Transcript

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 great to see you all here in person and those of you joining online.  I'm Julie Kozack, Director of the Communications Department of the IMF.  As usual, this Press Briefing is embargoed until 11:00 a.m. Eastern Time in the United States.

I'm going to start with a few announcements, and then I'll move to taking your questions in person, on Webex, and via the Press Center.  And I have quite a few announcements, so please do bear with me. 

First, the Managing Director will visit China next week.  On December 8th, she will participate in the opening ceremony of the IMF Shanghai Center.  She will then travel to Beijing, where she will attend the China “1+10” dialogue on December 9th.  And on December 10th, she will speak at the 2025 China Article IV press conference.  While in Beijing, she will also meet with senior Chinese officials. 

The Managing Director and First Deputy Managing Director Katz will have a brief stop in London on December 12th to discuss coordination with the Financial Stability Board and the Bank for International Settlements, the BIS. 

On December 14th to 15th, the Managing Director will be in Rome to attend the 18th Ambassadors Conference organized by Italy's Ministry of Foreign Affairs and International Cooperation. 

Turning to the First Deputy Managing Director.  FDMD Katz is in Asia this week.  This included Article IV discussions in China earlier this week, and he is currently in Japan until tomorrow, where he's having bilateral meetings with the authorities and other counterparts. 

Deputy Managing Director Nigel Clark is visiting Ethiopia this week to discuss how the IMF can deepen its support for the country's reform agenda. 

Deputy Managing Director Bo Li will be in Doha, Qatar, on December 6th and 7th to participate in the Doha Forum and engage with stakeholders, including students and academics. 

This morning, the IMF released a new departmental paper, entitled “Understanding Stablecoins.”  The paper gives an overview of stablecoins, including market developments, use cases, potential benefits, and associated risks, as well as the international regulatory landscape.  The IMF and FSB have issued comprehensive policy recommendations on stablecoins.

And with that, 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, the floor is now open. 

QUESTIONER: Thank you, Julie. In your announcement of a Staff–Level Agreement with Ukraine, the IMF emphasized the importance of adopting the 2026 budget in Ukraine, consistent with the IMF's program's objectives.  Could you clarify, please,  what specific measures the IMF expects to see in Ukraine's new budget?  And also, should passing this budget be a prerequisite for launching the new EFF arrangement?  And secondly, do you have a date when the IMF Executive Board meeting on Ukraine is scheduled?  Thank you. 

MS. KOZACK: Okay. Any other questions on Ukraine?

QUESTIONER: Thank you, Julie.  I would like to know what is the IMF expectations on the use [inaudible] of Russia's frozen assets in late December?  The outlook seems to be grim, and this is crucial for a new program for Ukraine. Do you remain positive, see any risk? 

And if I may, also the Staff–Level Agreement mentioned prior actions that Ukraine has to do.  I would like to know if you could specify, does the GDP warrants negotiations with private holders of this asset.  Is the deal considered a prior action for this new program with Ukraine?  Thank you so much. 

MS. KOZACK: Okay.

QUESTIONER: Thank you so much, Julie.  I just want to ask you about the corruption issue that's been in the news as far as Ukraine goes, and the changes in government and some of the crackdowns.  And so, I just wonder if you can say a word generally about your involvement and perspective on that, and to what extent the Ukrainian government has been briefing the IMF in these consultations, and what your level of confidence is that these issues are now being addressed after all these years of saying they should be. 

MS. KOZACK: Okay, very good. And I think I have a question online.

QUESTIONER: Thanks, Julie.  Similar to this question on Ukraine, I wanted to ask if the new IMF program entails a need for sovereign restructuring?

MS. KOZACK: Anyone else want to come in on Ukraine?

QUESTIONER: The amount and timeline of the new IMF loan program for Ukraine is comparable to the volume of Ukraine's payments during the next three years.  Does it mean that the IMF is issuing a new loan to give for the purpose of giving Ukraine the opportunity to meet its obligations to the Fund? 

And my second question, if I may, is in light of the corruption scandal that people here have already mentioned, does the IMF plan to introduce any other measures of control to ensure that the funds that have already been provided to Ukraine, you know, that there is no risk of embezzlement? 

MS. KOZACK: If nothing else on Ukraine, let me go ahead and start with this wide range of questions.

Okay.  So just to remind everyone where we are on Ukraine.  On November 26, IMF Staff and the Ukrainian authorities reached a Staff–Level Agreement on a new four-year EFF arrangement with potential access of U.S. $8.1 billion.  The program does remain subject to completion of the prior actions, receipt of adequate financing assurances from donors, and, of course, approval by the IMF's Executive Board. 

