Speaker: Ms. Julie Kozack, Director of the Communications Department at the IMF
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MS. KOZACK: Hello, everyone. Welcome to this IMF Press Briefing. It's great to see you, all those of you here in person, and also those of you joining us online.
I'm Julie Kozack, Director of the IMF's Communication Department. As usual, this briefing is embargoed until 11 a.m. Eastern Time in the United States. Let me start with a few announcements before I move to take your questions.
First, today, the first Deputy Managing Director, Dan Katz, will be in Gdansk, Poland, to participate in the Ukraine Recovery Conference.
On June 29th, Deputy Managing Director Bo Lee will travel to Tashkent, Uzbekistan, to participate in the monetary policy dialogue 2026, where he will join a panel discussion titled Monetary Policy under Global Volatility and the Wave of Digitalization.
And finally, as the Managing Director mentioned in the blog that she published last week, we will issue our World Economic Outlook Update on July 8. So, just in a couple of weeks.
I'd also like to announce that registration for the 2026 IMF and World Bank Group Annual Meetings, which are going to be held in Bangkok, Thailand, from October 12th to 18th, is now open. So registration is now open. Please register through IMFConnect.org. If you need a visa to enter Thailand, please make sure to register for the meetings no later than September 1st, 2026.
And with that, I'm going to now open the floor for your questions in person, online, and through WebEx. For those of you connecting virtually, please turn on both your camera and microphone when speaking.
All right, the floor is open. Let's start with you.
QUESTIONER: Thank you, Julie, for your time. First, I would like to ask about Venezuela after the earthquakes yesterday. Acting President for Venezuela, Delcy Rodriguez, mentioned that they were creating a special fund of up to $200 million with IMF resources. I would like to know if you could confirm if this is part of -- the money comes from the SDR assets that the country holds in the Monetary Fund? If they have -- if the idea is to access the money as soon as this week, how that process works, if that money will be allocated in a special fund, or it will hit the treasury or the central bank accounts? And secondly, has the Managing Director communicated with Delcy? How is the IMF going to move forward with this catastrophe? Thank you so much.
MS. KOZACK: Okay, thanks. Anybody else want to ask on Venezuela? Yeah, please go ahead.
QUESTIONER: I just want to follow-up on the Venezuela questions. To what extent do you think that this massive natural disaster will affect the debt restructuring process? And then can you -- can you also say a word about the involvement of the IMF or not in this debt restructuring process, which has been handled by Centerview. And whether, you know, you've been, like, to what extent have you been involved, have there been technical discussions, are you getting any oversight, and, you know, what role does the IMF typically play in these kind of cases? Thank you.
MS. KOZACK: Okay. Okay, does anybody online want to come in on Venezuela? Okay, let me go ahead and start. Oh, yes, please, go ahead.
QUESTIONER: Yeah. Hi, Julie. Thank you. So my question is about the amount of the funds. We have heard from Delcy Rodriguez that it will be the initial amount of $200 million, but we know that Venezuelan funds in the IMF is up to about $5 billion. So could you please elaborate if the IMF is ready to provide additional assistance or additional funding if it's necessary for Venezuelan economy right now? Thanks.
MS. KOZACK: Okay, very good. All right, let me go ahead. Let me start by saying that we're deeply saddened by the impact of the earthquake on Venezuela. We express our deep sympathy to all of those affected, and our thoughts are with the people of Venezuela at this very difficult time for the country.
Now, turning to the questions, I don't have much to say at the moment, given that, you know, the earthquake has just happened. So we're obviously closely monitoring developments. We've been closely engaged with the Venezuelan authorities, and we will remain closely engaged with them as they assess the economic impact and the recovery needs for Venezuela. And of course, part of those discussions will be, you know, how we can -- how we can best support the authorities and the Venezuelan people as they recover from this tragedy. So we'll have more details we can share as those discussions evolve.
On the other, including on amounts and things like this. There's going to have to be a full assessment of what are the needs as more information comes to light. We can provide additional information for you.
On your question on debt and the debt restructuring process. So, what I can say right now is, so far, we, the Fund, are not and have not been involved in the debt restructuring process that has been announced by Venezuela. We remain -- we maintain a regular engagement with the authorities, including on, for example, the macroeconomic outlook and how we see that, and we exchange views on that. And we, of course, stand ready to assist the authorities as needed.
