Speaker: Ms. Julie Kozack, Director of the Communications Department at the IMF
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MS. KOZACK: Hello, everyone. Good morning. Welcome to this IMF Press Briefing. It's great to see you all here in person and online.
I'm Julie Kozack, Director of the Communications Department. As usual, this briefing is embargoed until 11:00 a.m. Eastern Time in the United States. As usual, I will start with a few announcements, and then we'll move to take your questions in person, on WebEx, and via the Press Center.
Starting with the travel of the Managing Director. On May 15th to 16th, the Managing Director, Kristalina Georgieva, will be in Costa Navarino, Greece, to participate in the Atlantic Council's Europe-Gulf Forum.
Then the Managing Director, together with First Managing Director Dan Katz, will attend the G7 Finance Ministers and Central Bank Governors Meeting in Paris on May 18th and 19th.
First Deputy Managing Director Dan Katz will be in Fort Lauderdale today and tomorrow to attend the G20 Finance Ministers and Central Bank Governor meeting.
And with that, I will close the announcements, and I'll now open the floor to your questions. For those who are connecting virtually, please turn on both your camera and microphone when speaking.
The floor is now open. All right, you caught my eye. Over to you.
QUESTIONER: Hi, good morning. Thank you for taking my question. So, can the IMF just provide an update on the coordinated response it previewed with the World Bank back during the Spring Meetings on the countries hardest hit by the Iran conflict? And secondly, the Managing Director has said at least a dozen countries have expressed demand for new programs. Is there any further update the IMF could provide today? And are there any countries in the Middle East and North Africa that are part of these countries requesting new programs? Thank you.
QUESTIONER: We have reported that Iraq is one of the countries that has sought IMF assistance because of the hardships that the war has created. They're not able to export any oil right now. So, can you confirm that? What level of are those discussions at? Are they seeking a new program? I know they have other over $2 billion right now that they do owe the IMF. Can they sustain that? Also, can you talk about the amounts that the MD had given us during the Spring Meetings? $20 billion to $50 billion assistance likely needed for these countries. Are we still in that zone, or has that number expanded?
QUESTIONER: So, broadly speaking, in April, MD warned us about the risk of recession in case the Strait of Hormuz remains closed. As we see right now, the problem is still there. Could you please update us on the IMF's view on the global level and regionally? What repercussions do you see as the Strait of Hormuz remains closed in comparison with the situation in April?
MS. KOZACK: So, what I'm going to suggest is let me take the first two questions on IMF response and Iraq. And then, I'm going to see whether there's other questions on the Global Outlook. So let's start with that.
Where are we in terms of our response and our coordinated efforts? First, we have formed, as you know, a coordination group with both the World Bank and the International Energy Agency. The three principals had a meeting during the Spring Meetings, and they spoke publicly after that meeting on advancing this coordination work with each organization working within its area of expertise. So that work is, of course, continuing at the more technical level to try to put together kind of a full picture of what does the energy market look like. That would be the IEA's experience. How does that fit into an assessment of the global economy? Which is really the IMF's expertise. And then also for the World Bank to think about what it means for developing countries and the development agenda in general. So that work is continuing at a technical level.
Now, in terms of IMF engagement, what I can say is this started around the time of the Spring Meetings, and certainly intensified during the Spring Meetings. We do have active discussions with our member countries to assess what are their needs given this latest shock to the global economy. And we're exploring, of course, with them where the Fund may be able to help.
Right now, what we're seeing is that many countries are actually asking us for support in the policy area. They're asking us for policy advice, how. can they best respond to the shock, given their individual country circumstances? So, during the Spring Meetings, we talked very much about the global economy and global policy responses. And now we're working with members on policy responses based on their individual country circumstances.
The MD did mention during the Spring Meetings that we may see demand by at least 12 countries for $20 to $50 billion in financing. Of course, those discussions are ongoing, continuing as part of this dialogue that we're having with individual countries. We don't yet have any specifics or details to share with you on specific countries, but of course, as those discussions continue, we will be able to share that information with you. And that applies also to Iraq.
Now, turning to the global economy, let me just see, does anyone else have questions related to the state of the global economy?