The authorities have signaled that they remain committed to the reform agenda, and this includes domestic revenue mobilization, tackling economic informality, safeguarding independent anti-corruption institutions, and debt restructuring to restore sustainability. 

The National Bank of Ukraine is committed to lowering inflation while allowing greater exchange rate flexibility to absorb shocks and maintain adequate FX reserves. 

In terms of financing, the program is expected to catalyze large-scale external support to help close or to fully close Ukraine's financing gaps.  The size of the financing gaps, which I know has been a topic of some discussion here or questions, we estimate the size of the financing gap during the duration of the program to be U.S. $136.5 billion.  That's over the duration of the program.  For 2026 in particular, we estimate, or 2026 into 2027 a bit, we estimate the financing gap, a residual financing gap of $63 billion.  So, our message is that prompt action by donors is indispensable to assist Ukraine in financing its large fiscal and external financing needs and to avoid liquidity strains during the continuing war.

With respect to some of the more specific questions on anti-corruption.  What we've seen is that the recent developments in Ukraine underscore once again the importance of resolutely tackling corruption in Ukraine, improving governance, and continuing to reform state-owned enterprises.  As we've said in the past, Ukraine needs a robust anti-corruption architecture that will help level the playing field in Ukraine. It will help safeguard public resources; it will improve the business climate, and that will also help Ukraine ultimately attract private investment.  It's a central piece.  These anti-corruption reforms are a central piece of reform for the donor community at large as Ukraine seeks their support for critical repairs and post-war reconstruction, ultimately.

With respect to the new program, the authorities, as I noted, reiterated their strong commitment to preserving an adequately resourced and independent anti-corruption set of institutions.  They also agreed to continue reforms to tax and customs services, including by appointing a new customs head and improving IT systems to boost efficiency and to work to rebuild public trust, raise revenues, and support, ultimately, the reconstruction that Ukraine will need.  And on the SOE side, the authorities have committed to improving financial planning, reporting, and auditing, as well as reforming nomination procedures for state-owned enterprises and state-owned banks. 

On the budget.  Enactment of the 2026 budget was one of the prior actions that was agreed with the authorities.  The team is currently assessing the full text of the budget, but the preliminary assessment is that it's broadly in line with the program commitments. 

On some of the questions on the GDP warrants, what I can say at the moment on the restructuring of the GDP warrants  is we've taken note of the Ukrainian authority's offer that they made to warrant holders on December 1st.  We're closely monitoring the response, and we're also analyzing the proposed terms of the offer.  And, as always, any debt restructuring agreement will be assessed in the context of ensuring debt sustainability and, of course, ensuring adequate financing or the financing assurances that Ukraine will need as part of the program. 

With respect to the question on the prior actions and what some of them are, I can provide some information here.  In addition to the budget, which I just mentioned, some other areas include a tax base, broadening the tax base by enacting legislation to tax income that is earned through digital platforms, closing customs loopholes for consumer goods imports, and removing exemptions for VAT registration.  Agreement was also reached on measures to tackle economic informality, including by increasing competition in public procurement and addressing loopholes in the current labor code. 

And then maybe, let's see, finally, on the question on the Russian assets.  Here, what I can say is that we do welcome the rigorous discussions in Europe to support Ukraine and the goal to do so in a manner that is consistent with restoring Ukraine's debt sustainability.  We're closely following these discussions, of course, including options that would involve using Euroclear's cash balances, generated by Russia's immobilized assets, while preserving Russia's underlying claim. 

And just a reminder, IMF Staff and management have consistently advised that any action relating to the use of Russia's immobilized assets should respect international and domestic law and not undermine the functioning of the International Monetary System.  And we're assured that [Russian] European policymakers appreciate these important considerations. 

And then maybe just finally on the question of the program financing, just to reiterate that IMF resources are intended to provide balance of payments support to help restore growth, and they're not directly linked to any repayment of any outstanding debts.  They're there to support the overall balance of payments. 

QUESTIONER: Thank you very much.  Good morning. 

MS. KOZACK: Good morning to you.

QUESTIONER: Nice to see you.  Good morning, colleagues.    Two questions.  One for Senegal.  Again, many Senegalese citizens are expressing concern about the slow pace in finalizing the new program.  Could you please clarify the main factors behind this delay?  Additionally, some stakeholders are advocating for debt restructuring or even a possible cancellation, citing shared responsibility between previous authorities and the lack of vigilance of the IMF that allowed the hidden debt to accumulate.  So how does your institution respond to these concerns?  That's the first question.