I think you also asked what would we typically do in a debt restructuring process. So, I think there I can share a bit about how we typically act across our whole membership. So, often, but not always, debt restructuring takes place in the context of an IMF program. That's not the case here in Venezuela, but we have other cases, other country examples where it's also debt restructuring has taken place outside an IMF program. The IMF is never a party to the negotiations and the discussions. What we provide is particularly in the context of a program which we would provide the macroeconomic framework, we would provide a debt sustainability assessment for the country. And in cases where debt restructuring is taking place, especially if it's aimed to restore debt sustainability, we would be looking and assessing the agreement that is reached between the authorities and their creditors to see whether it's consistent with the parameters of the program and whether it will durably restore debt sustainability for the country.
So that's kind of where our role typically comes in under a program. This case is a bit different. We have a dialogue with the authorities, and as we said, we're ready to assist them as needed as they embark on this process with their creditors and their financial advisors.
QUESTIONER: So, just a quick follow-up on the $200 million will be their assets – it is not special allocation from the IMF.
MS. KOZACK: Yes.
QUESTIONER: -- right? Yes, their assets. It's not a special allocation from the IMF?
MS. KOZACK: So we are -- I don't really have anything for you on that yet. So let us, you know, come back to you on those details.
QUESTIONER: One more follow-up? I'm sorry. Absent the IMF's involvement in the debt restructuring, can a kind of a debt sustainment analysis be trusted? If you know, the IMF isn't there as a sort of, you know, or an auditor, is there some kind of an auditing process? And, you know, does it worry you that a country with so much debt would be embarking on a restructuring without the eyes and experience of the IMF?
MS. KOZACK: It's not, I would say we've had cases in the past where our member countries have pursued a debt restructuring outside of a program. So, it's really a choice for the authorities and, of course, in those, you know, and then a discussion between the authorities and their creditors. So it's really a matter, I would say, for the authorities and their creditors to determine what is the amount of debt relief that, or what I should say, how will the debt restructuring, what are the, you know, specificities of the types of instruments that will, you know, replace the old instruments. So that part of the negotiation is really between the authorities and their -- and their creditors.
I would say that in cases where we have a program, it has been beneficial to help anchor the restructuring when the Fund has a program which is supported not just by our technical analysis, but a full set of policies that the authorities have committed to implement. And that has been, I think, a source of reassurance in some other cases.
All right, let's move on. We'll go to you.
QUESTIONER: Thank you. I wanted to ask you about India. What's the impact of Iran war on India's economy? And what impact do you think there will be revision of your growth rate, India's projection of growth rates, because of that?
MS. KOZACK: Okay. All right, so on India, what I can say is that, despite the impact of the war and global headwinds from the global economy or externally, India -- India's economy has been growing robustly, and it has been supported particularly by very strong domestic demand within India. We had projected growth at 6.5 percent in fiscal year 2026-2027. And that was a slight upgrade -- that was in April -- and that was a slight upgrade compared to what we had had in January. So, 6.5 percent is still quite strong growth. And what it reflects is some carryover from last year. It also reflects the reduction in the U.S. tariff rate, which had been set at 50 percent and then was reduced to 10 percent. And that reduction in tariffs also partly offset the impact of the global energy shock on India.
Right now, we see that there's strong momentum that has continued in the first quarter of this calendar year. The economy in India had been growing in the first quarter at 7.8 percent, and that was above what we had built into our projection for April for the first quarter. So, there is quite strong momentum still in India. It does still remain a growth engine for the global economy despite the shock.
QUESTIONER: Just wanted a quick follow-up on that. You know, India's energy requirement is huge and depends a lot on the Strait of Hormuz, where the energy comes from. There has been a lot of disturbance in that part.
MS. KOZACK: Yes.
QUESTIONER: My question was about is it going to impact India's economy in any way, or do you think right now the Indian government has taken measures to that so there's no impact of that?
MS. KOZACK: No, I think it's clear that the energy shock has had an impact globally, and no country has really been untouched by the global shock. We did see that India did face supply disruptions with respect to energy. We also, India was also affected by higher prices, like most countries in the world, because of the energy price shock and, of course, because India imports quite a lot of energy. We saw then, of course, the effect on the external balance as well as India's -- the price at which India had to import energy increased. So that does put pressure on costs and inflation. And it can also potentially add to some pressures on India's fiscal deficits.
So, there is clearly an impact of the shock on India, as in all other countries. I think from our perspective, some good news for India is that India entered this latest shock from a point of strength. It had strong growth momentum going into the energy price shock. Inflation was low, the current account deficit was modest, and India has ample foreign exchange reserves. So, that work on the macroeconomic side and those buffers that India built have been a source of resilience for the Indian economy, despite the fact that, of course, there is still an impact from the shock.
