Transcript

SPEAKER:  Ms. Julie Kozack, Director of the Communications Department, IMF

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As usual, this Press Briefing is embargoed until 11 a.m. Eastern Time in the United States.  Let me start with a few announcements and then, of course, I'll go to taking your questions in person on Webex and via the Press Center. 

First, the Managing Director will be in Angola from November 19th through 21st.  During the visit, she will hold meetings with the authorities and representatives of the business community, and she will also be engaging with students. 

Next, the Managing Director will attend the G20 Leaders’ Summit in Johannesburg, South Africa, on November 22nd and 23rd.  While there, she will participate in high-level discussions on the global economic priorities and hold bilateral meetings with counterparts.

First, Deputy Managing Director Dan Katz is visiting Germany, Belgium, and France this week, where he will be engaging with the authorities and other stakeholders. 

And with this, I will now open the floor for your questions.  For those connecting virtually, please turn on both your camera and the microphone when speaking.  All right, let's open the floor.  Okay, let's start with you. 

QUESTIONER:    So, my questions -- my question is about Ukraine's restructuring process.  Last week, Ukrainian authorities and GDP warrant holders terminated their negotiations without any agreement.  And Ukraine said that proposals are incompatible with its debt sustainability objectives and the IMF condition.  Would you please comment on the Fund's expectations for Ukraine's debt restructuring process and how it could affect the start of a new IMF program? 

MS. KOZACK: Okay, very good.     QUESTIONER:  Thank you, Julie.   Julie, as a follow-up, may I ask you about the ongoing process of negotiations for the new financial program?  Are there any details that you could share with us?  Any updates about timeline, amount of money, et cetera.  As a follow-up to this question, what is the IMF's current assessment for Ukraine's financial needs for 2025?  And the last one, I'm sorry to be lengthy, is the IMF currently satisfied with the process of reforms in Ukraine, including anti-corruption measures?  Thank you. 

MS. KOZACK: Okay, thank you. 

QUESTIONER:   Just to follow up on the anti-corruption measures.  As you know, in the last few days, a sort of major kind of corruption scandal has emerged in the energy sector in Ukraine.  And I'm wondering if that will point up the need for even, even tougher reforms going forward in a new program, and also if you can comment on the sustainability of Ukraine's debt, given the fact that the government has taken a major boost to defense spending in the last week or so.  Thank you. 

MS. KOZACK: Okay.  And right here. 

QUESTIONER: Still in Ukraine, could you just tell us if Mrs. Georgieva still plan to visit the country and when?  Thank you. 

MS. KOZACK: Okay, any other questions on Ukraine? And let me give the opportunity for anyone online who may have a question on Ukraine to come in.  Okay, I'm not seeing anything, so let me go ahead and take these questions.

So first, I can start by saying that a mission to discuss the potential new program with Ukraine is expected to begin soon.  And the discussions during that mission will focus on the policies to safeguard Ukraine's macroeconomic stability, ensuring debt sustainability, of course, and advancing structural policies.  And in these structural policies, there will be a strong focus on reforms to promote domestic revenue mobilization and, of course, to strengthen governance and combat corruption.  These will be some of the focuses.

With respect to financing, the financing of the potential new program involves two components, both of which will, of course, be critical parts of the discussion.  The first is going to be the domestic efforts, and I already mentioned the focus on domestic revenue mobilization.  Another focus of the domestic efforts will be the ability of the authorities to tap the local domestic markets for financing, and of course, a continued emphasis on expenditure control, including, importantly, a credible budget for 2026.  And then the second part of the financing that the team will be discussing with the authorities, and of course, international partners, will be the international support in a way that so first, what is the amount of international support that can be incorporated into the program.  And of course, ensuring that the terms of that international support are consistent with Ukraine's debt sustainability. 

With respect to any precise numbers on the financing gap, it's, you know, because the discussions are ongoing and the mission will start very soon, it would be premature to provide clear estimates of the needs.  But of course, that will be a critical part of the discussions that will take place on the mission.

With respect to anti-corruption and governance reforms, I think we've been saying for some time that Ukraine needs a robust anti-corruption architecture to level the playing field, safeguard public resources, improve the business climate, and attract private investment.  It is a central piece of reform for the donor community, right?  As Ukraine is seeking support from the international community for their program and many other, well, for the program in general.  So, this anti-corruption platform is really critical.  And of course, safeguarding the independence and operability of the anti-corruption institutions is of course a critical priority. 

What I can maybe just add is that the actions the most recent uncovered evidence of corruption in the energy sector is that it highlights the importance of pressing forward with anti-corruption efforts in Ukraine and ensuring that the anti-corruption institutions have the capacity, trust, and freedom to go about their duties. 

And on your question on the GDP warrants and the debt, here, what I can say is, as with all of our programs, you know, any ongoing debt restructuring processes will of course be assessed in the context of the broad debt sustainability analysis that we conduct at each program review, and, of course, as we're designing, very importantly, as we're designing a new program.  And so, we're of course closely monitoring the discussions that the authorities are having with their creditors.  We're not a party to those discussions.  But we will, of course, be incorporating all the information that we have into the assessment of debt sustainability. 