QUESTIONER: Just to sort of recap where we were during the Spring Meetings. There were three scenarios in the WEO. We were already drifting towards the middle scenario, I think 2.5 percent growth for this year globally, longer conflict, less uncertainty, higher oil prices, all of that. I think the MD said recently that we were probably in the middle scenario. So, are we possibly moving past that now? And how will the IMF determine when we move beyond that? And who will do that? Pierre-Olivier Gourinchas is leaving at the end of June. So, will he be the one sort of doing the WEO update in July, or will that come to others? Thank you.
QUESTIONER: Following on that question, we've seen the three scenarios in the January WEO. In the July Update, will these three scenarios remain? Or if the case-based scenario is no longer a possibility, will it be possible to make an adjustment and add another type of a scenario or reshuffle these three scenarios that the IMF was working with? Thank you.
QUESTIONER: I just wanted to follow up. You were talking about the policy responses that countries are asking for policy advice. Both the IMF and the World Bank urged members quite vehemently during the Meetings to refrain from taking steps that could kind of artificially keep demand high for oil at a time when there's such a shortage. Can you give us an update on how many countries you've seen that have taken such measures? I mean, we were reporting on it piecemeal. How many countries roughly have proceeded with energy subsidies and other measures that you would discourage? And are you seeing any countries that are taking steps that you think have a better approach, sort of more targeted measures?
MS. KOZACK: Anybody else online want to come in? All right, so let me start with where we are in terms of the -- oh, sorry, did somebody? Yep, please go ahead.
QUESTIONER: On the Global Outlook, I would like to ask you about this visit of Trump to China and his meeting with Xi Jinping. It seems things are going on so well so far. To what extent does the IMF see better relations when it comes to trade coming up, and how can this impact your outlook on the global economy, especially that tariffs and trade disruptions have always been a top priority in the regards of the IMF? Thanks. And then I have another question on Egypt, but when you come to Egypt.
MS. KOZACK: Let me start with this in terms of the scenarios.
So, as you've all noted, at the time of the April WEO, we presented three scenarios. One which we called the reference scenario, which was really for a short-lived war, an adverse scenario, and then a severe scenario. And each of the scenarios had three major channels. The first was the oil price. The second was inflation expectations, whether they were stable or becoming de-anchored. And the third was financial conditions. So, where we are in terms of the three scenarios, we're clearly moving out of the reference scenario toward the adverse or in the adverse scenario.– And if we look at oil prices, they're clearly higher than what was assumed in the reference scenario.
But looking at inflation expectations and financial conditions, the other two channels, what we see on inflation expectations is that short-term inflation expectations have moved up, in line, in a sense, with the actual upward movement in actual inflation. But when we look over the medium term, we still see inflation expectations, especially in major economies, still relatively well anchored over the medium term. So that's a second important channel. And then the third channel is financial conditions, and financial conditions remain quite accommodative. So, as we look at the three scenarios that we laid out in the WEO, we need to look at those three channels.
So yes, we are moving into the adverse scenario, but inflation expectations are still reasonably well anchored, and financial conditions still remain accommodative. Coming to July when we do the WEO Update, we will provide our latest assessment of the global economy. How exactly we will do that with what scenarios? That, I think, is still something that is to be determined. But we will certainly provide a fulsome update of how we see the global economy in July when we do the WEO Update. And how exactly we will do that in terms of who will be presenting, who will hold this space, we will let you know.
And then turning to our policy advice. Here, what I can say is that, as we talked about at the Spring Meetings, we're obviously tracking and analyzing very closely the policy measures that countries are putting in place since the middle of February or end of February when the war started, including through our internal monitoring and also intensive discussions with country authorities.
What we have seen is that countries have responded with a mix of measures. Advanced economies have mainly used fiscal measures, and those have generally focused on tax cuts. What we've seen in emerging and developing countries is something a bit different. They have adopted a more varied policy mix. Some have introduced conservation measures, measures to manage oil and fuel consumption. And an example of an energy conservation measure is, for example, a move to more hybrid work, for example. Or encouraging people to use more public transportation. So, these are some of the energy conservation measures, and we tend to be seeing them more in the emerging and developing countries.
The other thing is that we see responses varying a bit by depending on whether a country is an oil exporter or an oil importer. So that's the broad picture that we're seeing so far. We are going to continue to monitor this closely, and we hope to be able to share some more details with you as this monitoring becomes more concrete.
All right. Let's move on.