The second one is concerning Guinea-Bissau.  Since October 2025, the IMF already noted that there is something -- performance remaining mixed, partly due to the difficult socio-political context.  Until very recently, the country, despite its fragility, was cooperating with the IMF within the framework of an economic support program with hope of achieving a macroeconomic recovery.  But with the coup, with  so-called coup, questions are always asked nowadays, instability complicates reform implementation, and may further weaken the credibility of the IMF program and economic recovery.  So, what is the IMF position in that matter?  Thank you. 

MS. KOZACK: Before I answer, do we have any other questions on Senegal or Guinea-Bissau?

QUESTIONER: Just two quick questions on Senegal.  Indeed, one about the debt.  Does the IMF consider right now having a fair assessment about the debt ratio from Senegal?  And the second question about restructuring.  We've heard that the Prime Minister in Senegal have pointed out that they are not willing to restructure debt.  What is the position of IMF about that?  And does it - could it have an impact on the possibility of having a program in the coming months?  Thank you. 

MS. KOZACK: Okay, very good.

QUESTIONER: Thank you, Julie.  On Senegal, the Finance Minister told parliament last week that Senegal needs to secure around 6,000 billion CFA francs annually, more than 10 billion on average, to meet its financing needs, and that the IMF believe that country cannot guarantee this over the debt sustainability horizon.  He also said that the government is continuing to pursue active debt management operations, including efforts to replace existing debt with more acceptable terms and longer maturities, which he says could free up more than 500 billion CFA francs in budgetary space for 2025.  Does this imply that a judgment has already been made in the IMF's DSA analysis after the mission?  And could this operation mean that Senegal is already in debt distress?  Thank you. 

MS. KOZACK: Okay, any other questions on Senegal? \Are there any questions on Senegal online?  Okay.  If not, let me go ahead. 

So just stepping back.  An IMF team was in Senegal on a mission which wrapped up on November 6th.  To give the background, that mission advanced talks with the Senegalese authorities on their new program request.  Discussions covered the recent macroeconomic trends in Senegal, policy priorities, and negotiations are continuing with an aim of finalizing the IMF-supported program and agreeing on medium-term outcomes.  So, that's kind of where we are with -- with discussions ongoing. 

Now with respect to the specific questions, I think  to your question, you know, we do appreciate, of course, that there are some questions about, you know, the pace of discussions.  What I can say is that the IMF and the Senegalese authorities have made significant progress toward an agreement on a new program that addresses the current challenges that Senegal faces.  Following the recent mission, the IMF and the Senegalese authorities are working intensively on the design of the new program and the measures that will be needed to address the root causes of the -- of the hidden debt. 

On your question about -- on your other question on the hidden debt more specifically.  First, I want to once again commend the authorities for their commitment to transparency in disclosing the previously undisclosed, previously unreported debt liabilities, as well as for the significant steps that they have taken to strengthen fiscal governance and data integrity. 

For our part at the IMF, we recognize the importance of learning from this experience.  We are conducting an internal review to understand how these discrepancies went undetected and also to reinforce safeguards in our own processes.  That review is focusing on three areas.  The first is to examine our data integrity frameworks.  The second is to strengthen our internal review processes to improve detection of anomalies that may arise.  And the third is to enhance our internal training of staff, to make sure that staff have the training necessary to also improve in this area.  As this work progresses, this internal review progresses, our priority, of course, remains to support Senegal's reform agenda.  And this includes the request for the new program and the discussions that are underway. 

And then on the question on debt restructuring, what I can say is that we do recognize concerns that have been raised by some of the stakeholders of Senegal's debt.  During the recent Staff visit, just to remind, staff and the authorities, of course, discussed the significant debt vulnerabilities that Senegal faces.  Total public debt is estimated at 132 percent of GDP at end-2024.  And so, of course, those discussions that the IMF staff and the Senegalese authorities have had included options for how to address the challenges arising from the high level of public debt.  And this is, of course, what our role is at the IMF, to provide expert analysis and also to provide advice for the authorities to consider.  But once again, the nature and the choice of specific debt operations, whether to seek a restructuring for obligations, does remain, you know, a sovereign decision for Senegal. 

And then, turning to the question on Guinea-Bissau.  What I can share at this stage is that the IMF has an ongoing program with Guinea-Bissau.  In early October, staff and the Guinea-Bissau authorities reached a Staff–Level Agreement on economic policies that could support the ninth review under the ECF arrangement.  In light of recent developments, we are monitoring the situation in Guinea-Bissau, and of course, we'll provide an update on the next steps as more information and details become available. 

QUESTIONER: Thank you, Julie.  Does the IMF consider the swap that Argentina signed with the United States as part of the Central Bank's net international reserves?