Okay. 

QUESTIONER:  Thank you very much.  Good morning, Madam Director, Julie Kozack.  Following the IMF's last mission to Dakar from October 22 to November 6, discussions focus on the potential new IMF-supported program, debt management, and fiscal transparency.  So, two questions.  Is the IMF advising Senegal to restructure its debt?  The Prime Minister, if I summarize the essence of his statement, said we will not accept any recommendation that undermines our sovereignty or economic stability.  The second one is what the IMF's latest assessment or commentary on Senegal's debt sustainability.  Thank you very much. 

MS. KOZACK: Okay. Are there other questions on Senegal?  Yeah.  Go ahead. 

QUESTIONER:  Hi,I would like to ask the same.  As it was mentioned by the Prime Minister that the IMF suggested that restructuring, and in that case, if Senegal will be restructuring that debt under the G20 Common Framework.  And following up on that, I would like to know if the post-mission debt sustainability analysis is ready, and the IMF is assessing the debt as unsustainable as of today.  Thank you very much. 

MS. KOZACK: Any questions online on Senegal? 

QUESTIONER:  Yes.

MS. KOZACK: Please go ahead. Welcome. 

QUESTIONER: Good morning.  Regarding Senegal, given the high public debt level, which is at 132 percent of GDP, and the ongoing debt management reform, what strategy could the government adopt to reduce debt vulnerability while maintaining investors' confidence and macroeconomic stability?                

QUESTIONER:  So, there's been a bit of back and forth, the advising Senegal and (connection difficulties).  The bonds have seemed to have softened up, and the bond market has reacted in a way that suggests that the IMF does think that there's a need for restructuring.  Would you like to attach any comments to that movement?  And then, separately in the tax mission statement, saying that the tax plan is (inaudible) ambitious and also comes with significant risks.  And I just wanted to ask significant risks of what?  Of breaching?  Of not taking (inaudible) bank?  Or significant risk of social unrest as we’ve seen, maybe, (inaudible)?

MS. KOZACK: All right, thank you very much.  You were breaking up quite a bit.  I think I got the gist of your two questions, one which was on movement in the bond markets, and the other was about the ambitious nature of the tax plan, as signaled in the press release. 

Any other questions on Senegal?  Okay, let me go ahead and talk a bit about Senegal now. 

So first, as mentioned, an IMF team did visit Dakar.  The mission wrapped up on November 6th.  The mission advanced talks with the Senegalese authorities on their new program request.  The discussions covered recent macroeconomic trends and policy priorities, and negotiations will continue in the coming weeks with a view to finalizing the IMF-supported program and agreeing on medium-term reforms. 

Now, with some of the specific questions, I do want to -- there were a number of questions on debt, for example, so I think I want to take this one in  three parts.  So first, I want to once again, you know, commend the authorities for their commitment to transparency and the steps taken to disclose the hidden debt.  I think this is a first, you know, a very important step that was taken.  It's been ongoing for quite some time.  But the authorities have shown a true commitment to transparency and to deal with and disclose the hidden debt.  And that is a very important step that the authorities have taken, and they deserve credit for that. 

Now, on some of the other questions on debt.  So, during the recent visit, as I said, it just ended a few days ago, staff and the authorities did discuss the significant debt vulnerabilities that Senegal faces.  And they also discussed options to address the challenges surrounding Senegal's debt.  And this is exactly, in a sense, what the role of the IMF is.  It's to provide some expert analysis and policy advice for the authorities to consider.  All of that said, of course, the choice and the specific nature of how to deal with debt and any debt operations and whether to seek a restructuring, for example, is a sovereign decision for the Senegalese authorities.

So far, our discussions with the Senegalese authorities on the mission and in the months leading up to the mission, it's been a long process, a very productive process, but they have provided a solid basis for us to move forward.  We're focused on assessing the debt dynamics.  We're also focused on assessing the viability of the authority's financing strategy and the measures that they can take to restore credibility and to reduce vulnerabilities around debt.  Some of these measures are things like centralizing debt management operations, improving transparency, and strengthening overall fiscal controls.  The IMF and the World Bank are also working jointly toward finalizing an updated debt sustainability analysis that would reflect, you know, revised data, the revised debt data, and the macroeconomic assumptions. 

And then the third thing that I want to mention is that, when we now look ahead, in addition to the work on the program and finalizing discussions on a new program, IMF Staff and management will propose an approach for the misreporting case that basically will involve measures agreed with the Senegalese authorities to address the root causes of the hidden debt and the root causes of the macroeconomic vulnerabilities.  And as part of that process, staff and management, would not request an early repayment of [Singapore] (Senegal)'s obligations to the IMF.  And this, of course, is all subject to formal approval by our Executive Board.  We do look forward to continuing our dialogue with the Senegalese authority to finalize an agreement on the remaining policies and the reforms that will underpin a new program. 