QUESTIONER: Good morning, Julie. The Argentine government will face debt payments of nearly $23 billion next year, including debt owed to the IMF, of course. Do you believe the economic team's current strategy will be sufficient to meet obligations in 2027, especially considering that there will be presidential elections next year? Thank you.
MS. KOZACK: Okay, are there other questions on Argentina?
QUESTIONER: Thank you. Yes, following up on the prior question. When Argentina got the guarantees from the World Bank and IADB recently for some loans from private banks, there was a change of on the wording of those statements, saying basically it went from this money will help Argentina pay its maturities to more of a sense of this money will help Argentina re-access international markets. From the IMF perspective, on a technical level, do you think that the next time that Argentina needs to get some type of financing, it will have to be the international markets tapping the international markets as the next step for financing this year? Thank you so much.
MS. KOZACK: Okay, very good. Let's go online. I know there's some questions online.
QUESTIONER: Good morning, Julie. Sorry, I have a problem with my camera. I want to ask about informal employment in Argentina. As you know, it continues to grow, and labor reform has not yet provide the necessary incentive to formalize employment. How does the IMF analyze this issue, and does it believe any specific measures should be taken sooner? Thank you very much.
QUESTIONER: I'd like to know if the IMF thinks that Argentina should re-access international markets before the end of the year. Thank you.
QUESTIONER: I have two quick questions. Official numbers released by FinTech (phonetic) this week showed a 2 percentage point increase in informal employment during the first quarter of this year. So, is the IMF concerned about this? And the second one is this week, the MSCI confirmed that Argentina will retain the standalone status this year and rule out obliging it to frontier market status despite the foreign exchange flexibilization and trade deregulation measures implemented. So, is the IMF concerned about this global investor's perception of the Milei administration? Thank you.
QUESTIONER: Hi, Julie. Hello, everyone. I was wondering if the IMF is reevaluating their inflation projections given the drop on oil prices this week? Also, the JP Morgan this week told that not all maturities are covered for this next year. So, I was wondering if you consider there would be a problem with the exchange rate?
MS. KOZACK: Okay, anyone else want to come in on Argentina?
QUESTIONER: Thank you. The language that the IMF used recently was that there are still exceptional risks for repayment from Argentina. What needs to change for that language to change for the IMF to feel more comfortable that they are going to get their money back?
MS. KOZACK: Okay, so let me start by just saying, before turning to the specific questions, I just want to continue to recognize that Argentina does -- is continuing to make important progress in restoring macroeconomic stability, in strengthening the country's resilience, its economic resilience, and creating a more open and efficient economy. Growth has continued, inflation is falling, international reserves are being rebuilt, and financing conditions have continued to improve for Argentina. So, against that positive background, let me address some of the questions that you've raised.
So, on financing conditions, there were quite a number of questions on financing. What we've seen is that they have improved considerably. Sovereign spreads have narrowed significantly in Argentina. They're now below 450 basis points. Market sentiment toward Argentina has become more favorable, and this reflects, you know, upgrades by two credit rating agencies. But I also want to say that decisions regarding the timing and the terms of market access are ultimately decisions to be made by the authorities. We are welcoming the continued efforts that the authorities have made, you know, to strengthen their external buffers and to preserve policy credibility. And that will ultimately help support durable access to both domestic and international capital markets over time for Argentina.
Regarding the questions on multilateral support, we are working closely with the World Bank and the Inter-American Development Bank. We recognize the catalytic, the important catalytic role that international financial institutions and multilateral development banks can play in supporting countries' financing strategies and their reform agendas. So, support from multilateral institutions can help reinforce confidence. It can help improve financing conditions for countries. It can help strengthen external resilience, and it can facilitate a gradual and sustainable return to market financing. And if we, as we look ahead, you know, we are very confident that the authorities in the authority's commitment to continuing to sustain the efforts to strengthen the durability of their fiscal anchor and to enhance their policy frameworks and rebuild buffers, their reserve buffers in particular.
