SPEAKER: Ms. Julie Kozack, Director of the Communications Department, IMF
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MS. KOZACK: Hello, everyone, and welcome to this IMF Press Briefing. It's wonderful to see everyone here today, those of you here in person, online, and I hope everyone had a very good summer.
My name is Julie Kozack. I'm the Director of the Communications Department at the IMF. As usual, this briefing is embargoed until 11 a.m. Eastern Time in the United States. I will start with a few announcements, and then I will open up to take your questions. Questions can be taken in person, on Webex, and also via the Press Center.
Starting with our announcements. During the week of September 22nd, Managing Director Kristalina Georgieva will travel to New York to attend the 80th UN General Assembly. While there, she will take part in a number of events and hold a series of bilateral meetings.
Next, our DMD, Deputy Managing Director, Kenji Okamura, will travel to Hanoi, Vietnam, on September 16th through 19th to hold meetings with key government officials and business representatives. DMD Okamura will also be in Tokyo, September 24th and 25th, for the 14th IMF-Japan High-Level Tax Conference.
This year's Michel Camdessus Lecture will take place on September 18th. It will feature Central Bank Governor from the Bank of Korea, Chang-yong Rhee. Our Managing Director, Kristalina Georgieva, will have a one-on-one discussion with Governor Rhee after his lecture. The event will be live-streamed on the IMF website starting at 10:30 a.m. Eastern Time in the United States.
And finally, and as a reminder, the 2025 Annual Meetings of the IMF and World Bank Group will take place on Monday, October 13th to Saturday, October 18th. Press registration to attend the Annual meetings in person in Washington, D.C. is open. You can register on the IMF Connect website.
And with that I will now open the floor for your questions. For those connecting virtually, please do turn on both your camera and microphone while speaking.
And the floor is now opened. All right, I saw that hand go up.
QUESTIONER: My question is about Ukraine's request to the IMF to launch a new financing program. Could you please elaborate on what the IMF's next steps in this regard and what the time frame is, as well as what are the Ukraine's prospects to get this new IMF program? Thank you.
MS. KOZACK: Okay, very good. Any other questions on Ukraine?
QUESTIONER: Thanks, Julie. Just a follow-up to this question. So, what is the IMF's assessment of the financial needs for Ukraine in terms of from this year to 2027, 2028, let's say. And if the IMF is going to decide on extra funding, what is the amount that could be provided, provided as an external part? And the last question, what are the next steps under the existing EFF program? When do you plan to make decisions on the next disbursements of funds to Ukraine under the EFF?
MS. KOZACK: Any other questions on Ukraine? Go ahead.
QUESTIONER: Julie, thank you. On Ukraine, just to sort of pile onto the questions there, there were already concessions made outside of the sort of excess capacity, you know, additional lending requirements. So, Ukraine is currently, I think, at 577 percent of quota, you know, which is just under the 600 percent level. Would you be able to extend that and expand that? And then finally, the assumption had been that the war would end by the end of this year. After the staff visit, and given current events, what is your current assumption?
MS. KOZACK: Okay. All right. Are there any other questions on Ukraine or anyone online want to come in on Ukraine? Okay, let me go ahead here.
Okay, so let me start by saying, and I think, I mean, obviously, you know, on September 9th, the Prime Minister of Ukraine, along with the NBU Governor and the Minister of Finance, formally requested a new IMF program. So, the next step will be for IMF Staff to engage with the Ukrainian authorities on the macroeconomic policies that will continue to maintain stability, finance critical expenditures, and restore debt sustainability over the horizon of a new program. The timeline for these discussions will be developed in the coming weeks as the team consults with the Ukrainian authorities.
With respect to some of the more specific questions, for example, on financing needs. So right now, Staff is working jointly with the authorities to look at the financing needs for the remainder of 2025, 2026, and over the medium term. The work that's underway is going to integrate, you know, proposed fiscal measures and a fiscal plan, which of course is also being discussed. Particular fiscal measures that are under discussion are the necessary prioritization of expenditures to an expenditure restraint, as well as revenue mobilization. And it will also look as part of this to project external financing needs over the medium term. So those discussions and that work is all underway.