With respect to the last two questions, with respect to the question on market movements, I'm not going to comment on the market movements. 

And with respect to the specific question about the ambitious nature of some of the revenue measures or tax measures that was referenced in the press release, what I can say there is that based on our experience across a wide range of countries, when countries undertake ambitious tax or revenue plans, it's often the case that it takes some time for those measures to take effect.  And so, it's very important when designing the overall macro framework to ensure that the assumptions are sufficiently cautious and prudent so that they give time for those measures to take full effect. 

QUESTIONER:  Hi, Julie.   Argentina signed a 20 billion currency swap agreement with the United States.  Does the IMF consider this swap to be part of Argentina's net international reserve?  And if the answer is yes, does that mean, according to the IMF, that Argentina is now meeting all the program's targets? 

QUESTIONER:  Well, it's a question about also the reserve target.  It's do you believe that Argentina will reach the reserve target agreed upon with the IMF by the end of this year?  And what would happen if it doesn't? 

MS. KOZACK: Okay.  Anyone else here in the room on Argentina?     QUESTIONER:  Hi.  Sorry, yes.

QUESTIONER:  I just want to ask, as part of any IMF program, a country, the IMF requires to have financing assurances from other creditors, for example, official creditors under the Argentina program.  The PBOC swap that China has with the Central Bank of Argentina is considered financing assurances.  Now that the Argentina has a swap with the U.S. Treasury, and the next review will be, if I'm not mistaken, January next year, will this new currency swap be considered a financing assurance under the IMF program that Argentina holds right now?  Thank you. 

QUESTIONER:  Hi, thank you.  Just wanted to follow up on that.  In terms of the swap line with the us, whether the IMF has any visibility into those operations at all in terms of what's been drawn down from the U.S. SDR stockpile, and then the corresponding reserve rise for Argentina, and in terms of, like, whether or not the US has been made whole for its purchases of pesos.  So, if you can shed any light on that, we'd appreciate it.  Thank you. 

MS. KOZACK: Okay.  Let’s go online. Go ahead. 

QUESTIONER:  Yesterday, the Economy Minister said, and I will quote, "Now they say we have to accumulate $9 billion stipulated in those targets set with the IMF.  But for the Economy Minister, now the situation has changed, and we have managed to separate financial aspects from the monetary ones.  Therefore, we now see the accumulation of reserves as a means to further strengthen the Central Bank's balance of sheet."  My questions are, do you agree with this, and did the IMF decide to change the Central Bank reserves accumulation target?  And if so, what is the new target?  Thank you. QUESTIONER:  Hi, Julie.  How are you? 

MS. KOZACK: Very good, thanks. 

QUESTIONER:  Yes, I was also going to ask if there have been any changes to the reserve accumulation goal?  And also, if the negotiation, there's a negotiation that Scott Bessent said there were investment banks also involved in some sort of aid or financing for about $20 billion, if the IMF is involved in any way in that process, in that conversation?  And one more, if I may?

MS. KOZACK: Sure, go ahead. 

QUESTIONER:  If there are any discussions regarding the changes of the exchange rate bands in terms of accelerating the crawling rate. 

MS. KOZACK: Okay, thanks.   QUESTIONER:  Yes, Julie, thank you.  So, the question is, after the elections, the peso has continued to depreciate, and the Central Bank has failed to accumulate reserves.  So, what are the IMF expectations regarding the exchange rate system for this new base of Milei's administration after the elections?  Thank you. 

MS. KOZACK: Okay, I think there are no other questions on Argentina.  If anyone online additionally wants to come in on Argentina, please come on in now.  All right, let me -- let me go ahead and answer these questions.  So, I'm going to step back a little bit and give sort of a broad picture of where we stand with Argentina. 

So first, I want to emphasize that the authorities continue to take steps to strengthen macroeconomic stability and to address economic distortions.  Two things I want to highlight are that annual inflation has declined sharply from triple digits last year to around 30 percent in September.  And importantly, the pass-through from the recent exchange rate movements has been relatively limited thanks to tight fiscal and monetary policies.  So the policy framework is serving as an anchor around inflation expectations. 

Meanwhile, the Argentine economy is set to expand.  This year, we forecast growth of 4.5 percent in Argentina in 2025, and this follows a contraction in growth in 2024.  Activity is particularly resilient in Argentina in the energy, mining, and agricultural sectors.  And these, with trends, in terms of growth and overall economic activity, have been really critical to supporting a reduction in poverty in Argentina. 

Now, when we go ahead, important challenges persist in Argentina.  They are well known.  But the recent improvement in market conditions does present a window of opportunity for the authorities to strengthen macroeconomic policies, to entrench stability, and to accelerate reserve accumulation. 