On the questions regarding employment here, what I can say is, you know, one of the key goals of the program is to move toward a more formal labor market, more formalization in the labor market. But formalization depends on a number of different factors. It includes not only macroeconomic outcomes. Those factors include the tax and the regulatory structure. They include rigidities in the labor market. And no single indicator can really capture the extent of formalization. The labor reform that was -- has been enacted recently or put in place recently is relatively new, it's relatively recent. And the effects of these kinds of reforms take time to emerge. And the objective, of course, of this reform is to support formal job creation and to improve the functioning of the labor market, which is something that we support.
And I think with that, I'll just say -- in response to your question, I would just point out that Argentina has made all of its payments to the Fund, and we are confident that they will continue to do so. We don't have any concerns there.
Let's move on.
QUESTIONER: Thank you. Hi. So, I have three specific countries, Angola, Zambia, and South Africa. So, on Angola, we've seen a lot of the countries that are oil exporters and importers affected. If you could provide updates on Angola, how the country is faring regarding the volatility of commodities?
And on Zambia, where are we on the post-default recovery and debt negotiation, and how concern is the Fund about the country's successful completion of the debt restructuring?
And on South Africa, could you talk about -- just provide updates given last month the country increased rates and given the fiscal burden that the country is facing and the low labor market, how concerned are you about the economic growth part of the country?
And my last question, sorry, is the Fund -- if you could provide which African country is most likely to exit the fund program next? Thank you.
MS. KOZACK: To which African countries are most likely to need a Fund program? Is that what you're asking?
QUESTIONER: No, to exit.
MS. KOZACK: Okay, let me take these. So, on Angola, so maybe just to update where we are. Just in May, so last month, our Executive Board completed the 2026 Article IV Consultation for Angola, and in this particular case, the Article IV was also accompanied by the FSAP, the Financial Sector Assessment Program. It provided also a comprehensive assessment of Angola's financial sector. What we have seen in Angola is that growth has been holding up. Overall, it was around a little over 3 percent in 2025. But there has also been -- it has been accompanied by a significant decline in oil production in the country.
When we look to the medium term, this kind of structural decline in oil production means that the medium-term growth outlook, at the moment, it looks subdued, and it highlights the need for Angola to continue on the path of economic diversification to diversify the economy away from dependence on oil production.
Maybe also to just say that inflation in Angola has been on the high side. It has declined from -- it was about 20 percent in 2025. We expect it to come down. The latest reading we have was from May, when it was 10.9 percent, and that the tight monetary policy is helping to reduce inflation in Angola. And so, that's what I have on Angola for you.
Then on Zambia, Zambia successfully concluded its 38-month ECF program at the end of January 2026. So, a few months ago. And I can say there that throughout the program, the authorities demonstrated strong ownership of the reform agenda. Program performance was good, even against the backdrop of recurrent shocks such as a severe drought and a lot of uncertainty globally. So, the Zambian authorities deserve credit for their strong performance under the program. We did have a team visit Lusaka in early May, and that mission was to advance discussions on a successor IMF arrangement. So essentially, the Zambian authorities have requested another program. We will resume negotiations and discussions on that new program after the Zambian elections.
And on the question on -- well, maybe to say two other things on Zambia. One is that we see the overall economic outlook as positive. We project growth to be 5.8 percent in 2026. And we do expect inflation to come down and converge toward the Central Bank's target of 6 to 8 percent. And finally, on debt, we assess debt to be sustainable, but the country does remain at high risk of debt distress. So, continued implementation of reforms and strong policies are going to be important for Zambia.
And then maybe just briefly, on South Africa. So on South Africa, maybe just to say a few words about growth. What we do see in South Africa is, like in many countries, that the war in the Middle East, you know, had challenged South Africa's economic recovery. We, in April, we projected growth to be about 1 percent in 2026 because of higher oil prices. We do expect growth to recover to 1.3 percent in 2027. And of course, that was in April. And of course, you know, we will be providing a revised projection for South Africa on July 8th.
On the inflation side, because you asked about monetary policy, we project inflation to increase this year, headline inflation to increase to 3.9 percent due to higher oil prices. As oil prices kind of normalize and subside, we would expect inflation to decline gradually to the SARB's new inflation target of 3 percent over the -- over the medium-term. On monetary policy, it's like in many other countries, it's going to be critical for the central bank to really remain laser-focused on keeping inflation expectations anchored.
And then maybe turning to your last question, on which African countries do we expect to exit IMF programs? This is really a choice for the authorities to make. And so, as programs are being implemented, some are coming to an end, like we saw, we just discussed in Zambia. It's really a question for the authorities how they want to continue to engage with the Fund. In some countries, like Zambia, they've requested a successor arrangement. Other countries may request a non-financing arrangement, and others may choose to simply exit the program. In all of those cases, we work with the authorities, and we stand ready to assist them in whatever way they think is most helpful for their country and for their people.
