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## Bibliographic details
- Published: March 6, 2025

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### Overview
- Speaker: Ms. Julie Kozack, Director of the Communications Department, IMF.
- Briefing embargo: embargoed until 11 a.m. Eastern Time in the U.S.
- 2025 Spring Meetings: scheduled from Monday, April 21 through Saturday, April 26; press registration available via www.IMFconnect.org.
- Media relations contact listed: PRESS OFFICER: Boris Balabanov; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson.

### Argentina — negotiations, congressional approval, program scope
- Status of negotiations:
  - Managing Director and First Deputy Managing Director recently met Argentine authorities; negotiations are "continuing in a constructive manner."
  - Authorities’ stabilization and growth plan is "delivering significant results," including notable strides in reducing inflation, stabilizing the economy, fostering return to growth, and poverty "finally beginning to decline."
  - New program would build on progress while addressing remaining challenges.
- Policy priorities under a prospective program:
  - Continue consistent fiscal, monetary and exchange rate policies.
  - Advance growth-enhancing reforms.
- Congressional approval and process:
  - President Milei has committed to seek congressional support as legislated in Argentine domestic law.
  - IMF notes "securing congressional support is a decision of the authorities as legislated in Argentine domestic law."
  - From IMF side: final arrangement and documents will require approval of the IMF's Executive Board once negotiations are completed.
- Program size and timing:
  - Potential program size (figures reported in media): mentions of up to $20 billion and an $8 billion initial deployment were raised by questioners.
  - IMF statement: "All I can say right now is this is still under discussion" and updates will be provided when more information is available.

### Lebanon — mission and next steps
- IMF team visit scheduled: March 10th to 14th.
  - Mission purpose: fact-finding to meet new authorities, discuss recent economic developments, reconstruction needs, and near-term economic priorities.
- IMF engagement:
  - Staff "providing policy advice and capacity development" in coordination with other international partners.
  - Future possible next steps: helping authorities formulate a comprehensive economic reform program.

### U.S. tariffs, trade fragmentation, and global implications
- Recent developments:
  - U.S. has imposed tariffs on Canada and Mexico and additional tariffs on China; Canada and China have announced retaliatory measures; Mexico to provide more details in coming days.
- IMF analysis and timing:
  - IMF expects to provide analysis at global level and for most affected countries in the World Economic Outlook update in April, and in relevant regional updates and Article IV reports.
- Impact expectations:
  - If sustained, tariffs on Canada and Mexico "can be expected to have a significant adverse economic impact" given strong integration with the U.S.
- Broader trends and uncertainty:
  - Managing Director’s observations cited: rapid advance of AI, changing patterns of capital flows and trade; "trade is no longer the engine of global growth that it used to be."
  - Comparative trade growth:
    - 2000 to 2019: global trade growth "reached nearly 6 percent on an annual basis."
    - 2022 to 2024: global trade "is growing closer to 3 percent."
  - Financial market volatility observed via indicators such as the VIX and measures of global uncertainty.
  - IMF research: sustained periods of elevated uncertainty can lead households and firms to hold back consumption and investment.
- U.S. bond yields:
  - U.S. bond yields have moved lower since the beginning of the year; markets may be reassessing outlook for monetary policy.
- Special note on small island and Caribbean states:
  - IMF will assess potential impacts (inflationary pressures, import cost increases) and include that analysis where relevant in upcoming forecasts.

### Ukraine — Seventh Review, disbursements, debt sustainability, and growth outlook
- Recent staff-level agreement:
  - On February 28th, IMF staff and Ukrainian authorities reached a staff-level agreement on the Seventh Review of the four-year EFF arrangement (subject to Executive Board approval).
- Disbursement and program size:
  - Ukraine is expected to draw about U.S. $400 million, bringing total disbursements under the program to U.S. $10.1 billion.
  - Overall size of the program remains unchanged at $15.6 billion.
  - IMF note: shifts in disbursement pattern reflect evolving balance of payments needs.
- Program performance and conditionality:
  - "Program performance in Ukraine remains strong."
  - All end-December quantitative performance criteria were met.
  - Understandings reached on policies and reforms to sustain macroeconomic stability.
- Debt sustainability:
  - Restoring debt sustainability hinges on implementation of authorities' debt restructuring strategy, including treatment of GDP warrants, and continuation of a revenue-based fiscal adjustment strategy supported under the program.
  - Ukraine’s debt was assessed in the last review to be sustainable on a forward-looking basis contingent on these areas; a revised Debt Sustainability Assessment will be part of the ongoing review.
- Growth outlook and uncertainty:
  - Estimated GDP growth for Ukraine: 3.5 percent in 2024.
  - Projected to moderate to 2 to 3 percent in 2025 due to labor constraints and energy infrastructure damage amid ongoing war.
  - IMF emphasizes outlook is "exceptionally uncertain" while the war continues.
- On frozen U.S. aid and geopolitical developments:
  - IMF is following developments closely; premature to comment on implications until further assessment.