And of course, part of that discussion will include looking at, you know, what are the appropriate assumptions for,regarding the potential time frame for the war and how can that best be incorporated into the macroeconomic framework and the financing needs. And of course, as part of the discussions, we'll also be looking very carefully at the appropriate financing, mix of financing, what is the amount of financing that the IMF can provide, and, of course, a discussion with Ukraine's external donors about, you know, the necessary external financing, and in addition, what is the appropriate amount of domestic financing and revenue mobilization for Ukraine to provide. So all of that is part of a comprehensive set of discussions that will begin as part of the discussion around the new program.
And with respect to the existing program, I don't have anything detailed for you right now, but I can say right now the focus is very much on moving to the new program.
QUESTIONER: Julie, can you just very quickly, broadly say, obviously, maybe this isn't obvious, but the IMF, is the IMF committed to continuing to support Ukraine?
MS. KOZACK: Well, so the way that we work with countries is when they request a program --n this case, Ukraine has requested a new program --our Staff then engages in a discussion with the authorities to put together an appropriate set of policies. So, from our side, we are very committed to, of course, working closely, continuing our close collaboration with the Ukrainian authorities to help them in the area of our mandate, which is, of course, maintaining economic, you know, economic and financial stability.
QUESTIONER: Thank you very much. Good morning.
MS. KOZACK: Good morning.
QUESTIONER: How are you?
MS. KOZACK: Very good, thank you.
QUESTIONER: Two questions. After the August Mission in Senegal, what concrete safeguards will the IMF require to ensure that corrective measures, such as debt management centralization, arrears audit, and treasury single account, are effectively implemented and that the budget misreporting does not occur again?
This is the first question. The second question which is regional -- rom a regional perspective, can Senegal be considered a pilot case for other African countries facing similar depth and transparency challenges, and that the IMF envisage adapting its support to a broader regional framework?
MS. KOZACK: Any other questions on Senegal?
QUESTIONER: I do have one, Julie, here.
MS. KOZACK: Yes, please go ahead.
QUESTIONER: Yes. Can you please provide an update on when the Executive Board will meet to consider Senegal's misreporting case? If this will be a separate meeting from the consideration or the discussion on a new program? And are there any other prior actions requested to the country to get to the point of the misreporting case meeting, or now that the audit is completed, the country can move to that misreporting case meeting in the Executive Board. Thank you.
MS. KOZACK: Okay, very good. So maybe let me step back for just a moment and give a little bit of a sense of where we are in our engagement with the Senegalese authorities.
IMF Staff visited Senegal from August 19th through 26th to discuss, you know, the corrective measures following the Court of Auditors report, which was published on February 12. And of course, this mission was there to have these discussions because there had been a misreporting case in Senegal with respect to fiscal and debt matters. The mission engaged with the authorities on the actions needed to address the misreporting case. And this was going to be important before the consideration of our Executive Board. So, the mission also reviewed the current debt situation and exchanged views with the authorities on the contours of a potential new IMF-supported program. So, this mission was an important step kind of toward, in the direction of bringing the misreporting to a close and moving forward with Senegal.
With respect to some of the specific questions. You know, so some of the measures that were discussed on the mission were aimed at addressing the root causes of the misreporting. So, some of the potential measures included centralizing the debt management function in Senegal, strengthening the national public debt committee in Senegal, completing a comprehensive audit of payment arrears, establishing a centralized debt database, reinforcing controls around budget commitments, and consolidating numerous government bank accounts into one treasury single account.
So, those were some of the measures that were discussed on the mission.
There are some other measures that are still being discussed between the authorities and Staff, and those discussions will need to come to a conclusion before our Executive Board can consider the misreporting case.
And overall, we see these measures and reforms as really necessary to restore fiscal transparency in Senegal, ensure reliable budget reporting, and also to prevent future misreporting instances.
So, now to the question on the regional perspective. I mean, here, I think at this point, all I can say is that, you know, from our perspective at the IMF, you know, we are a learning organization, so we are looking to draw lessons from every experience that we have in our engagement with member countries, right? But for right now, for this moment, we're very much focused on supporting Senegal in addressing the misreporting issue. But also, our support for Senegal is really about helping the country restore the transparency and credibility that are needed to regain the trust and support of the public.
QUESTIONER: Good morning, Julie. Well, there can be many questions about Argentina. But given the current political situation, which is very different from what it was in April when the agreement with the IMF was made, do you think there could be changes to the objectives of the program agreed upon with Argentina? And if the IMF is concerned that a potential government defeating the October elections could further complicate the economic program.