QUESTIONER: Okay, thanks. I want to turn to Iran, the Middle East, and the global economy. Just a week or so ago, Kristalina wrote a blog that was presented, then of course discussed it at the G7 meeting, in which she said there were no signs yet of a global slowdown, right, which seemed to me and seemed to others to be sort of a change from the kind of dire warnings that we heard in April. It's been a while now since that agreement was signed, and it is proceeding carefully. The traffic in the Strait of Hormuz has changed. Can you give us a current assessment?
And you know, with an eye to the updated WEO that's coming in July, are you expecting there then to revise your -- do you have an assessment? You had three scenarios. You had a reference scenario, an adverse scenario, and an extreme scenario. Are you eyeing one of those scenarios now or something in between?
And finally, the situation in Lebanon is still very difficult. Can you give us an update on what's happening in the discussions there and whether you're any closer to a program potentially with the Lebanese? Thank you.
MS. KOZACK: Okay, very good. Before I go answer, does anyone else have questions on the global economy? Please go ahead.
QUESTIONER: Thank you, Julie. Just a quick follow-up on the prior question, more specifically, perhaps on the most affected countries in Sub-Saharan Africa or in Asia. What would be, according to the IMF, the long-term or medium-term effect of the energy shock for those countries? And what do you expect on that side? Thank you very much.
MS. KOZACK: Okay, anyone else on global economy? Okay, let me take these two.
So I think what we've seen is, and as we've said, that the war in the Middle East has tested yet again the resilience of the global economy. What we said in April, in terms of the way we were assessing the implications for the global economy, we were looking at three channels, and that still remains the lens through which we're making our assessment. So those three channels included commodity prices, particularly oil prices, it included second-round effects on inflation and inflation expectations, and financial conditions. We also were very focused on the uneven impact of the war with countries, many of which were in Africa, are in Africa, being the most vulnerable to the impact because those countries, many countries were net oil importers, and they had limited fiscal space or limited buffers to respond to the crisis. And so that still --those -- that kind of framework for making the assessment still very much holds.
Now, of course, the cessation of hostilities and the path toward reopening the Strait of Hormuz is very welcome, as is the ceasefire. And if it's sustained, it of course will support the global economy.
So maybe, maybe just to give a little, a few more details on the commodity price side, one of the channels where we were quite focused, what we've seen right now with oil prices is that they have fallen from their peaks and they're now about 10 percent above their pre-war levels. We've also seen declines in other commodity prices as well, which were having an effect on functioning’s or were disrupting economic activity. In many countries, for example, jet fuel prices have declined, but they still are a bit higher than they were. They were still higher than they were before the war. Natural gas prices have also fallen. Base metal prices have started to fall. So we do see in many cases declines in commodity prices, including in urea and some fertilizer prices.
So that's, I'd say, you know, we're seeing some action on the price side in commodities. But we also know that that it is going to take time for full normalization because it takes time for ships to move out of the Strait to reach their destination, and then for, you know, whatever they drop at the ports to be transported to final destinations and to end-use consumers and firms. So this means that, you know, there will be some time before we reach kind of like a go back to a normal state. And of course, that all assumes that the ceasefire remains in place.
Now, on the other two channels, you know, we also have the channel of inflation and inflation expectations. We have seen some central banks take action to, you know, to raise rates. Others are staying on hold. In general, we have seen that inflation expectations have remained anchored, but we're continuing to recommend that central banks remain vigilant to any de-anchoring of inflation expectations.
And then the final channel is the financial conditions. And of course, they have remained quite accommodative, not only in advanced economies but also in emerging and developing countries where we do see that spreads are quite compressed, quite low, and financing has been available for, for these countries. So, we do see countries being able to issue in international markets.
So that's kind of the broad picture of how we see the differentchannels. And of course, we're going to have much more to say on July 8th when we release the WEO update. And that will, of course, contain the full set of projections in terms of the countries that are most affected.
I would just leave it in the way I described it, which is it's really where we're most worried, are countries that are net energy importers and that have limited buffers, fiscal buffers, or other buffers like stockpiles of oil reserves and things like that. That's where we've seen real differentiation. And so, we continue to focus on how we can best support that part of our, of our membership.
And then, you also asked about Lebanon, so let me provide where we are with Lebanon while you're looking.