MS. KOZACK: I assume there's other questions on Argentina.  

QUESTIONER: Hi, Julie.  Good morning.  Have you -- about the target of the reserves of Argentina, have you already considered the possibility of a waiver by the end of the year?  And if so, have you discussed that with the Argentine authorities? 

And the other one is that yesterday Minister Caputo spoke about the alternatives, the government is considering to cover the payment in January.  Is the IMF concerned that this could affect the level of the reserves?  Thank you.

MS. KOZACK: Other questions on Argentina? Okay, let me go online.   

QUESTIONER: Hi, Julie, how are you?  Thank you for taking my question. 

MS. KOZACK: Of course. Good morning.

QUESTIONER: With the issue of the reserves, yesterday the Economy Minister said that the government intends to purchase reserves that dismiss the need for a reserve accumulation target.  I would like to know if the IMF agree with this because it changes the current program.  Thank you. 

QUESTIONER: Hello, Julie.  Thank you for taking my question.  First of all, I would like to know if there's a date set for the next review.  If it's going to take place next year, I assume this is the last time we're getting a conference in 2025.  And also, regarding the previous question, the government said that if they get access to financial markets, they don't need to accumulate reserves.  And so, is that the death of the reserve target? 

MS. KOZACK: Okay, thanks.

QUESTIONER: Yes, Julie.  Thank you for taking my question.    So, as my colleagues said, Argentina has failed to accumulate reserves in the elections at the end of October.  More than 4 billion bonds are expiring January.  So, is the IMF concerned about whether Argentina will be able to repay the expiring bonds with its available resources?  Thank you. 

MS. KOZACK: Okay, thank you. Any other questions on Argentina?  No?  Okay.  All right, let me aim to answer these questions. 

So let me start with how we assess the situation in Argentina.  As we've mentioned earlier and spoken here many times, you know, substantial progress continues to be made in strengthening macroeconomic stability in Argentina, despite some occasional bouts of volatility.  From our perspective, continued reform efforts on the macroeconomic and structural fronts would help sustain and expand the gains that have already been made, particularly with respect to the reduction in inflation, the reduction in poverty, and, of course, the fact that growth is resuming – our estimate is 4.5% this year. Some additional reforms would help sustain these gains that have been made. 

What specifically do we mean here?  So first, monetary and FX policies will need to support a more ambitious reserve accumulation path to build adequate buffers in Argentina.  This will help Argentina better address shocks, and it will also help facilitate a timely re-access to international capital markets.  Reforms could also -- we advocate also, for reforms aimed at improving the efficiency and equity of Argentina's tax system, along with continued spending controls and reforms, including on subsidies.  And this would help further strengthen the fiscal anchor, which has been very important for Argentina's return to macro stability.  Creating a more market-based and resilient economy in Argentina will also require continued reforms on the deregulation front, as well as efforts to improve the functioning and flexibility of markets, including the labor market.  In all of these efforts and all of these reform areas, building consensus in favor of these reforms remains critical, including to facilitate passage of any legislation that may be required. 

Now, with respect to some of the more specific questions, especially on international reserves.  Here, what I can say is that at this stage, meeting the end-of-year reserve target will be challenging.  Nonetheless, it remains essential for the authorities to make a concerted effort in the period ahead to rebuild international reserves.  And again, that -- the reason why we're advocating stronger reserves is to strengthen the macroeconomic stability that has already been achieved and also to strengthen Argentina's overall resilience to shocks.  We continue to advocate that the authorities should use the window of opportunity to implement a consistent and robust monetary and FX framework to help support the accumulation of reserves. 

On the specific question regarding a waiver, I'm not going to speculate at this stage.  That will be considered as part of discussions for the next review.

And in terms of timing for the next mission.  Right now, under the program, what we call the test date, or the date at which we're going to be assessing the next set of targets, is end-December.  And typically,  the way that we work at the IMF is the mission would take place after the test date because that would allow the team to discuss with the authorities progress made toward meeting the various targets.  And at this stage, we haven't yet set mission dates, but they would occur certainly after the end of December.  And we'll provide more information to you when we have it when it's available. 

There was a question on the swap line and its inclusion in reserves or net international reserves.  Here, what I can say is that we do have a framework at the IMF for looking at how to treat instruments of this type.  And we will, of course, be applying that framework to the swap line for Argentina.  But that will be something that the team will be -- that we will be -- that we will show when we publish the next Staff Report, what exactly that treatment is going to be.  It will need to assess the details of the swap line against our own framework.  So, we will have more information of that in the period ahead. 