MS. KOZACK: Okay, thanks. I suspect we have other questions on Argentina? And then we'll go online as well.
QUESTIONER: Hi. In the event that the government fails to meet the reserve targets by the end of the year, the IMF will advance the remaining 6 billion from the program?
MS. KOZACK: Anyone else in the room have a question on Argentina? All right, let me go online. So, let's start with you.
QUESTIONER: Good morning. After the election result, is the IMF concerned about the lack of political support to implement the reforms need to consolidate the economic program? That's my question.
MS. KOZACK: Okay.
QUESTIONER: Yeah, hello. Thank you for taking my question. Argentina's government has been intervening actively in the foreign exchange market partly to meet the 20 billion program's reserve accumulation goal. Does the Fund see these interventions as consistent with the IMF-supported program and is it satisfied with this proactive approach? Thank you.
MS. KOZACK: Thank you.
QUESTIONER: Thanks again, Julie. Under the framework of the country's current program, does the IMF consider that Argentina needs to accumulate net international reserves at a steeper rate? Thank you.
MS. KOZACK: Okay.
QUESTIONER: Yes, Julie, thank you. So my question is, does the IMF support the Treasury intervention within the exchange rate bands as the Ministry of Economy announced last week, and/or if the IMF will allow additional action if the Central Bank fails to contain the dollar with the upper band following this week's exchange rate increases? And if, can you confirm or deny that the Minister of Economics, Caputo, is going to travel to Washington to have a meeting with Ms. Georgieva this week? Thank you very much.
MS. KOZACK: Okay, any other questions on Argentina? All right, so I'll share with you what I can today on Argentina.
And let me start by saying, you know, as we recently stated, the IMF Staff, our Staff, are closely engaged with the Argentine authorities as they implement their program. And the program, of course, aims to durably entrench stability and to strengthen Argentina's growth prospects. We support the authorities' continued adherence to the fiscal anchor and their comprehensive deregulation agenda, as well as their commitment to safeguard the sustainability of the program's FX and monetary framework.
Maybe more specifically, I can say, you know, we do welcome the primary surpluses achieved through August on the fiscal side, and this is consistent with program targets. We look forward to the 2026 budget to continue this progress and also to lay the groundwork for the necessary fiscal reforms and to consolidate the gains needed to achieve this, gains achieved so far.
Let me also say that we do recognize very much the important progress in reducing inflation, and this has resulted in monthly inflation below 2 percent for four consecutive months. We also recognize that the role that tight monetary policy has played in helping to limit exchange rate paths through to inflation.
As highlighted in the Staff Report for the First Review of the program, enhancements in the monetary and liquidity management framework should continue to mitigate interest rate volatility and the associated negative effects on economic activity.
Now, with respect to some of the more specific questions. With respect to some of the questions on the FX Market, what I can share is that our Staff was informed of the recent spot market interventions by the Treasury, which the authorities explained were a temporary response to heightened market volatility. In those discussions that the team has had with the authorities, we have continued to emphasize the importance of a transparent, consistent, and predictable monetary and FX framework to help manage market volatility.
I can also say that with respect to some of the questions on reserves, and again I refer to the Staff Report for the First Review, we have encouraged, of course, the authorities to continue their efforts to continue to rebuild reserves, to strengthen confidence in the peso, reduce spreads, and secure timely access to international capital markets.
And then finally, what I can add about our engagements is that the Managing Director did speak with Minister Caputo earlier this week to discuss progress with program implementation. And we expect Minister Caputo to attend the Annual Meetings in October, as he always does.
QUESTIONER: Good morning. So just a couple of quick questions on Lebanon. Former Nissan Chief Executive Carlos Ghosn has said that Lebanon needs the IMF for fiscal discipline rather than a sum of money. Can the IMF sort of weigh in on this assessment that he made? And secondly, can the IMF provide any update on talks with Lebanon?
MS. KOZACK: Okay. Any other questions on Lebanon?
Okay, so on Lebanon, we did have a Staff team -- we have a Staff team -- that will visit Lebanon at the end of September to continue discussions on a comprehensive reform program for Lebanon. Lebanon's economy continues to face major challenges. The economy is, in 2024, we expect that the economy will have contracted by 7.5 percent, and that comes on the heels of a smaller contraction in 2023. But it does mean that the economy will have been in a period of contraction for two years.