QUESTIONER: I'd also asked if all three of the scenarios were still in play.
MS. KOZACK: Oh. So I think that I'll leave for the WEO Update. Basically, the WEO Update will give you a sense of where we are in terms of how we want to present now, the global outlook, and whether it makes sense to still have scenarios or to converge to something that looks more traditional, like a baseline. So I'll leave it for the WEO Update
On Lebanon. Let me start by saying that Lebanon faces a very challenging economic and social humanitarian situation with the resumption of the war. And this is creating, of course, a significant human toll in Lebanon. There's damage to housing, infrastructure, and economic activity. But the full impact of the conflict will only be known over time. And of course, the full impact is going to depend on the duration and intensity of the conflict. At the moment, we think that GDP will contract in 2026, given the impact on key sectors for the Lebanese economy like tourism and agriculture, as well as kind of broader confidence effects and uncertainty effects. So that's how we see the overall picture for Lebanon.
I can also add that we're closely engaged with the Lebanese authorities. We're looking at key economic crisis management measures and how those measures can be taken to mitigate the impact of the conflict on the economy. Lebanon had strengthened its fiscal and its international reserves position earlier. So that is providing some room to provide policy support to address the most pressing humanitarian needs in the country.
And then, in addition to this, we're continuing to engage with the Lebanese authority on a more comprehensive reform program that could be supported ultimately by an IMF program. Those discussions have mainly been focused on the authorities' restructuring strategy for the banking sector and their medium-term fiscal strategy.
So, the bottom line on Lebanon is it's a very challenging situation. We are closely engaged with the authorities on two fronts. The first is helping them look at economic policy measures that can address the immediate crisis, but then also keeping an eye to the longer term, where they still have very big needs in the banking sector, and to develop a medium-term fiscal strategy.
QUESTIONER: How soon are we looking at any kind of movement on that?
MS. KOZACK: I mean, the discussions are ongoing, so I wouldn't want to speculate exactly on when we might wrap those up.
Questions on the U.S.? Let me go to some of the others who haven't come in yet. I think you had your hand up in the back. And then I do need to take a few online.
QUESTIONER: Good morning. How do you see current U.S. economic situation, especially elevated inflation? Do you think the Federal Reserve should do rate hike in this year? Thank you.
MS. KOZACK: Well, since U.S. -- you can - we'll go here on the U.S.
QUESTIONER: All right, thank you. So, my question sort of relates to what he just asked. The new Fed chair, Kevin Warsh, held his first conference last week announcing that it will keep the rates. I guess I wanted to get the IMF view, given that the U.S. dollar is the most used currency, and the impact that we continue to have on the global economy. Thank you.
MS. KOZACK: Okay, very good. All right, let me go ahead with the U.S. Maybe just to say on the U.S. economy more broadly, growth momentum in the U.S. economy has been solid. The first quarter growth numbers they were numbers released this morning, which were stronger than the kind of preliminary estimate. I think they were 2.1 percent for the first quarter. We saw government consumption bounce back in the first quarter of 2026 following the government shutdown in late 2025. We also see strong investment in the U.S., and that investment is also leading to strong imports of capital goods in the U.S., as we've, I think, mentioned here before. Labor productivity continues to be very strong in the U.S., and that's an important distinguishing factor for the U.S. because in many parts of the world, we've seen weak productivity growth, and the U.S., in that sense, is a bit of an outlier globally.
With respect to the Fed's decision last week, we do see, you know, inflation is still above target, even though we do expect it to come down to reach the 2 percent target by the end of 2027. We do -- because of this dynamic, we think the Fed appropriately decided to keep the policy rate on hold. Any further policy actions by the Fed will need to proceed with caution, and they would need to be carefully calibrated to the incoming data. And of course, we welcome Chairman Warsh's strong commitment to lead the FOMC in delivering price stability, something that he strongly emphasized.
All right, let me now go online. We have a few questions online. Why don't you go ahead?
QUESTIONER: I wanted to ask the IMF's stance on the latest IMF review, which has the IMF and Ukraine reached the Staff–Level Agreement, but there has been some slippages in reforms since one of four tax bills has been voted and only one of them was signed and turned into law. So, taking into account these slippages in tax reforms, what is the IMF's stance on the future negotiations between Ukraine?
MS. KOZACK: Okay, thanks, I think I also have someone online if you are there.
QUESTIONER: Hello to everybody. Thanks for the opportunity. I wanted to ask you, when is the IMF Executive Board expected to consider Ukraine's First Review under the EEF program and the disbursement of the second tranche? Thank you.