QUESTIONER: Good morning. Last month, Luis Cubeddu stated that they plan to present the Second Review of the agreement with Argentina to the Board sometime between early and mid-May. Has this already taken place? And if a date has indeed been set for the Board meeting to approve the Second Review, when would it be? In its last report, the IMF noted that it aims for Argentina to achieve sustainable access to international capital markets. However, Minister Caputo said that they are in no rush to do so. Does this remain a goal of the IMF for this year, and it's a topic of discussion with the Argentine authorities?
QUESTIONER: Following up on Argentina, the Staff-Level agreement specified on corrective measures. Are these prior actions that need to be taken into consideration before Board approval? And if there's any details that you can provide on those?
MS. KOZACK: Anyone else in the room on Argentina? All right, let me go online.
QUESTIONER: Thank you for taking my question. It would be two questions. Has the IMF evaluated whatever the current situation involving the Chief of Cabinet, Manuel Adorni, could affect the economy? That's the first question. And the second is, with a 70 percent of pending index and tax revenues down 5.7 percent, how does the IMF expect to accomplish the 1.4 percent surplus to be maintained? Thank you.
QUESTIONER: I was wondering whether the IMF has any comments on the improvement of the country risk that's going down, if that facilitates the idea of going back to international financial markets? And also, there was a quite massive demonstration this week after some university spending cuts. I was wondering what's the IMF's take on the expenditure cuts in education?
QUESTIONER: Thank you. So, it's going to be two quick questions. The first one, tax revenue. It fell in April for 9 consecutive months. And this week, the government had to cut 2.4 trillion pesos from the 2026 budget. So, is this a concern for the IMF regarding Argentina's economic activity and/or debt repayment capacity?
And the second one. Manuel Adorni, Milei's chief of staff, is facing legal proceedings for possible illicit enrichment. And there have been concerns about whether this could affect the attitude of global investors towards Argentina. Does the IMF have any opinion on this? Thank you very much.
MS. KOZACK: So today on Argentina, I'm going to be fairly brief. As you know, and as I think many of you mentioned, the IMF staff in Argentina and the authorities reached a Staff-Level Agreement on the Second Review in mid-April. A Board meeting will take place next week. Upon approval of the Board, the disbursement of $1 billion U.S. can take place. And understandings in reaching the Staff-Level Agreement and bringing the program to the Board focused on policies to appropriately balance disinflation, external stability, and growth objectives for Argentina. And this is meant to support a timely and durable re-access to international capital markets.
I can simply add that the authorities' stabilization plan continues to yield important results. Reform momentum has gathered steam more recently. And in fact, I think as one of you mentioned, Argentina was recently upgraded by one credit agency, and that has supported the further reduction in Argentina's spreads.
With respect to some of the questions on fiscal policy, what I can say is that the authorities have demonstrated a strong and unwavering commitment to a zero balance fiscal anchor. That fiscal anchor, as we've discussed here before, is something that we see as critical to underpinning the decline in inflation and to restoring confidence and macroeconomic stability in Argentina. Argentina has also seen an important reduction in poverty rates, which are now below 30 percent, and that's a 7-year low. So I will leave it at that on Argentina.
And you will see after the Board meeting, there will be the usual publication of documents, both a press release and the Staff Report will be published, which will have many of the details that you are looking for.
QUESTIONER: Do you have any specific date?
MS. KOZACK: No, I'll just say next week for now.
QUESTIONER: Thank you so much. Question about Ukraine. So, when does the IMF plan to conduct next review of the financial program to Ukraine? And what amount of disbursements is going to be provided to Ukrainian authorities under the next review and for this year overall?
The second question for Ukraine as well. Could you please tell us how satisfied is the IMF if we are talking about current pace of reforms in Ukraine, taking into account that the Rada is still dragging with its movement to adopt necessary bills and legislation?
QUESTIONER: Thank you so much. Can you specify if the IMF has made any decision on postpone the requirement for Ukraine to remove VAT-related privilege for self-employed businesses? And if so, is the delay indeed for 1 year or a different time period? Thank you so much.
QUESTIONER: Let me just pile on there with Ukraine question. So, the other issue that is still up for grabs in terms of Ukraine fulfilling the requirements has to do with the VAT tax on small parcels. Is that something that the IMF is insisting on? We've gotten indications from Ukraine that that is the case. And when do you expect them to do that, and in what form? And if they do, if you relax the requirement on the small businesses, what other options has Ukraine put on the table to boost revenue as required? And then just a third quick one. The Ukraine Recovery Conference is going to be taking place in Poland in June. Will someone from the IMF be attending that? Thanks.