Planned structural reforms in the areas of tax and labor, labor markets, are also necessary ultimately to support fiscal sustainability and further enhance the conditions in Argentina for private sector-led growth.  The financial support from the United States has helped stabilize markets in Argentina, and it complements the Fund-supported program.  The specific size and modalities of the support are bilateral matters between the U.S. authorities and the Argentine authorities.  But we see these efforts as reinforcing Argentina's reform and stabilization objectives.  For our part, we remain engaged in supporting Argentina's stabilization and reform efforts.  Strong and sustained implementation, as well as efforts to build consensus around the very important reforms, will be crucial to sustaining the impressive progress that Argentina has made so far. 

Now, with some of the more specific questions on the FX bans, what I can say there is that the choice of the FX regime is one for the country authorities.  Our view at the IMF is that the chosen regime needs to be consistent with strengthening international reserves and external stability, as well as ensuring strong and sustainable growth in the country. 

And on some of the questions on reserve accumulation and reserve targets, what I can say is that it would be premature for me to comment on whether the target will be met going forward.  But what I can also add is that in our discussion with the authorities, we have stressed the need to accelerate reserve accumulation efforts to help better manage volatility and to further strengthen market confidence.  In this regard, it does remain essential to maintain a consistent and robust monetary and FX framework.  

And I just have one -- I'm getting a note here.  Apparently, I misspoke in my answer on Senegal.  And so, I just want to say if I inadvertently said Singapore instead of Senegal, I apologize, I meant Senegal.  So just for the record -- I don't know why I would have made that mistake, although I did live in Singapore for a few years -- so if I misspoke, I apologize deeply to the people of Senegal, and I meant to say Senegal. 

Okay. 

QUESTIONER:  Thank you, Julie.  My first question is on the BOJ monetary policy. BOJ is now considering hiking the rate at the December meeting or next January meeting.  But new Prime Minister Takaichi seems not  so happy because she intends to expand fiscal policies.  What is the IMF's recommendation to BOJ at the moment on the monetary policy path, especially given the inflationary pressure in Japan?  And my second question is on the U.S.  The U.S. government shutdown finished yesterday, but in the absence of a lot of data and statistics, it's unclear on the state of U.S. economy.  And what is the analysis of the IMF on the U.S. macroeconomic situations and development, because now (inaudible) members seem to be so divided on the rate paths next meetings?  And what is your recommendation to the Federal Reserve to balance the risk between the labor market and new inflationary pressure?  Thank you. 

MS. KOZACK: Thanks.  So let me answer the question on Japan, and then what I'll do, I suspect others may have questions on the U.S.  So I'll open the floor again for questions on the U.S. before I answer on the U.S.  I assume there's no other questions on Japan, is that right?  I don't see anybody online either.  Okay, so let me step back a bit on Japan. 

So, in Japan, we expect growth to strengthen and inflation to converge to the Bank of Japan's 2 percent target by 2027.  That's consistent with our -- the projections in our October WEO.  We see growth accelerating from 0.1 percent in 2024 to 1.1 percent in 2025, and the moderation in commodity prices should help headline and core inflation to converge toward the 2 percent target. 

With respect to your specific question on the Bank of Japan, what I can say is that we support the Bank of Japan's recent monetary policy decisions.  Monetary policy remains appropriately accommodative.  And the high uncertainty in the recent few months underscores the need for the Bank of Japan to maintain its data-dependent and flexible approach to monetary policy. 

Let me now turn to the U.S.  So, Shu had a question on the U.S.  Any other questions on the U.S.?  QUESTIONER:  Thank you, Julie.  So, the very short question do you expect, does the IMF expect a contraction in the U.S. economy in Q4?  And what is the current perspective for 2026 Q1, Q2? 

QUESTIONER:  Any kind of numbers that you could provide for us.  Thanks. 

QUESTIONER:   So, can you maybe speak on if you expect the U.S. shutdown to have any spillover effects into the broader global economy?  And just secondly, the WEO sort of noticed or mentioned the resiliency of the private sector during this uncertainty picture.  But given that we have the longest shutdown in U.S. history just ended, the Supreme Court is deliberating on the emergency use of Trump's tariffs, as well as growing concerns over this AI bubble.  How long does the IMF think that the private sector could sort of be resilient for?  Thank you. 

QUESTIONER:  Hi.  As a result of the shutdown that has ended, we are learning that some data will be missing.  For example, we have just learned that the October jobs report will be released with no jobless rate.  How will this affect the Article IV that the IMF is preparing for the U.S.?  And I just wanted to follow up on this and ask if there's any delay on that Article IV or if you could provide any timeline on when that will be published or conducted?  Thank you very much. 

MS. KOZACK: Thank you.  Any questions online on the U.S.?

QUESTIONER:  Great.  Thanks a lot.  I'll keep it short.  You were just asked about AI bubble, so I wanted to ask about cryptocurrency.  The current administration is very, very pro crypto, and there's some debate.  The banks in the United States are lobbying to say that crypto platforms shouldn't be allowed to pay interest or yield and thereby become kind of an alternative or sucking out deposits from the banking system.  I wondered if the UN has any, excuse me, if the IMF has any view of that?  You've given some policy guidance to other countries, but what generally does the IMF think about cryptocurrency and digital asset platforms paying interest or yield in competition with banks?  And the implications. Thanks. 