Humanitarian and reconstruction needs are large, and they do require a consolidated and coordinated international effort and support. Given Lebanon's, you know, the substantial reconstruction needs, the authority's reform efforts will require significant support from external partners, preferably on highly concessional terms. And discussions on formulating a comprehensive reform program continue. And these can -- the goal is to eventually have these supported by, you know, an IMF program.
Now, with respect to kind of what is the right mix between, you know, fiscal and financing? I mean, as I've said, Lebanon will need a comprehensive reform program, and that will be needed to restore growth, reduce unemployment, and also, very importantly, improve social conditions for the people of Lebanon. And that's, of course, going to require a number of different parts, and policies will be one very, very important part of that, including fiscal policy.
But as I've said, financing will also be an important part of that. So I'd say the discussions that the Staff are having with the Lebanese authorities are really to look at what is the right mix of policies and policy reform, but also what is the extent of the external financing that will be needed beyond just financing, of course, from the IMF, but also from the broader international community in Lebanon.
I see you have a question on Lebanon online. Please go ahead.
QUESTIONER: Thank you. It's just a small, specific one, Julie. When do you expect to know the extent of losses that the local banks are going to take? Has that been part of the conversation already?
MS. KOZACK: So, I think what I can share is that the team has been engaging very substantively with the Lebanese authorities. And of course, part of those discussions are around getting a comprehensive picture of the situation of, you know, not just in the real economy, what is the situation for firms and consumers, but also very much the situation in the financial sector. So those discussions are certainly ongoing and resolving all of those issues will be an important part of this comprehensive reform program that is under discussion.
Okay, let's go to you.
QUESTIONER: Good morning. I have a question about the situation right now in France. We do know that [the] political situation is quite tense. Social turmoil is rising. Is there any concern regarding the macroeconomic stability in France right now from the IMF? Thank you very much.
MS. KOZACK: All right, let me go ahead and answer this one. So, I think our view on France is that the economy has remained relatively resilient even in the face of recent shocks. It's also the case that, you know, subdued demand overall is kind of weighing on growth, and so is some uncertainty.
I mean, obviously, we're following the political developments in France closely. We will not comment on those. And we look forward, though, to continuing the regular dialogue that we have with the French authorities. And as with other countries in Europe that have high levels of public debt, our advice has been clear and consistent, which is that France, you know, should continue on a path of, you know, fiscal consolidation, reducing the deficit over time so that debt can be put on a firm downward path.
And of course, we also encourage countries, particularly in the EU, our staff have done quite a lot of strong analysis on ways not only to tackle the debt problem from the fiscal side, but also how can Europe boost growth, how can Europe improve productivity and so that the debt problem can also be tackled, in a sense, from the -- from the growth side. And so those broad recommendations that we have for Europe as a whole also apply, of course, to France. And we stand ready, of course, to continue our good discussion with the French authorities.
QUESTIONER: I'd like to turn the focus to the United States. So social unrest was mentioned, and that is a topic that we have to contend with here in the U.S. as well. So, I wanted to ask you a number of questions about the U.S. economy.
One is the large revision in the unemployment data that we saw earlier this week and the inflation developments, and you know, from a point of view of monetary policy, what do you see as sort of a proper course of action now?
There have been, separately, and this is something that, you know, has been an ongoing concern, is the quality of the U.S. data after the firing of the BLS director. And you know, to what extent are you and have you been in discussion at all with the U.S. on the need to maintain, you know, some standard in the economic data? Are there any concerns that have come up for you since that event?
And then finally, on the issue of tariffs and this of course, affects European growth as well, is -- we are seeing now basically a move to a higher tariff world with less multilateral agreements, more bilateral and plurilateral agreements that, you know, whether it's the, you know, that are kind of anchoring in a higher tariff world. You addressed this in the July WEO, but the uncertainty remains, you know, there. So, I'm just wondering if you've got, given that we are now seeing the other countries moving to higher tariffs, particularly on China, Mexico is increasing its tariff on Chinese cars, and the U.S. has leaned on the European Union to adopt 100 percent tariffs on China and India, I just wonder if you can spend a few moments talking about that.
And perhaps, finally, with regard to the [Annual] Meetings, given the restrictions on visas and travel, are you expecting this meeting to be in any way shaped or different by the current administration's viewpoint on travel? Thanks.