### Egypt — Executive Board discussion, EFF fourth review, and RSF
- Board meeting and items:
  - On March 10th, Executive Board will discuss Egypt's Article IV consultation and the fourth review under the EFF, and will consider Egypt's request for an RSF (Resilience and Sustainability Facility).
- Potential access and amounts (subject to Executive Board completion/approval):
  - Under the EFF, authorities "would have access to $1.2 billion."
  - RSF size would be "about U.S. $1.3 billion."
- RSF delivery:
  - RSF is delivered in tranches; "not one lump sum up front" — phased dispersals based on conditions being met.
- Board calendar items:
  - Board will discuss waivers of non-observance for some performance criteria and modifications; IMF will provide more details following the Board meeting.
- Related items:
  - IMF to provide further detail on any state-owned enterprises program steps and waivers after the March 10th Board meeting.

### Japan — growth, inflation, monetary policy, and exchange rate
- Growth and inflation expectations:
  - Growth expected to strengthen in 2025; inflation expected to converge to Bank of Japan's 2 percent target by the end of 2025.
  - January WEO projection: growth in Japan at 1.1 percent for 2025 (to be updated in April forecast).
- Policy guidance:
  - IMF supportive of the Bank of Japan’s recent monetary policy decisions.
  - Further hikes in policy interest rate should be "data dependent" and proceed at a gradual pace given balance of risks around inflation.
- Exchange rate policy:
  - Japanese authorities have affirmed commitment to a flexible exchange rate regime.
  - IMF view: flexible exchange rate helps absorb shocks and supports monetary policy focus on price stability; maintains an external position "in line with fundamentals."

### El Salvador and Ethiopia — programs, Bitcoin, and recent reviews
- El Salvador:
  - Executive Board recently approved a 40-month EFF for U.S. $1.4 billion with an immediate disbursement of $113 million.
  - Program expected to catalyze combined support of about U.S. $3.5 billion over the program period from other IFIs.
  - Program objectives: restore fiscal sustainability, rebuild external and financial buffers, strengthen governance and transparency, and create conditions for stronger, resilient growth.
  - Bitcoin policy under the program:
    - Program aims to address risks associated with the Bitcoin project to protect consumers/investors and limit potential fiscal costs.
    - Recent legal reforms: acceptance of Bitcoin made voluntary; taxes can be paid only in U.S. dollars.
    - Under the program, the government has committed "to not accumulate for their Bitcoins at the level of the overall public sector."
    - Recent increase in holdings by the Strategic Bitcoin Reserve Fund: authorities have confirmed these are consistent with agreed program conditionality; IMF remains engaged.
  - IMF monitoring: closely watching U.S. Presidential Working Group on Digital Asset Markets; implementation details pending.
- Ethiopia:
  - On January 17th, IMF Executive Board completed the Second Review of the ECF arrangement, allowing a drawdown of about U.S. $245 million.
  - ECF arrangement supports reforms to address macroeconomic imbalances, restore external debt sustainability, and lay foundation for private sector-led growth.
  - Managing Director visited Ethiopia on February 8th and 9th, meeting Prime Minister Abiy and other stakeholders to review reform progress.

### Senegal — audit revelations and IMF engagement
- Court of Auditors report:
  - Released on February 12th; confirmed fiscal deficit and debt were underreported during 2019 to 2023.
  - Report found debt at "99.7 percent of GDP" in 2023 (as cited by questioner).
- IMF response and engagement:
  - IMF actively engaged with authorities regarding the report and misreporting under the IMF program.
  - Working with authorities to preserve fiscal and debt sustainability and to correct and remedy misreporting.
  - Resolution of misreporting in line with IMF policy is a precondition for discussions of any future IMF financial assistance.
  - IMF does not impose sanctions for misreporting; Executive Board will decide next steps, which could include waivers (which "could be a waiver without a request for reimbursement").
  - IMF will report back when more information is available.

### Thailand — 2026 Annual Meetings preparations
- Thailand to host the World Bank/IMF Annual Meetings in October 2026 (every three years the Annual Meetings are held abroad).
  - Last time Thailand hosted: 1991; 2026 marks 35 years since then.
- IMF engagement:
  - Preparations underway; IMF staff working with Thai authorities.
  - Aim to showcase regional dynamism and economic activity, and position Thailand as a contributor to international economic dialogue.
  - Ongoing cooperation to prioritize reforms that deliver lasting benefits beyond the meetings.

### Jordan — EFF, growth projections, and mission timing
- Recent Board actions:
  - Executive Board on December 12th completed the Article IV Consultation and the Second Review under the EFF arrangement for Jordan.
- Mission and review timing:
  - Third Review mission expected to take place in April.
- Growth and outlook:
  - Growth in 2024: 2.3 percent.
  - Projected growth: 2.5 percent in 2025; 3 percent in 2026.
  - IMF notes Jordan has demonstrated resilience and maintained macroeconomic stability despite regional conflict, while uncertainty remains high.
  - Projections to be updated in the April World Economic Outlook and as part of the mission assessment.

### Other topics noted briefly
- USAID suspension:
  - IMF is monitoring potential impacts on lower-income countries and working with country authorities; "too early to really say what the precise impact may be."
- Conflict endings and macro implications:
  - IMF will undertake analysis as events evolve to assess implications of conflict cessation scenarios (e.g., for Russia and Ukraine).
- Market volatility and uncertainty:
  - IMF will assess implications of recent policy and market developments in the April World Economic Outlook.

*Transcript made available later today on IMF.org; for clarifications or additional questions contact media@IMF.org.*

*Source: Press Briefing Transcript: Julie Kozack, Director, Communications Department, March 6, 2025*

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_Source: https://www.imf.org/en/news/articles/2025/03/06/tr030625-transcript-of-com-regular-press-briefing_