QUESTIONER:  I wanted to follow up on the question on the spillover on the global economy.  Can you talk about what the spillover, the effect we have on Africa's economic in general?  And on the U.S., we've talked about financial inclusion and reducing the gap between wealth, gap between equality.  What effects do you think this spillover will widen the gap, the equality gap, between the U.S. as well as globally? 

QUESTIONER:  Hey there.  Sorry to join you from afar.  I just wanted to pile on with the U.S. questions, Julie.  So, you know, the question of data integrity, how seriously, you know, how much of a serious concern is that?  And then I wanted to ask you about the kind of inflation expectations.  We've talked a lot over many years with the IMF about the concern that, you know, the expectation that inflation is going to continue rising kind of creates an environment in which that happens.  We have not seen thus far massive impacts from the tariffs, but the tariffs are starting to bite.  So, I'm just curious how you see this unfolding inflation situation in the United States, particularly given the emphasis that we saw on affordability during the recent elections?

MS. KOZACK:  Anyone else on the U.S.?  All right, let me, let me -- let me go ahead with these questions.  Okay, so let me start with the bigger picture. 

Our view, I think, as we've articulated many times, is that the U.S. economy has proven to be resilient in the past few years.  We do now see strains starting to mount.  Domestic demand has been moderating, and job growth is slowing.  The combination of slowing immigration inflows, tariffs, broader policy uncertainty have been weighing on activity.  And in the October WEO, we anticipated what we call Q4-over-Q4 growth --  growth in the fourth quarter of 2025 relative to the fourth quarter of 2024 -- would slow from 2.5 percent, that Q4-over-Q4 from last year, to 1.9 percent in 2025.  Of course, those numbers did not take into account the extent of the shutdown.  And of course, the shutdown could affect these numbers. 

What we see with respect to the shutdown is that we expect that the likely growth outturn for the fourth quarter of 2025 will be lower probably than we had expected.  So there will be a negative impact on the fourth quarter.  It doesn't mean negative growth.  It will be a negative impact.  We do expect that there will probably be some reversal in the first quarter of 2026, consistent with what we've historically seen in the case of government shutdowns.  And of course, we're going to take all of this into account at the time of our next forecast. 

What I can also add is maybe turning to some of the other questions on the Article IV and data.  So, with respect to the questions on data, here I would just say, you know, like others, the lack of data has recently complicated our ability to assess the state of the U.S. economy and to undertake our preliminary work for the Article IV consultation. 

With respect to the Article IV, discussions were supposed to be held in November, but those discussions have been delayed, and we don't yet have a new date.  But of course, now that the government is on the cusp of reopening, we will, of course, be consulting with the U.S. authorities on the timeline, and we'll provide further information when we have it. 

With respect to Fed policy and inflation here, what I can say is that our assessment is that inflation is on a path toward the Fed's 2 percent target.  But as we've been saying, there are upside risks to inflation largely as a result of the tariffs. 

With respect to what the Fed is balancing, you know, we see the increasing risks to employment, which I just mentioned, in terms of job growth slowing.  And on the other hand, we have some upside risks to inflation that I just mentioned.  So, the Fed is appropriately -- has appropriately lowered the policy rate in recent months.  We see caution needed going forward as the Fed balances these two factors of sort of upside risks to inflation and downside risks to the job market.  So, policymakers will need to carefully calibrate future policy moves based on the trajectories that they see. 

And I think maybe with respect to your question on inflation expectations, generally, what we've seen is that inflation expectations in advanced economies, and that includes the U.S., have generally been well anchored.  So, yes, high episodes of increased inflation can, of course, lead in some cases to a de-anchoring of expectations, but that's not what we've seen in this recent inflation episode.  And in fact, some of the reasons why the increase, in the sharp increase in inflation that we saw, kind of during and immediately after the pandemic, and then the relatively quick decline in inflation reflected the action by Central Banks, the credibility that the Central Banks had, and, of course, that is kind of resulting in well-anchored inflation expectations.  So, for that, what we continue to see is that inflation expectations are well anchored. 

Now, of course, inflation coming back to target is different than the price level coming back to where it was before the pandemic, right?  Because inflation is the change in the rate of increase in prices.  So, what we see is that the price level overall has increased, and that, I think, is reflected, and that is causing pain for certain segments of -- of society.  And we see that relatively high level of prices is still with us.  And so, but that's distinct from well-anchored inflation expectations and the fact that inflation is, in our view, converging back to the Fed's target. 