MS. KOZACK: Anything else on Ukraine? All right, let me go ahead and, and respond to these.
So, as you know, we approved a new 4-year program for Ukraine. Our Executive Board approved a new 4-year program for Ukraine, of $8.1 billion in February. IMF staff will travel to Ukraine in the coming weeks for the First Review mission, and there they will discuss, as usual, the recent economic developments, progress on reforms, and the authorities' policy priorities moving forward.
With respect to the overall pace of reform and then the tax issues, what I can say here is that as part of program discussions and the approval of the new program, the authorities agreed to a comprehensive reform agenda. It's designed to meet the authorities' goals of EU accession. It's designed to also unlock substantial external support, which is very important to help meet Ukraine's very large financing needs. The other goals include de-shadowing or reducing the shadow economy in Ukraine, preparing for eventual reconstruction of the country after the war. These are some of the objectives that the program is designed to support in the review mission that will take place in the coming weeks. Of course, staff will hold discussions with the authorities on the status of those reform commitments, including the two that were raised on VAT. So those will be discussed during the mission, and we will provide further details after those discussions have concluded.
What I can also say on broader revenue mobilization efforts, as we all know, Ukraine has very, very significant financing needs. In addition to external financing, Ukraine also needs to move toward mobilizing domestic financing, and this will be really critical for the country. We are supporting efforts by the authorities to broaden the tax base, including by reducing the size of the informal sector. Right now, the informal sector, for example, is estimated at 45 percent of GDP. So, moving some of that sector out of the shadows into the formal economy, where those enterprises, those firms are contributing to tax revenue, will be very important for Ukraine in addition to some of the other revenue mobilization measures.
On the Poland conference, I don't have any details on that for you right now. But if we have something to report, we will certainly share it with you.
And then, I did get a reminder, I forgot to answer there was a question in the global economy section on the Trump-Xi summit and reduction in trade tensions. What I can say on this is that it's very important, of course, that the world's two largest economies are engaging at the highest level. We certainly welcome the fact that there's a constructive dialogue between the two countries. Anything that is going to help reduce trade tensions and reduce uncertainty is good for both of those large economies and, of course, good for the global economy as well.
Size of disbursement to Ukraine. Let me see if I have that. I do not have that. I don't have it handy. We'll come back to you.
QUESTIONER: Thank you for taking my question. The Managing Director has recently traveled to Kenya. She was in Africa. Could you provide updates on meetings? She was also in Ethiopia. Could you provide updates on Gabon, Ethiopia, Côte d'Ivoire, Ghana, and other engagement[s] that she had while she was in Africa?
And I guess my other question is kind of related to the global economy, is on food security. As we know, the impacts of the energy crisis - we have significant impact - is having significant impact on food security on the continent. So, adding the assistance that governments are requesting from the IMF, if you could talk about that.
The last thing is, during the Spring Meetings, in my conversation with some of the ministers, they talked about having a framework of bringing informal workers into the main markets and using digital assets, cryptocurrency agency to do that. So is the IMF working with some of these countries to establish the R&D framework? Is the IMF working with them on that?
MS. KOZACK: On your first question, I'm not going to go into each country in the interest of time. But what I can say is that the Managing Director did participate, as you noted, in the Africa Forward Summit in Nairobi, where she did hold constructive discussions with a number of African leaders, including from Ethiopia. She actually made a stop in Ethiopia on her way to Kenya, where she met the Prime Minister, and they had a very good and constructive discussion.
She met, of course, at the Summit with a number of African leaders. She made some remarks which we've published on our website, and in those remarks, she has really emphasized the future for Africa. Africa is a continent of young people where she sees the future as particularly bright. She's also seen that many African countries have undertaken a number of very important reforms to open their economies, create space for the private sector to thrive. They have taken efforts to reduce debt and to pursue more prudent fiscal policies. She has made the case in her remarks, I would say, for Africa as kind of a leading light for the future of the global economy and a source of innovation for the global economy, provided that reforms continue and that there is investment both in the continent and in the people of the continent.
She also did meet while she was in Kenya with private sector representatives and Kenyan civil society. She talked about the complex global environment that Africa finds itself in as well, including the impact of the recent external shocks and the evolving financing conditions in Africa.