MS. KOZACK: Okay, anyone else on Ukraine?
Okay, so on Ukraine, a Staff–Level Agreement between the IMF staff and the Ukrainian authorities was reached for the First Review of the EFF, was reached on June 12th. Subject to approval by the IMF's Executive Board, Ukraine would have access to U.S. $690 million, and that would bring total disbursements under this program to U.S. $2.2 billion. The Board is expected to consider this review in the coming weeks.
And then on the question -- on the revised kind of timeline. So as part of discussions for the First Review, the IMF staff and the Ukrainian authorities agreed on a revised timetable for the implementation of structural reforms. They also agreed on corrective actions to address some of the recent slippages to help keep the program on track. The revised reform timetable primarily concerns reforms in the areas of governance, anti-corruption, and institutional reforms. And then there's also some broader structural measures to help support Ukraine's market-based economy.
And we'll, of course, have more details on the precise nature of the reforms and the revised timetable following board approval and after publication of the staff report.
All right, let's go online.
QUESTIONER: Good morning, fellow colleagues. Thank you so much for taking my questions, Julie. As we know, we are in discussions as the Egyptian government and the IMF regarding the Seventh Review of the ongoing EFF Loan program. So, can we expect the Board of Directors to decide on the completion of this review soon? Especially, we primarily know that the IMF scheduled the Seventh Review completion by mid June. But we haven't heard any news about the ongoing discussions regarding that. And if we expect a delay or a combine of the Seventh Review with the Eighth Review of the program, which is the final one of the EFF program.
My second question is on the recent developments in Egypt regarding the economic performance. Egypt has announced new tax reforms, announced a unified duty stamp for the listed company shares, in listed of the capital gains and other investments from the Gulf countries to establish or create new residential projects in Egypt. To what extent these developments could push forward the discussions for the port reviews of the loan program? Thank you, Julie.
MS. KOZACK: Okay, great. Thank you. Anyone else want to come in on Egypt? All right, very good.
What I can say is that discussions on the Seventh Review of the EFF and the Second Review under the RSF are progressing. Following the IMF mission that took place in May of 2026, it is still our objective to hold the Board Meeting, to hold Board Meetings this summer. And this would enable a disbursement of about U.S. $1.6 billion to Egypt.
Now with respect to some of your other questions, on tax and divestment, what I can say on taxation, and overall revenue mobilization, we very much welcome the authorities' continued efforts to strengthen domestic revenue mobilization. This is important to create fiscal space for priority social and development spending. So, it's important to raise revenue so Egypt can meet its social and development needs with the appropriate government spending. Broadening the tax base, improving the efficiency, fairness, and transparency of the tax system are important elements of Egypt's fiscal reform agenda.
And then similarly on the divestment strategy, we're continuing to engage closely with the authorities on advancing the implementation of the state ownership policy, including through the asset divestment program. This remains, as we've discussed here before, very important for reducing the state's footprint in the economy and to supporting private sector-led growth in Egypt. So, both of those areas that you mentioned are very important for Egypt.
All right, let's go.
QUESTIONER: Hi, Julie. Thank you for taking our question. An IMF delegation is already in Sri Lanka for the upcoming review, and Sri Lankan authorities are now claiming that they are paying high prices for energy imports. Is there any plan from the IMF to support Sri Lanka's energy security amidst the ongoing IMF-supported recovery program? Thank you.
MS. KOZACK: All right, thanks very much. I don't think there's any other questions on Sri Lanka.
Okay, so just to confirm that we do indeed have a team currently in Sri Lanka. This is a staff visit that will take place during June 24th through 30th. The team is engaging with the authorities on a broad -- on a broad range of stakeholders to take stock of recent economic developments, right? Including obviously the impact of the war in the Middle East and the energy price shock. And the team will also be looking at Sri Lanka's economic reform program and the performance under that program. The team plans to communicate its findings at the end of the mission. At that point, that's where you'll get the full picture on how the team has assessed the impact of the energy shock that you referred to.
All right, let's go to the question on Ethiopia.
QUESTIONER: Good evening, Julie. So my question is --
MS. KOZACK: Thank you for joining.
QUESTIONER: Thank you. My question is the program has introduced nine performance-based disbursement, excluding the initial transit, until June 18th. So, for the future review, it has now been completed. Should we expect a secondary ECF review disbursement as a scheduled, or would there be a replacement for IMF for the next disbursements?