Then, let me see, then we had some questions on AI and on crypto assets and stablecoins.  So maybe let me take the AI question.  So, look, on AI, we, at the IMF,  are looking at AI through the lens of how might it affect the macro economy.  And we have some analysis which shows that AI could have an impact on 40 percent of jobs globally.  It doesn't necessarily mean that that impact will be negative.  In some cases, job performance can be enhanced, and jobs can become more productive.  In other cases, you know, that may not transpire.  And we see also very strong investment in AI and technology, particularly in the United States.  And what we're seeing is that a lot of that investment is premised on the notion that AI is going to increase productivity growth.  And we also see that many of the firms in the tech sector, in particular, are quite profitable, and that's reflected in some of the stock valuations.  So, that is kind of the picture that we see overall for AI.

And then, of course, on crypto and stablecoins.  o I don't have a specific answer to your question on interest payments.  But what I can say is that digital assets and payments are driven by new technologies.  Some are in the form of unbacked crypto assets like Bitcoin.  Some are stablecoins.  Some are other tokenized assets.  Some are Central Bank digital currencies.  And all of this kind of new infrastructure around digital payments, this is a big technological transformation that could reshape the International Monetary System.  So, it's something that we are paying very close attention to at the IMF. 

Some of these digital assets offer the promise of more efficient payments, broader financial inclusion, and new instruments for cross-border transactions.  But at the same time, they do also introduce some risks.  Those risks are more acute in the case of unbacked crypto assets.  And the risks, of course, must be carefully managed.  And so, some of our work is really around assessing the potential risks and looking and working with our membership on how those risks can be best mitigated to ensure that the introduction of these new assets are consistent with macroeconomic and financial stability, that they're consistent with consumer and investor protection, and they're consistent with financial and market integrity. 

Let me -- did you have a follow up question? 

QUESTIONER:  It was about the G20. 

MS. KOZACK: G20.  Okay, let's take that one.  And then I want to go online.  I have a few online that I want to try to take before we wrap up.  So go ahead. 

QUESTIONER:  Hi, thanks again.  Just wanted to ask you about the upcoming G20, which is  weekend after this coming weekend.  The U.S. is boycotting this meeting.  And I'm just wondering, do you think that anything can be achieved without U.S. involvement here?  What sort of progress can you see on debt sustainability, on debt relief for poorer countries?  And what are perhaps the longer-term implications of the U.S. not participating here?  Could this cause some countries to pull away from the G20 process altogether, especially next year is the U.S. is assuming the G20 presidency?  So how does this group sort of recover from this?  Thanks. 

QUESTIONER:  Oh, and one quick follow up on Ukraine. Regarding sort of debt guarantees, whether or not sort of among G7 countries, if there's any consensus building yet towards sort of providing that guarantee for a new program for Ukraine for their debt?  Thanks. 

MS. KOZACK: Okay, so let me take on the G20. The G20 has been and continues to offer an important platform for governments to engage with international counterparts.  It also allows the international community to pool expertise to solve shared problems.  The U.S. did participate in the last Finance Ministers and Central Bank Governors Meeting in October.  This meeting, you asked about debt in particular, this meeting delivered a joint ministerial declaration on debt, which detailed the G20's commitments to address debt vulnerabilities.  So, this was an important outcome of that G20 meeting.  And we do expect going forward that the topic of debt will remain a priority under the upcoming U.S. G20 presidency.

On Ukraine, I think, all I can say on Ukraine is really to just emphasize that our team, as they will soon begin the mission, part of their work will be to -- has been and will continue to be to liaise with Ukraine's international partners to look for or to identify the appropriate financing, the appropriate financing vehicles to support Ukraine.  And very importantly from our perspective is that -- that financing will need to be on terms that is consistent with Ukraine's overall debt sustainability. 

Okay, let me go online. 

QUESTIONER:  Hi, Julie.  I have two questions on Sri Lanka. Sri Lanka's budget was recently introduced, and the government introduced a very ambitious target of 7 percent for 2026, which is quite high compared to the IMF target.  What is the IMF's assessment on this projection?  And at the same time, when can we expect the Executive Board to finalize the next tranche for Sri Lanka? 

MS. KOZACK: Okay.  Any other questions on Sri Lanka?  Okay, let me go ahead with these. 

Okay, so on Sri Lanka, on October 9th,  a little over a month ago, IMF staff and the Sri Lankan authorities reached a Staff-Level Arrangement on the Fifth Review of Sri Lanka's EFF arrangement with the Fund.  Once the review is approved by the IMF Executive Board, Sri Lanka will have access to about U.S. $347 million in financing.  We do expect the Board meeting to take place in the coming weeks. 

On your specific question on the budget and reforms, what I can say on the budget is that the staff are reviewing the published budget documents to evaluate whether the 2026 budget is in line with the program parameters.  And of course, this assessment will be an important part of the review that will be discussed by the Board in the coming weeks.