And finally, she highlighted the IMF's commitment to partnering and supporting African countries as they navigate this complicated global landscape, and as they take reforms to really invest in their countries and in their people.
On your question on food security, this is a very important question. You're absolutely right that the energy shock that has kind of hit the global economy because of the implications for fertilizers in particular also can have the effect of becoming a food price shock and for some countries a matter of food security, not just prices but food security. So, this is something that we are obviously paying very close attention to. We have seen the price of fertilizers increasing. We know from history that when fertilizer prices increase, it takes about 6 months or so for this to translate into increased food prices and, in some cases, reductions in yields and food security issues. So, this is something that is top of mind for us and that we are following very closely. We'll have an update perhaps as part of our World Economic Outlook, but we'll also be working very closely with individual countries should they face food security issues and should they require IMF support to help them.
And then on your final question, I don't really have anything on this particular topic on the kind of link between crypto, the use of cryptocurrencies, and informality. What I would say is that we are supporting countries. We treat the issues a little bit distinctly. So, we do encourage and work with countries and our member countries to reduce informality in the economy.
Informality has two main parts to it that we are concerned about. The first is the one I mentioned in the case of Ukraine, which is you have a big part of the economy that's not actually contributing through the tax net, and that tends to suppress tax revenues, and that makes it more difficult for countries to have a prudent fiscal policy. It makes it harder for them to deal with debt issues. So, having revenue generated from within the economy is critical, and to do that, reducing informality is important.
The other area where informality can be important is often that workers who work in the informal sector then are not part of the formal social safety net. So, they often are not part of the formal pension systems. They're not part of unemployment or other parts of the social safety net, which makes them often particularly vulnerable when shocks come.
So, for both reasons, we're encouraging our member countries to take measures to reduce informality to both protect the workers in the informal sector, but also to ensure that tax revenue can be robust.
QUESTIONER: Just a quick question on Venezuela, after the news that we got during the Spring Meetings, I just wanted to know if you had any sort of updates regarding, you know, technical legal steps, Article IV consultations, all the work lying ahead in order for full re-engagement with the country.
MS. KOZACK: Anything else on Venezuela?
QUESTIONER: Just following up exactly on that, looking at the way forward with Venezuela. Is the IMF looking mainly at providing technical assistance? Is a program on the cards? What's the fuller range of options that the IMF is currently looking at? And where are we with the resumption of ties?
QUESTIONER: Venezuela authorities announced yesterday that they're moving forward with a debt restructuring. There's something interesting in that statement in which they say they will provide a debt sustainability analysis by June. Venezuela has a lot of claims, very diverse. The IMF hasn't had access to data for a long, long time, almost two decades. My question specifically is: have the Venezuelan authorities reached out to the IMF for any type of help on this, the sustainability analysis, or is something that for now Venezuela is going to do on its own? Is there going to be an IMF consultation? Have they reached out to you on that, or what's the next step specifically on the DSA?
QUESTIONER: In the U.S., we saw lifted sanctions recently to allow for Venezuela to enter into debt restructuring talks with international institutions. The IMF included, obviously, but lots of others. Is the IMF working closely with the U.S. on trying to provide these options to Venezuela? What is the nature of those talks? Because obviously these are kind of stepwise, and if those sanctions remain in place, it can be very hard for the IMF to do its work.
MS. KOZACK: Following the decision on April 16th, the decision of our membership to resume dealings with Venezuela, we are holding regular discussions with the Venezuelan authorities. These discussions have focused mostly on the production and provision of economic data. And providing and producing this economic data is a requirement under our Articles of Agreement so that we can assess the macroeconomic developments and provide policy advice ultimately to Venezuela. We've met with counterparts at both the Ministry of Finance and the central bank. The Venezuelan authorities have not requested financing from the IMF. So, any financing would require, as you know, a formal request from the authorities.
On the issue of the debt restructuring, we are aware of yesterday's announcement, and we're currently waiting to understand some more of the details. We have so far not been involved in this process of the announcement of the debt restructuring or the DSA. What I can just say is that restoring fiscal and debt sustainability is obviously very important, a very important priority for Venezuela. And we do stand ready to support the authority in this important step that they're taking.