MS. KOZACK: Let me -- any other questions on the U.S.? I don't see any hands up. So let me maybe tackle this in two ways. So, I'll start with the U.S., and then I'm going to talk a little bit about the global because some of what you touched on was global.
So, maybe just like, let me step back a bit on the U.S. and say, I think what we've seen over the past few years is that the U.S. economy has proven to be quite resilient. We do see now that some strains are beginning to show. Domestic demand has been moderating in the U.S., and job growth is slowing. The front-loading of imports early in the year and anticipation of tariffs did lead to volatility in the activity data for the first half of the year.
We also see that inflation is on a path toward the Fed's 2 percent target. We also see that there are some upside risks to inflation, largely as a result of the tariffs. So, of course, the Fed's job is a challenging one, balancing this, the path of inflation, but also the fact that the labor market has been weakening and there's downside risk to employment.
I think our overall sense is that given the downside risks to full employment, there is scope for the Fed to begin to lower policy rates. We also, you know, would say that the Fed should proceed cautiously, of course, in a data-dependent way in the coming months.
QUESTIONER: (inaudible) and Treasury Secretary have repeatedly called on the Fed to lower interest rates by not 25 basis points, but 50 basis points. Would that fall into a category of cautious?
MS. KOZACK: I think I would just say that we do see scope for lowering rates, given the downside risks to the labor market and to full employment. That's sort of where we come out at the moment.
Maybe turning to some of the questions on data. First, on the recent revision, what we have seen in the data is, you know, a big revision. The revision showed that employment in March 2025 was 911,000 lower than in the previous report. The revision can be driven by a bunch of different factors, some statistical and some related to response and survey errors. Although revisions are common in data, not just in the U.S. but across countries, this revision is a bit larger than the historical average.
And so, I think on this issue of the kind of data and the revisions and what does it mean, this is something that we're going to be looking at as part of the Article IV Consultation with the U.S., which, as we've noted previously, will take place in November. So, that's where we're going to tackle that question.
I would say just more generally, as an institution that uses data and focuses a lot on data, we do strongly advocate for member countries, all of our member countries, right, to publish accurate, reliable, and timely data on their economy. And this kind of data transparency strengthens the credibility of economic management in all countries. And so that's something that we generally support.
Now, turning to the broader questions on tariffs, here, maybe I'll just say a few words about the global economy.
So, what I'd like to share on the global economy is that since we had our WEO Update in July, the data that we've seen, especially with respect to the second quarter growth outturns, have been generally resilient, and I can give an example. For example, of Asia, where factors like some additional front loading on the trade side and fiscal support provided by some of those countries has helped keep them resilient. And for the U.S. what we've seen is that investment in technology, but also net trade, has been supportive of growth in the U.S.
That said, and I think as was mentioned, you know, although trade deals have lowered the effective tariff rate in the U.S. relative to the highs that we saw in April, the effective tariff rates are still well above the 2024 levels. And of course, as we've been saying, policy uncertainty remains elevated.
So, this is the way we see the global economy at the moment. And of course, you know, we are keeping up and monitoring all of the recent developments. We will put together a comprehensive picture of trade, the global economy, and inflation as part of the WEO. We're in the process of preparing the WEO. So, as these new developments are coming out, we will be incorporating them into our broad assessment. And that's where I'll leave it. We'll have the WEO in October.
And then maybe just, on your final question about the Annual Meetings, I would say, looking at the experience of the Spring Meetings, we had a robust attendance from and strong participation from our entire membership. And we look forward to the same at the Annual Meetings.
QUESTIONER: Just try to get back to the response. I'm sorry, it's up to you. You can take the question for the next time, or if you need more research, because in your response you were saying that, you mentioned that the IMF itself is in the process of learning. Which is a very good point, you know. Does this imply that in cases where certain reports are falsified or misreportings, the IMF would also be a part of the responsibility, despite the presence of your experts, whose role is to verify such misreporting? That was the question I wanted to ask you from your response.
MS. KOZACK: Yeah, no, look, I think we discussed this once before, we do look at all of the experiences we have. And we do always seek to do our best for our membership. How can we do better for the membership and for member countries? So that's something that we do consistently.