With respect to the structural reforms that will be key to lifting -- the structural reforms are going to be key for further increasing Sri Lanka's potential growth.  And let me highlight just a few areas where we think reforms are needed or should continue.  So, it's continuing efforts on liberalizing trade of facilitating related reforms, improving, and streamlining regulations around FDI.  Also, it's important to speed up the implementation of the governance reforms outlined in the government's action plan.  This includes procurement reform, strengthening the AML/CFT framework, among others.  And of course, finally, continuing to protect the vulnerable should be a priority going forward for Sri Lanka, and there's scope to deepen the Welfare Benefit Payments scheme.  So, those are some of the reforms that we'll be looking for to boost Sri Lanka's growth. 

Let me now continue online.  All on Egypt.  Please go ahead. 

QUESTIONER:  Hi, Julie.  As we expect an IMF Mission to start or initiate the negotiations regarding the Fifth and Sixth Review of the EFF program, as well as the First Review of the RSF.  Could you please give us an update on the time of the arrival of the mission to Cairo?  Thank you so much. 

QUESTIONER:  Hello.  Thank you for giving me the floor.   But actually, my question is not about Egypt.  It's about Syria.  I want to inquire about the President's Ahmed al-Sharaa visit to the IMF, whether you can give us an idea about what was being discussed?  What's the view of the IMF of the Syrian economy, and whether there is anything we should know about in the pipeline?  Thank you.

QUESTIONER:  Thanks, Julie.  I want to reiterate on the timing of the Egypt mission, and I'd also like to point out that there have been some reports that the IMF was looking for two requirements to be able to move forward with the Fifth and Sixth Reviews.  One of those is the $3.5 billion investment that has come through from Qatar this week, last week, rather.  And the second of those is reportedly an audit of governance of Egypt's state banks.  I wonder if you're able to comment on either of those two requirements and whether those are things that the IMF is actively looking at in order to be able to progress with the Fifth and Sixth Reviews?

QUESTIONER:  Hello, Julie.  Thanks for giving me the floor.  Actually, I wanted to ask you about the impact of the Qatari deal on the Egyptian economy.  And can this accelerate the Fifth and Sixth Review for the Egyptian program, and when do we expect it?  Thank you. 

MS. KOZACK: Okay, thank you.  Anyone else online on Egypt?  Or let me take Egypt, and then I'll come to you on Syria because I think we may have some others on Syria. 

Okay.  And I have a question also from the Press Center on Egypt, which I'll read out loud.  The Prime Minister said a date has been agreed for the IMF mission to complete the fifth and sixth reviews of Egypt's program.  Can you please clarify when the mission is expected to take place? 

Okay, so let me talk about Egypt and then we'll move to Syria.  So the mission for the Fifth and Sixth Reviews under the EFF and the First Review under the RSF is scheduled to take place in Cairo in early December.  And maybe just stepping back a little bit to say, as we've mentioned in the past, you know, the macroeconomic outlook in Egypt is improving, growth is strengthening, inflation has eased since the beginning of the year, and fiscal discipline is being preserved.  At the same time, Egypt does, of course, continue to face some vulnerabilities, including a low tax-to-GDP ratio, elevated debt, high gross financing needs, energy-related fiscal risks, and a continued strong state footprint in the economy. 

To provide forward-looking assurances in terms of the direction of policies, the authorities have made some recent efforts, and these include establishing a robust institutional framework around divestment of state assets.  They've moved ahead with the independent assessment of corporate and risk governance frameworks for state-owned banks.  And they're working to step up efforts on debt management as the financing outlook improves for Egypt.  And that's a compliment to the fiscal efforts that they're making. 

With respect to some of the other questions, particularly on the deal with Qatar, what I can say there is that the deal is a bilateral agreement between the Egyptian authorities and the Qatari authorities.  From our perspective at the IMF, there are a range of options for Egypt to increase foreign direct investment, including through divestment of stakes in state assets.  What's important under the program is that any of the proceeds from these divestments contribute to strengthening Egypt's international reserves and to reducing public debt.  And that is really to strengthen the overall economic stability and the environment for economic growth in Egypt, which, of course, is important to improve the livelihoods and the living standards of all of the Egyptian people. 

Let me now turn to Syria. I know you had a question, and then I think I have some online as well. 

QUESTIONER:  Hi, Julie.  Thank you.  I would like to know, after the President's visit here to the IMF headquarters and his meeting with MD Kristalina Georgieva, what will be the next step on the relationships between IMF and the country?  Would it be, for example, starting discussions of Article IV?  Because, of course, a program will be far away on that timeline, so this Article IV Consultation, a potential consultation, is something that the IMF is discussing with the country right now.  Is there a timeline on the next step, concrete next step on how the IMF can engage with the country?  Thank you. 

MS. KOZACK: All right, let me talk about Syria for a bit. 

At the IMF, we're very committed to supporting Syria in its recovery efforts.  Syria will need substantial international assistance to rehabilitate the economy, to meet urgent humanitarian needs, and to rebuild essential institutions and infrastructure.  And this not only takes the form of concessional financial support, but Syria also will need extensive capacity development assistance. 