All right.      

QUESTIONER: Thank you very much, Julie.  My question is on Japan.  First question is on the supplemental budget, which Prime Minister Takaichi announced recently.  Her supplemental budget regarding size is quite big.  And what is your analysis on that point?  Could it be a targeted  one which IMF has recommended again and again and again?  And my second question is BOJ monetary policy.   Governor Kuroda [Ueda] made clear that they are considering rate hikes next meeting, that is on the 19th next week.  And what is your recommendation at the moment, given the inflationary pressure in Japan?  Thank you very much. 

MS. KOZACK: Thanks very much. All right.  Maybe just stepping back to give a sense of where -- how we see the Japanese economy, and then I'll get into the specific questions on fiscal and monetary policy. 

Just to say that for this year, we do expect growth to strengthen, and we expect inflation to converge to the Bank of Japan's 2 percent target by 2027.  We expect growth to accelerate from 0.1 percent in 2024 to 1.1 percent in 2025.  Growth will be supported by strong domestic and external demand.  And we see a real wage growth as supportive of consumption in Japan. 

On your specific question  about fiscal policy.  So, on November 20th, Japan's government announced a new fiscal package.  And the cabinet finalized their proposed supplementary budget on November 28th.  The final budget law will now need to be passed in the Diet in Japan.  But for now, what I can say is the following.  The overall size of the fiscal package --we assess it to be smaller than what market analysts had been expecting based on their preliminary assessment, and therefore, the impact of the fiscal package on next year's deficit, fiscal deficit will be a bit smaller than the announced size.  We are encouraged to see that some of the more fiscally burdensome proposals that had been discussed were not included in the package.  And what we have seen so far in Japan on the fiscal side is that the fiscal deficit has been steadily declining, and that has helped, along with strong GDP growth, to a steady decline in Japan's debt-to-GDP ratio. 

So, in the near term, we do expect Japan's debt dynamics to remain favorable.  And this fiscal package does not change our view that the debt-to-GDP ratio will be on a declining path next year.  Over the medium-term, of course, you know, we have been emphasizing that Japan does face some longer-term spending pressures, including from higher interest payments, spending pressures related to aging, and some spending pressures related to defense spending. 

And then on your question on Bank of Japan policy, what I can say is that we have been supportive of the Bank of Japan's recent monetary policy decisions.  Monetary policy does still remain appropriately accommodative.  But Japan, like many countries, is still operating in an environment of high uncertainty, and that underscores the need for the Bank of Japan to continue its flexible and data-dependent approach. 

All right, I think we had a question here in the room, and then we'll go online for a bit. 

QUESTIONER: Good morning.  Thank you for taking my question.  Just a couple on Egypt.  The Prime Minister yesterday  said that the country is updating its state ownership policy document and that President el-Sisi has approved a second package of tax incentives.  Does the IMF see these reforms as satisfactory, and can it provide an update on some of the other key reforms being discussed this week as part of the Fifth and Sixth EFF Reviews?  Thank you. 

MS. KOZACK: Okay. Any other questions on Egypt? And then I know I have a few online. 

QUESTIONER: Sorry, just a quick follow-up.  The PM said that Egypt had met the targets and maybe even exceeded them.  I know there's a mission right now in the country, but it's not clear where he's getting that from since there haven't been much advances on the asset sales relating to state-owned entities.  If there's anything out there that you could provide on that side that will be helpful.  Thank you so much. 

MS. KOZACK: Okay, and let's go online on Egypt.     

QUESTIONER: Thank you, Julie, for taking my question.  I just want you to give us an update on the ongoing discussions regarding the IMF mission, which starts its work in Egypt for the Fifth and Sixth Reviews of the EFF, and also the First Review of the RSF.  And when can we expect the full completion of the three reviews?  Is it expected this year or early next year?  Thank you, Julie. 

MS. KOZACK: Okay, thank you. Any other questions on Egypt? Okay.  And I see I have one question that came in from the Press Center.  I will read it out loud.

The question is "What are the latest updates regarding the International Monetary Fund's mission that started its work recently in Egypt to conduct the Fifth and Sixth Review of the Egyptian economic reform program?"

Okay.  So, on Egypt, what I can share with you is we do have a mission on the ground in Cairo.  That mission is in Egypt to discuss the Fifth and Sixth Reviews under the EFF and the First Review of the RSF.  Discussions are focused on reforms to help the authorities achieve their objectives, to stabilize the economy, and build a stronger economic path forward that will benefit all Egyptians.  Right now, many of the topics that you've been asking about are all under discussion as part of the mission.  So, I'm going to leave it at that on Egypt for now, only to say that we will communicate at the end of the mission, the mission will communicate its findings, and we will take the work forward from there.