But when it comes to the specifics, you know, our staff do rely on countries providing us with accurate and timely data. So that is something that we do rely on - that the authorities provide us with accurate and timely data. But we also will work with countries where they have shortcomings in data to provide technical assistance. That's at the request of course of the country authorities. But we have a Statistics Department that will work to try to improve the quality of statistics for countries, should countries want that.
Okay, very good.
QUESTIONER: Thank you very much, Julie. My question is on Japanese yield rate. Recently JGB's longer term yield rate is staying or hovering at a higher level, especially compared with other advanced economies including Treasury Bond (phonetic). And what is the implication on such a development from the IMF view? Could the Japanese debt situation now finally face some tipping point toward further worsening? What is your view on that point? Thank you very much.
MS. KOZACK: Thank you. So, I think when it comes to Japan, I think we've been talking about this for quite some time, that the level of government debt in Japan is quite high. It's over 230 percent, is the estimate for this year, according to our World Economic Outlook. And we also do see, as you noted, gradually rising yields in Japan.
Our view is that all of this underscores the need for fiscal prudence in Japan. So it's, there's a need for a kind of thinking about a gradual fiscal consolidation over time. There's also scope to strengthen in Japan the rules-based fiscal framework to enhance accountability and credibility in fiscal sustainability. And this also could contribute ultimately to broadening the investor base in Japan, which can also help when we think about the government bond market more broadly.
With this, I'm going to go online for a few questions, and then I'll come back to you. Let's see online. Please go ahead.
I'm so sorry, we can't hear your audio. So why don't you go ahead, and we'll try to come back.
QUESTIONER: Hello, Julie. Good morning.
MS. KOZACK: Good morning. Yes, I can hear you.
QUESTIONER: Can you hear me on your end?
MS. KOZACK: Yes, I can hear you.
QUESTIONER: Okay. Thank you so much for taking my questions. I have just two questions on Egypt. My first is regarding the arrival of the IMF Mission to Cairo for the discussions for the Fifth and Sixth Reviews. Is it confirmed that the mission will arrive later this month?
My second question is on the economic, new economic development narrative Egypt launched this week. To what extent will the announced targets for the Egyptian economy over the coming five years support and boost the remaining reviews of the EFF's program, as well as the RSF's program? Thank you, Julie.
MS. KOZACK: Okay, thank you. Do we have you now?
QUESTIONER: Yes, I think my -- if you can hear me. Thank you very much for taking my question.
MS. KOZACK: Ah, okay. Let me finish on Egypt and then I'll come back to you on Ghana.
QUESTIONER: Okay, thank you.
MS. KOZACK: Okay, so this way because I think we have one more person who has a question on Egypt.
MS. KOZACK: Okay. We still can't hear you,. But I do see a question that came in from the Press Center, which I will read. It says, “Does the RSF Agreement with Egypt include 10 measures as reported? Upon completion of the review, how much will be disbursed and whether the expected disbursement will be both the Fifth and Sixth -- will be in both the Fifth and Sixth Reviews of the program.”
Okay, so let me share what I can on Egypt. So as we discussed, the Fifth and Sixth Reviews of the EFF program are expected to be combined and completed this fall. Meaning that we do expect to send a mission relatively, you know, in this fall to Egypt.
As mentioned in the Press Release that we issued some time ago, our view is still that with macroeconomic stabilization underway for Egypt, now is the time for Egypt to carry out deeper reforms to really unlock the country's growth potential. You know, create high quality jobs for the growing population and to sustainably reduce the vulnerabilities that Egypt has and also to increase the country's resilience to shocks. So that's where we are right now.
And with respect to the RSF, when I, if you look at the Staff Report that was published as part of the RSF, there is a table in that Staff Report which shows the phasing for the disbursements of the RSF. So the idea is that the First Review of the RSF would take place with the Sixth Review of the EFF, which will now be combined. Disbursements will be available under the RSF only when the relevant reform measures are assessed to have been met. And for the First Review of the RSF there are two reform measures that are scheduled to be assessed and the disbursement associated with each of those reform measures is about $137 million.
Okay, let's go to Ghana.
QUESTIONER: Yes, thank you very much, Julie, for taking my question. I have just two quick questions for you. Now, Ghana, we know, has concluded several rounds of debt restructuring with both bilateral and private creditors. Beyond immediate relief, I want to know from you how confident is the Fund that the debt trajectory is truly sustainable and what reforms remain nonnegotiable for Ghana to avoid slipping back into distress once the IMF program ends.