And maybe just to say that typically, when a country chooses to restructure its debt, the discussions are between the country authorities and their creditors. The Fund does not participate in those discussions. Most debt restructurings, not all, but most, take place under the umbrella of a Fund program, and our role is to provide the macroeconomic framework. When it's a program, it's agreed obviously with the authorities. And that includes essentially an amount of debt relief that would be needed to restore debt sustainability. So that's really the role of the IMF, but then the discussions themselves, the negotiations, are between the country authorities and their creditors, and we don't participate in those.
QUESTIONER: There was no request on IMF financing from Venezuela, but did they bring up the SDR access during these talks? Because Delcy Rodríguez did announce that after the call with the MD Georgieva, but there was no IMF answer on that. Can you give us a clarity on the SDRs access that Venezuela is requesting?
MS. KOZACK: I don't have any details for you in terms of whether that was discussed as part of the team's interactions. What I can say is that now that we have resumed dealings, Venezuela has access to their SDRs. And that's as much as I can say right now.
QUESTIONER: In South Korea, there are diverse interpretations regarding the recent IMF Fiscal Monitor Report, which was published in last April. While some interpret the report as the IMF pointing out an excessively rapid increase in debt, the Korean government is countering that this rate is not particularly fast. And I would like to hear more details about how the IMF internally evaluates South Korea's debt speed, the speed of increase.
MS. KOZACK: On this issue of Korea's debt, let me give some of the context. In our April 2026 World Economic Outlook and the Fiscal Monitor, they all use the same underlying data. In both of those reports, Korea's general government debt stood at 52.3 percent of GDP at the end of 2025. And the projection is that Korea's general government debt will reach 63 percent of GDP in 2030. Now, to put this in context, 63 percent of GDP by 2030 is half, about half the global average for general government debt. So, I'd say the bottom line for the Republic of Korea is that its debt position is quite strong. When we did our Article IV Consultation, the report was published in November. We assessed Korea's debt to be not only sustainable, but to have a low risk of debt distress. So again, Korea's position with respect to debt is quite favorable compared to many other countries around the world.
I think the other thing I would point out is that, yes, our fiscal monitor did mention that Korea's debt would rise, but it also said that the rise in Korea's debt was from a "markedly different level." And again, this is referring to the fact that Korea's debt level is quite low relative to many other countries globally. So, I think it's important there to focus on the overall debt picture and not so much the speed of increase, but really the fact that Korea's debt is relatively low. It's about half the global average. The debt is sustainable, and there's a low risk of debt distress in Korea.
The other thing I would just say about Korea and fiscal policy is that we have noted repeatedly that Korea is following a prudent fiscal policy. Right now, there is some fiscal expansion, but this fiscal expansion is very appropriate because it is aimed at supporting structural reforms that ultimately aim to boost productivity in Korea, which will be important for future economic growth, given demographic pressures in the country. And we'll have more to say on this later in the year when we do the Article IV Consultation.
We only have a few minutes left. I'm going to go online because I see we have many questions online.
QUESTIONER: I have a couple of questions on Egypt specifically. My first one is as the Seventh Review of the EFF program with Egypt is scheduled for mid-June, could you please brief us on the anticipated mission visit to Egypt for the discussions on this review? And also, in this respect, how does the IMF see the pace of reforms in Egypt amid the ongoing regional tensions, especially with Egypt returning to the international financial markets through new social bond issuance taking place today, and also for moving forward in the IPO program? My second question is on the meeting the Egyptian president had with the MD in Kenya on the sidelines of the Africa Forward Summit. Could you please brief us on the key outcomes of this meeting?
QUESTIONER: There are some reports that the IMF mission is actually in Egypt this week, and I wonder if you can confirm that and offer an explanation as to why the review has been moved up by about a month ahead of schedule. Thank you.
QUESTIONER: Actually, I have a similar question, because we have sources that have told Bloomberg that the mission has actually arrived in Cairo this week, on Monday. If we can confirm that from your side. And also, there have been recent reports of recent critiques about and worry about shadow banking increasing in Egypt. Does the IMF have any comment about that? Will this, in any way, have any effect on the reforms that you are talking about?
MS. KOZACK: I can confirm that IMF staff are in Cairo right now to conduct the Seventh Review under the EFF Arrangement and the Second Review of the RSF. Staff are working with the authorities and holding discussions with them to assess the impact of the war in the Middle East on the Egyptian economy. And the staff will also be discussing policies needed to achieve the program objectives and to support a strong economic path forward that will benefit all Egyptians. At the end of the mission, if a Staff-Level Agreement is reached, we would expect to complete the review, meaning bring the review to our Board for completion over the summer. And pending Board approval, this could lead -- this would lead to a disbursement of about $1.6 billion U.S.