QUESTIONER: Can you just give the dates? 

MS. KOZACK: The dates of the mission? I don't have them right here, but we can come back to -- to everyone on the specific dates. I don't think I have anything here on the specific dates.  No.  But I will come back to you with the specific dates. 

Okay.   

QUESTIONER: Thanks, Julie.  I wanted to ask about China and the mission there, but then also on the U.S.  So, let me just on China, so the Article IV that's going on now, can you just give us perhaps a little preview of what, you know, what you're seeing in terms of China and the impact of the tariffs that have occurred, which are not as high as expected?  And whether, you know, this sort of rapprochement that's happened with the U.S. and China, tenuous as it may be, that it, you know, whether it's sort of helping calm things?  Because we've seen some interesting developments in terms of the Chinese economy.  Do you want the U.S. question? 

MS. KOZACK: Yep. You might as well go ahead. 

QUESTIONER: Okay.  And then on the U.S. front, the again, you know, sort of looking at the tariff actions, you know, we are now ending, getting close to the end of one year of this trade war and the revision of things.  Where do you see the effective tariff rate for the United States landing at the end of this year, with the sort of, you know, kind of there and back again kind of motion that we've seen where tariffs are raised and then lowered?  And are you doing any assessing about the impact of the Supreme Court, the anticipated Supreme Court decision?  What would that be?  Thanks. 

MS. KOZACK: Okay, thanks. So, before I answer, are there any other questions on either China or the US.?  Online?  No?  Okay. 

So, on China, yes, our team is currently in China conducting the 2025 Article IV Consultation.  As you know, this is our annual assessment of each member's economy, in this case, China.  The mission began on December 1st.  It will conclude on December 10th.  We will present our preliminary findings at a press conference on December 10th, and the Managing Director will participate in that press conference, as I announced at the opening. 

So, beyond that, there's really, you know, not much I can share, given that I want to, you know, give space for the team to do its work and to have the thorough discussions with the Chinese authorities.  But, as I said, we will be communicating in detail at the end of the mission, both with the press release and also the press conference attended by the Managing Director.

On the U.S. --

QUESTIONER: Wait.

MS. KOZACK: Yes?

QUESITONER: Are you heartened by what you've seen in terms of the U.S.-China, and in terms of assessing the impact on the Chinese economy of the tariff and trade restrictions? 

MS. KOZACK: Yeah. I mean, look, what I can say, and I think we've been saying it for some time, is we have been encouraging throughout this entire period for countries to engage in dialogue, to try to resolve their trade differences.  And so, we're encouraging countries to do that.  And of course, we're encouraged that the U.S. and China have been engaging in substantive discussions to find a path to resolving the trade tensions that they've had. 

On the specific question on the U.S., so you asked about what is our latest assessment of the effective tariff rate.  So we -- what I can say right now is that we look at two measures of the tariff rate in the U.S.  One is kind of the statutory rate, which is, you know, what is actually the rate that's announced and applied.  And then we look at another measure where we look at, in a sense, what is the amount of tariff revenue collected relative to imports.  And that gives a different measure because sometimes there are exemptions, there are postponements.  So, we look at both measures. 

So, the latest calculation that we have is that the statutory rate, we estimate it to be right now between 16 and 18 percent.  And what we're calling the effective rate, which is this, looking at the revenue that's collected, we're calculating it at around 10 percent.  That's the latest that we have.  It's not very different from what we talked about around the time of the Annual Meetings.  But the team is trying to keep on top of the various announcements and to adjust the calculation as they go along. 

QUESTIONER: Do you have a date yet for the Article IV for the U.S.? 

MS. KOZACK: For the Article IV, we don't have a specific date, but we expect that it will take place in the first quarter of 2026.

QUESTIONER: Because of the shutdown still?

MS. KOZACK: The reason for the delay was related to the shutdown. And of course, the precise dates of any Article IV are agreed and discussed with the authorities.  And so that's happening also in the case of the U.S. 

Let me go online because we are a little bit over time. Why don't the two of you come in?  I understand you have questions on Sri Lanka. 

QUESTIONER: Good morning, colleagues, and good morning, Julie.   I got a couple of questions on Sri Lanka.  Last week, Sri Lanka was devastated by a cyclone, and the rescue operations are still ongoing.  Will there be any flexibility in timelines for the structural reforms, given the urgent need for disaster recovery right now and for reconstruction?  And at the same time, does the IMF foresee any changes in Sri Lanka's debt position?  And also, is the IMF going to be revisiting growth projections and reform priorities in light of the cyclone's economic disruption?  Thank you. 