QUESTIONER: Two questions. The quick one has to do with the conversations around utility tariff proposals, which the government is considering from 2025 to 2029. Largely, the concerns have been the rate of increment that have been suggested now are too high. We are seen for -- for the ECG, we are seeing some over 200 percent recommendation. But then the IMF and the ECF agreement had concerned rates about the below cost recovery tariffs that we have in the energy sector, and is leading to some of the shortfalls that we are seeing. So what's really the IMF position on this?
And, as well, if you could quickly weigh in on the limited presence of the Bank of Ghana when it comes to the FOREX market. The government is looking at a 5 percent depreciation annually. So, what you think really about that particular projection made by the government.
MS. KOZACK: Okay, thank you.
QUESTIONER: Great. My question, thanks for taking it, is a bit more nitty-gritty, and I also have a question about crypto. But on Ghana, it's just there's a quote by this guy -- this guy from the New Patriotic Party, where he says, “If your vision for Ghana starts with a trip to the IMF, you have already failed. My vision is to build an economy that is so self-reliant and powerful that the IMF becomes irrelevant.” I mean that may be the wish of many countries, but I just, I wanted to get your comment on that, and I'll ask this quicker question afterwards. Thanks.
MS. KOZACK: Ok, I don't think there's any other questions on Ghana. If there are, please jump in. Okay. Nothing more on Ghana. So.
QUESTIONER: Yeah.
MS. KOZACK: Oh, there's someone else on Ghana?
QUESTIONER: Yes, it relates to the current dispute that's going on in Ghana with regards to Afreximbank, and they're claiming they have preferred creditor status, which of course the IMF does. So I'm wondering what sort of view the IMF takes on that claim?
MS. KOZACK: All right, let me share what I can on Ghana.
So on July 7th, the IMF's Executive Board completed the Fourth Review of Ghana's ECF Arrangement. After Board approval, Ghana received about U.S. $367 million. And that brought total support under the program to U.S. $2.3 billionsince the program was established in May of 2023. Ghana's macroeconomic situation is improving. Growth has continued to outperform expectations. And there have been, there's been a further significant improvement in Ghana's external position. The new administration has undertaken bold measures to address policy and reform slippages that took place in 2024 and to ensure achievement of the objectives of the program. Some of the measures they've taken include enacting a strong budget, strong public financial management reforms, tightening monetary policy, and adjusting electricity prices. And the authorities have also continued to make headway on the debt restructuring process.
Now, turning to the specific question on debt, which was the first question here, what I can say is that the recent restructuring agreements have significantly improved debt service indicators for Ghana, and that has created more space for economic recovery and also investment, much-needed investments in the economy. According to our latest assessment, public debt is expected to fall fairly sharply from 82 percent in 2022. It's public debt. We estimate, or we project, that it will reach 60 percent of GDP in 2025. So that is a fairly steep reduction in public debt. And that marks a quite significant step toward durably restoring fiscal sustainability.
Now, to make this stick for the country, it does mean that Ghana will need to continue on the path of reform. And some of the reforms that are needed to really entrench debt system sustainability will include boosting domestic revenue in the country, strengthening, as I mentioned earlier, public financial management to ensure that expenditures are being, are effective and efficient, and of course, in a broader sense, maintaining overall fiscal discipline. These are all really essential to lock in the recent gains.
Now on the question, I think there was a question on --
QUESTIONER: Julie?
MS. KOZACK: -- fuel subsidies. Yes?
QUESTIONER: I don't know if you can hear me now.
MS. KOZACK: I can hear you now. I'm taking a question on Ghana, so I'll try to circle back to you if we have time. Otherwise we'll connect with you bilaterally.
QUESTIONER: Thanks.
MS. KOZACK: So on the -- so I didn't fully follow the question on the energy sector.
I think what I can say is that what is essential from our perspective is that any tariff adjustments in the electricity sector aim to address longstanding inefficiencies in the electricity sector. Importantly, that they support much-needed investment in the electricity sector and that they are aimed at also preventing the accumulation of arrears in the energy sector. More generally, we are continuing to support broader energy sector reforms, including private sector participation in ECG operations. And this is part of a broader effort to strengthen the performance of state-owned enterprises in Ghana and to reduce fiscal risks.