In terms of the overall situation in Egypt and the pace of reform, what I can say here is that what we've seen on the economic front is that the impact of the war in the Middle East on Egypt has remained relatively contained. And this is in large part thanks to decisive policy actions taken by the authorities, which have eased external and fiscal pressures. So, we do expect growth to remain resilient. And of course, this is something that the team will be confirming as part of their mission on the ground.
With respect to the meeting between the Managing Director and President El-Sisi, all I can say there is that, yes, they did meet. They had a very constructive meeting. They discussed both the global implications of the war and also how the Fund can best support Egypt's reform efforts, given the uncertainties associated with the war.
On your question on shadow banking, I don't have anything for you on this. But we'll come back to you after the mission, should the team have anything that they want to add on this topic.
I'm going to take just a few last questions online, and then we're going to wrap up.
QUESTIONER: A quick question on Sri Lanka. When will Sri Lanka's next Review be taken up by the IMF Executive Board? And given the current situation across the world, and Sri Lanka reportedly paying 6 times more than what it paid for fuel imports earlier this year, is the IMF looking at adjusting the existing program or renewing it?
QUESTIONER: The IMF has made the restoration of cost recovery full pricing a condition of Executive Board approval of Sri Lanka's Fifth and Sixth Combined Reviews. Given that the government is currently providing 100 rupee per liter diesel subsidy, is this consistent with the IMF cost recovery pricing framework? If not, would it affect Board approval?
MS. KOZACK: What I can say on Sri Lanka is just to remind everyone that on April 9th, the IMF team and the Sri Lankan authorities reached a Staff-Level Agreement for a combined Fifth and Sixth Review under the EFF. Of course, review completion is subject to approval by our Executive Board. We expect the Board meeting to take place in the coming weeks.
There were a few prior actions that needed to be completed before we could bring the program to our Executive Board, and these were the restoration of the cost recovery, electricity, and fuel pricing, while also protecting the vulnerable. So, there was sort of two parts to moving to cost recovery. It was moving to cost recovery, but also ensuring that the vulnerable population was protected, and completing the financing assurances review. Once the review is approved by our Executive Board, Sri Lanka will have access to about $700 million U.S. in financing. And again, we expect that the board meeting will take place in the coming weeks.
And then on your second question, and this is more on flexibility and adjusting the program, what I want to say first is that Sri Lanka has been hit by two very large shocks. First, Cyclone Ditwah, which was an enormous shock for the economy,but also a humanitarian shock for the people of Sri Lanka. It was really tragic and devastating for the people. And now it is affected, of course, by the war in the Middle East.
The Sri Lankan economy and the Sri Lankan people have really shown remarkable resilience through these shocks. And the ambitious reforms that Sri Lanka has been painstakingly taking over the last several years under the program are bearing fruit. And part of the economic resilience that we're seeing and the strong outcomes that we're seeing for the Sri Lankan economy are underpinned by these reforms.
I just want to highlight in particular that fiscal performance in 2025 has been particularly strong in Sri Lanka. And this has been supported very much on the revenue side. The debt restructuring is nearly complete. The economy grew by 5 percent in 2025. And inflation, which had been in deflationary negative territory signaling some ongoing weaknesses in the economy, has now returned to positive territory. And we expect the debt-to-GDP ratio to be on a downward trajectory.
So, all of this to say that the Sri Lankan economy is performing well, the reform commitment is strong by the authorities,and we will continue to work very closely with the authorities to assess how we can best continue to support them. We're very committed to supporting Sri Lanka and the Sri Lankan people as they seek to achieve peace and a more stable economy. And so, we will continue to work very closely with them, and w our commitment is unwavering in supporting Sri Lanka.
And with that, I'm going to bring this Press Briefing to an end. Thank you all for your participation today.
As a reminder, the briefing is embargoed until 11:00 a.m. Eastern time in the United States. A transcript will be made available later on IMF.org. I know there are many of you who we left with the hands up, especially online, and some in the room. If 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 will follow up with you bilaterally.
Thanks very much and wishing you all a wonderful rest of your day.
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