QUESTIONER: And my question is, how can the IMF give special consideration to Sri Lanka in the current devastating situation?  Is there any possibility of easing the conditions of Sri Lanka's IMF program?  And my last question, do you expect any revisions to the current growth forecast for Sri Lanka's economy?  Thank you. 

MS. KOZACK: Thank you. Are there any other questions on Sri Lanka?  Okay, let me talk about Sri Lanka a little bit. 

And I really want to start by saying that, you know, by conveying our deepest sympathies to the people of Sri Lanka for the effects of the devastating cyclone.  Our hearts go out to the people of Sri Lanka, and we mourn the loss of life that has taken place.  And I want to extend those condolences to the people of Indonesia, Malaysia, Thailand, and Vietnam as well also in Asia, where there have been very significant flooding and often loss of life.  So our deepest condolences to the people of all of those countries. 

On Sri Lanka, on the specific questions, what I can say is that, you know, we're closely engaging with the Sri Lankan authorities, development partners, and other counterparts to assess the humanitarian, social, and economic toll of the cyclone.  We understand that large parts of Sri Lanka have been affected by the floods, and on that basis, we do expect economic activity to be adversely affected, in addition, of course, to the significant human toll that the cyclone has taken.  We will be able to -- we will have a better assessment of the economic situation once the rapid post-disaster damage assessment is completed.  And of course, that's being completed by the Sri Lankan authorities in conjunction with other partners. 

With respect to the IMF, we are continuing to support Sri Lanka's recovery, reform, and resilience under the EFF arrangement.  Staff and the Sri Lankan authorities reached a Staff–Level Agreement on the Fifth Review back in October, before the cyclone.  And right now, Staff is looking into options to further support Sri Lanka in the recovery process.  We still expect to have a Board meeting on December 15th.  But as I said, we are looking into options to further support Sri Lanka, and we will be providing additional details as the assessment of economic needs and damages moves forward, and as we have more information that can inform our own thinking around the options for how we can further support Sri Lanka. 

Okay, let's go to you. 

QUESTIONER: Hi, good morning.  I have a question specifically centered around Jamaica.  I know recently the IMF indicated that it is going to -- Jamaica requested assistance under the large natural disaster window.  But it is basically saying -- which could amount to a loan of up to $450 million.  Can you just give us a little bit more insight into this and whether the IMF would have undertaken any sort of economic review of the impact on Jamaica, and how this quote-unquote loan will fit into that economic position of the territory?  Thanks. 

MS. KOZACK: Okay, thanks. Let me again express my condolences to the people of Jamaica for the devastating hurricane and express our support to the people of Jamaica as they work to recover and rebuild after Hurricane Melissa. 

As you noted,  Jamaica has requested support from the IMF under the large natural disaster window of our rapid financing instrument.  And that could amount to a loan of up to $415 million.  What I can also add is there is something called a global rapid post-disaster damage estimation or GRADE , that work is being led by the World Bank in collaboration with the Inter-American Development Bank.  Those are some of our partners.  And that assessment estimates that the physical damage to Jamaica could amount to U.S. $8.8 billion, which is 41 percent of Jamaica's GDP.  It makes Hurricane Melissa the costliest hurricane in Jamaica's recorded history.  The authorities in Jamaica are continuing to assess the damage, and relief and recovery efforts are underway. 

I want to clarify that the rapid financing instrument that Jamaica requested is meant to be exactly this, a rapid financing instrument.  So, Jamaica is eligible to access this emergency financing.  As I said, the amount is about, is up to U.S. $415 million.  And because it is an emergency instrument, there's no conditionality associated with the RFI, as we call it.  Our team is working closely with the authorities, and we're aiming to seek Executive Board approval for the RFI early next year.  It comes in one single disbursement.  So, once the Executive Board approves, the disbursement would be made, and it would come as one disbursement. 

And as we announced recently, we are coordinating closely with development partners and, of course, the Jamaican authorities.  There was a joint discussion with other development partners and the Prime Minister of Jamaica just a few days ago, and we are working with other development partners to assemble a comprehensive package of up to U.S. $6.7 billion over three years to help strengthen Jamaica's recovery and reconstruction.  And I would refer you to the joint press release that was issued on December 1st. 

I think I have one more person online.  And then, did you have a follow-up on Jamaica?  No.  I have one more person online. 

And so, we'll take that question, and then I'll take  the last question of this Press Conference.  So,  please go ahead. 