As noted, the Managing Director met last week with Syrian President al-Sharaa here in Washington.  Their conversation focused on Syria's economic challenges and opportunities, and it also focused on how the IMF can continue to support Syria and the rehabilitation of the Syrian economy.  The conversation focused, and our focus right now, is on really policy advice that we can provide to Syria, and also very importantly, capacity development and technical assistance, assistance aimed at rebuilding Syria's economic institutions. 

I can also say that this week we have an IMF mission.  We had an IMF mission in Damascus.  It was there to discuss the authorities' economic reform priorities and their technical assistance needs for the period ahead.  And here, we're focused very much on strengthening capacity in the Finance Ministry and in the Central Bank and the Statistical Commission. 

With respect to next steps, the next step would be how to pave the way for an eventual Article IV Consultation.  There's been a 15-year halt in Article IV Consultations, so that's since 2009, essentially.  And so, we will need to be working with the authorities on a pathway to undertaking the Article IV.  And of course, that will be part of our discussions as well.  And in the meantime, we continue to assist Syria as much as possible, as I said, with policy advice and capacity development in the areas of our focus. 

QUESTIONER:  Sorry, Julie. 

MS. KOZACK: Yeah?

QUESTIONER:  Is the mission still ongoing in Damascus? 

MS. KOZACK: What I can say is the mission visited Damascus this week. 

QUESTIONER:  This week, okay.

MS. KOZACK: You will be the last question. 

QUESTIONER:  About Jamaica following the Hurricane Melissa, what sort of economic impact -- has the IMF undertaken any study regarding the impact of Hurricane Melissa on -- (connection difficulties) What role, if any, the IMF would be playing?  (connection difficulties) -- it said to be in the economic landscape. 

MS. KOZACK: So you broke up a lot during the question.  I heard the question about Jamaica and the hurricane, and the role of the IMF.  So, I'm going to answer that question.  If there were other questions, I didn't hear them.  So, we will -- we will get back to you bilaterally if there was something beyond Jamaica. 

So first let me start by expressing on behalf of the IMF our deepest condolences to the countries affected by Hurricane Melissa and in particular the people of Jamaica and Haiti, the two most heavily impacted economies.  We are closely monitoring developments, and we're working with the country authorities, other international institutions, and partners, and of course, we stand ready to, you know, assist these countries, any country affected by the hurricane. 

In terms of Jamaica specifically, we are in touch with the authorities.  Our preliminary assessment, based on our discussions with the authorities and our deep knowledge of Jamaica, is that Jamaica has buffers to finance the immediate disaster-related spending needs.  Jamaica has a strong fiscal and external position, a very sound policy framework, and it has established a comprehensive multi-layered risk financing framework that comprises both domestic and external instruments.  So that -- that risk management framework has allowed Jamaica to build contingent buffers should a disaster like Hurricane Melissa hit the country.  And so those buffers are now being activated. 

We're in close dialogue with the authorities, as I said.  They have not expressed interest in Fund financial support, but, of course, we stand ready to assist them in any way that they see fit, whether it be policy advice, any technical assistance, liaising with international partners, looking at the macro-framework, or, of course, should they request it, Fund financial support. 

So, I'm going to bring the press briefing to a -- You wanted to come in. 

QUESTIONER:  Just a point of clarification on the delay in the U.S. Article IV.  Is that solely related to the government shutdown and lack of data, or are there other factors? 

MS. KOZACK: It's related to the shutdown. So, initially it was agreed that the Article IV would take place in November.  Because of the shutdown the Article is delayed.  And part of the reason of the delay is that before the Article mission actually takes place, there's quite a lot of preparatory work that takes place in terms of, you know, gathering information, data, and information that goes beyond data -- about policy intentions and policies that have been undertaken and things like this.  So, none of that preparatory work, of course, could take place during the shutdown.  So, for that reason, the Article IV is delayed.  And of course, we'll come back to you once we have more details on the precise timing. 

So, I'm going to bring the press briefing to a close.  But I do realize that in answering the questions on the U.S., there were one or two questions on spillovers.  So let me quickly answer that, and then I will bring the press briefing to a close. 

So, in terms of spillovers, I mean, right now, you know, what we see in the global economy is continued resilience, generally speaking.  So, we don't observe at the moment any major spillovers from the U.S. shutdown.  All of that said, the U.S., of course, is the largest economy in the world, and to the extent that there is that growth in the U.S. is affected, that could, of course, have some effect on other countries.  But we don't at this moment, expect major spillovers from the shutdown.  We will be assessing it as part of our January WEO, where we will take a snapshot of the global economy as we head into 2026. 

So, with that, let me conclude this press briefing.  Thank you all for participating today.  I apologize again for the delayed start due to our technical difficulties. 

As a reminder, the briefing is embargoed until 11:00 a.m. Eastern Time in the United States.  A transcript, as always, will be made available later on IMF.org. And if we did not have the time to get to any of your questions, please do reach out to the media team, media@imf.org, or via the Press Center, and we will follow up with you bilaterally. 

I wish you all a wonderful day, and I look forward to seeing you again next time.  Thank you very much. 

 

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