And then finally, there was a question on some of the FX rules here. What I can share is that the Bank of Ghana's latest directives are intended to reinforce the role of the cedi as the sole legal tender in the country. They're meant to tighten controls on foreign currency transactions and to promote formal channels for the provision of remittances and trade. And these are steps toward broader financial integrity compliance with anti-money laundering rules and broader transparency in the FX market.
And on the question of preferred creditor status, I'm afraid I don't have anything for you on that here, but we'll come back to you bilaterally.
Let's go to you. You've been patiently waiting.
QUESTIONER: Thanks. Thank you, Julie. My question is about Russia. How does the IMF assess the current developments in the Russian economy in terms of business activity, output, manufacturing, and consumer spending? As the Bank of Russia, the central bank, has started to gradual easing of monetary policy. Thank you.
MS. KOZACK: Okay, very good. What I can say on Russia is that what we see this year is a fairly sharp slowdown in the economy compared to last year, where we saw some signs of overheating. So in our latest projection from July, we expected growth to slow to 0.9 percent in 2025, and that was down from 4.3 percent in 2024. Some of that reflected policy tightening, also lower oil prices, and broader cyclical factors.
Because the October WEO is coming up, we are in the process of revising and looking at that projection, including the drivers and the factors that you pointed to. So, we will have more to say on that in October.
But what I can say on the monetary side is that the Bank of Russia has lowered its key policy rate, you know, to 18 percent from 20 percent. And the Bank of Russia has cited the faster than expected disinflation.
That said, the monetary policy does still remain tight, and we expect or, the Bank of Russia is expected to keep rates relatively high until inflation is on a clear path toward the 4 percent inflation target.
All right, I have just a few minutes left so I'm going to go online. .
QUESTIONER: Hi, I’m from Thailand.
MS. KOZACK: Yes, please go ahead.
QUESTIONER: All right, thank you for taking my question. As you may know, Thailand is facing political instability right now. We had three prime ministers within just two years. So, my question is if the IMF comment on how this instability affects the Thai economy, given the context of the ongoing border dispute between Thailand and Cambodia, and also Thailand's structural problems. And do you think Thailand has enough fiscal space for any short-term stimulus to jumpstart the economy? Thank you.
MS. KOZACK: Okay, thank you. So let me just first say that I'm not going to, we don't comment on political matters. What I can say about the Thai economy is that in the WEO Update that we published in July, we did project at that time that Thailand's economy would grow by 2 percent in 2025 and 1.7 percent in 2026.
We're continuing to monitor the situation closely and we're going to be evaluating, our team will be evaluating the incoming data as we prepare for the October WEO. And so, any changes to those numbers or the forecast or the outlook will be included in the October WEO.
What we have seen in Thailand is some uncertainty, and we have recommended in the Article IV that policies should focus on both having a smooth trajectory but also making sure that the fiscal buffers and policy buffers are preserved in Thailand. So our policy advice on the fiscal side is that fiscal policy should be prudent because public debt has been high. And then, as the economy recovers, Thailand will need a gradual fiscal consolidation aimed at restoring fiscal buffers.
Now, of course, we will be looking at all of this as part of, as I said, as part of the upcoming WEO.
And I promised to come back to you. So you will have the last question for today.
QUESTIONER: Thank you, Julie. So yesterday the Egyptian Prime Minister confirmed that there will be no increase in electricity prices in the coming period. So how does this contradict with the IMF agreement with the authorities there and the requirement to gradually remove the subsidies? And how will it affect the upcoming revision that is scheduled to happen?
MS. KOZACK: Thanks very much. On Egypt, I don't have very much to add to what I already said, which is, you know, we are looking to combining, the Fifth and Sixth Reviews will be combined. We do expect those reviews to take place in the fall. And of course, as part of those discussions that the team will have with the authorities, we will discuss all of the measures that will need to be taken to enable a successful completion of the review at that time.
And I think with that, I will bring this Press Briefing to a close. Thank you all again for coming.
As a reminder, the briefing is embargoed until 11:00 a.m. Eastern Time in the U.S. The transcript will be made available later today on IMF.org. I know that there were some questions that we did not get to today, so please do reach out to our team at media@imf.org or via the Press Center, and we will come back to you bilaterally.
I wish you all a wonderful day, and I look forward to seeing you next time. Thank you very much.
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