QUESTIONER: Thanks, Julie.  My question is about Lebanon.  There's been some reports that the government has presented a new financial gap draft law to the IMF.  Has that law been assessed by the Fund's Staff?  And will the IMF be able to grant Staff–Level Agreement on a program for Lebanon if the financial gap law is acceptable, or do there remain other items still in the way?  Thank you. 

MS. KOZACK: Okay. Are there any other questions on Lebanon?  Okay.  Let me go ahead and take this one. 

So let me just step back and give a little bit of a sense of where we are in Lebanon.  The authorities requested an IMF-supported program in March.  Several missions have taken place.  Our team has been to Beirut several times.  The discussions are still ongoing, and they have been mainly focused on the banking sector restructuring strategy, the 2026 budget, and the authority's medium-term fiscal strategy.  I can also add that Lebanon's economy has shown resilience despite the significant impact of the regional conflict.  The economy has shown a partial rebound on the back of strong tourism from the Lebanese diaspora. 

Restoring strong and sustainable growth in Lebanon requires implementing comprehensive reforms to tackle structural weaknesses that have hampered Lebanon's economic performance for many years.  The authorities have made some progress in formulating a strategy, especially to address the severe banking sector challenges, although there are still important differences of view.  We have discussed, for example, with the authorities the need to ensure the protection of small depositors, consistency with debt sustainability, and respect for the creditor hierarchy when it comes to the banking sector restructuring. 

So, with respect to the financial gap law, what I can say is that although the banking restructuring strategy is obviously a very critical part of the program negotiations, as I mentioned, it's not the only part.  So, the program will need to be comprehensive, and it will aim to address the many challenges that Lebanon has faced and the many challenges that are holding back growth in Lebanon.  So, in addition to the banking sector, fiscal and debt sustainability will need to be part of the reform program, as well as state-owned enterprise reform and reforms to governance more generally. 

Last question is for you. 

QUESTIONER: Thank you.  So Saudi Arabia released its budget for 2026 this week, where it projects a deficit of $44 billion.  And at the same time, the Saudi Finance Minister said the Kingdom's not afraid to cancel some of its more costly projects.  So, I just want to get a sense of how the IMF sees this affecting Saudi's economic outlook and if it makes Saudi Arabia more vulnerable to softer oil prices.  Thank you. 

MS. KOZACK: Okay. So maybe again, let me just step back and give a sense of where we see the Saudi economy before answering the specific question. 

The Saudi Arabian economy continues to have strong growth.  And of course, like many countries, there are downside risks to the outlook.  We project growth to accelerate to 4 percent in 2025 and 2026, and that's up from 2 percent in 2024.  So that is driven in part by higher oil production and also robust domestic demand linked to Saudi Arabia's reform plans.  Inflation remains contained in Saudi Arabia, unemployment is at record lows, and Saudi Arabia continues to have ample external and fiscal buffers. 

With respect to this specific question, on some of the Vision 2030 projects, what we can say is that, you know, we do welcome the recalibration of Saudi Arabia's fiscal expenditures.  This will help ensure kind of a proper sequence of spending while maintaining fiscal and external sustainability.  It's important to ensure that fiscal policy can be carefully calibrated to avoid procyclicality.  Meaning that, you know, fiscal policy, we usually think of fiscal policy as acting as a buffer, especially if there's risks to the downside materialize.  So, part of the goal for Saudi Arabia is to have fiscal policy be able to play that buffering role instead of an amplification role. 

And as you mentioned, you know, part of that is to avoid magnifying an impact of lower oil prices on growth.  It's a bit early for us to provide a comprehensive evaluation of the just released 2026 budget.  We're working with the authorities to obtain some more details on the specifics, specificities of their proposed adjustments and spending cuts.  And at that time, once we have more details, and it will likely be as part of, you know, an Article IV Consultation, we would provide then a full assessment of how we see Saudi Arabia's budget. 

And with that, I'm going to bring this Press Briefing to a close.  Let me thank you all again for your participation today and over this past year.  This will be our last Press Briefing of the year.  So, it's been a pleasure to work with you, all of you, and to see you, especially our regulars, over the course of the year, both in person and, of course, those of you online. 

As a reminder, this briefing is embargoed until 11:00 a.m. Eastern Time in the United States.  A transcript will be made available later on our website, IMF.org.  If you have additional questions or we didn't have time to get to your questions, please reach out to the media team at media@imf.org or via the Press Center, and we'll follow up with you bilaterally. 

This concludes our final Press Briefing for the year.  Our first day of business after the break will be Monday, January 5th, 2026.  I wish everyone a safe and joyful holiday season, and I look forward to seeing you all next year.  Thank you very much. 

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