My second question is, one of the things that's happening now is Ethiopia is very highly dependent on imported energy fuel. So, the possibility of rising the subsidy cost and these are the shocks that are expected in the coming years. So, with the IMF Board, Executive Board, be willing or be to schedule some of the Seven, Eight and Ninth Review disbursements to the next one, will there be any chance that this disbursement will be made early? Thank you very much.
MS. KOZACK: Okay, thank you. So, on Ethiopia on June 3rd, IMF staff and the Ethiopian authorities reached a Staff-Level Agreement on the Fifth Review of the ECF. And subject to Executive Board approval, Ethiopia would have access to about U.S. $468 million. And that would bring total IMF financial support under the ECF arrangement to around U.S. $2.6 billion. We do expect the Board Meeting for this review to take place on July 1st.
And as you mentioned, the Fifth Review is also aiming to rephase disbursements under the ECF. So, the review is planning to bring forward $200 million to help Ethiopia respond to the economic impact of the war in the Middle East and the energy shock. Total access under the program remains unchanged at the original U.S. $3.4 billion. So, we've just brought forward some of the disbursements in terms of the details and what could happen going forward.
I think there, I will just wait until the Staff Report comes out. It will be published following the Board Meeting on July 1st. And that will contain in it the revised disbursement profile for the remainder of the program. And of course, as the program continues and moves forward, staff will use the opportunity of each program review to assess with the authorities what are the financing needs and how can the program best support and ensure that those financing needs are being met for Ethiopia.
I'm going to take maybe one more question online, and then we will wrap up. I see you have another couple of questions, so why don't we take your question?
QUESTIONER: Thank you, Julie. It's about Kenya. Last we heard in April, there was concern about the path of fiscal consolidation. I want to know if you could please give us an update on where that those negotiations are, if there's a program that we should be expecting anytime soon, and if you can update us? I know there was something on Senegal earlier this week, but if you can add a little bit more to what came out of that visit, and tell us where the situation is with the Senegal program. Thank you.
MS. KOZACK: Okay, so these will be the last, but let me ask if there's anyone else on Kenya or Senegal.
QUESTIONER: Indeed. Yeah, just wanted to know if you -- regarding the debt misreporting situation, if the discrepancy has now been fully reconciled on your side? And what is the IMF's view on potential risk for sovereign debt by Senegal, and perhaps, if you could give us a timeline on the ongoing negotiation about the program? Thank you.
QUESTIONER: Thank you. On Kenya, if you have an update on when Article IV Consultation discussions might take place, if there's a staff mission in the next few months, or if you have any specific dates? And on Senegal, I understand that this last mission was more a fact-finding mission and not so much of a program negotiation mission, but the government publicly seems more open to adapt restructuring. They haven't confirmed they will move forward, but they're more open to the idea if it's needed. Is this something that they have expressed to the IMF authorities in this last mission? And what can you add on that? Thank you.
MS. KOZACK: Okay, and then I have more online, who also have follow-ups.
QUESTIONER: My question is fairly straightforward. I know we had finished a Governance Diagnostic report with the Kenyan authorities sometime last year, but that has not been made public so far. What reasons are the Kenyan authorities giving for not giving their consent in order to make that governance diagnostic report public six, seven months on?
MS. KOZACK: Okay, thanks. And then you have the last word.
QUESTIONER: Thank you. A bit of a step back question on Senegal. I'm wondering if there's anything more that you can share at this point on the misreporting and how the discrepancies went undetected for so long, and under a program, and more broadly, if there are any early indications on the methodological or operational changes the Fund is considering in response to this case. And maybe, also on the recent statement, you said the decisive action is still needed towards resolving this case. What specific steps are still required before the case can be brought, before the Executive Board, and the waiver can be approved or declined?
MS. KOZACK: Okay, very good. So let me start with Kenya.
So maybe just to say that I think, as everyone knows, the Managing Director visited Nairobi on May 11th and 12th for the Africa Forward Summit. And during that visit, she had a productive meeting with President Ruto and the Kenyan government and another meeting with Kenyan civil society leaders. In that meeting, the Managing Director reaffirmed the IMF's commitment to supporting Kenya's economic reforms and progress for the benefit of the Kenyan people. And she offered our support through policy advice and technical assistance in order to safeguard macroeconomic stability and debt sustainability, strengthen governance, and promote inclusive and sustainable growth for Kenya. We are engaging with the authorities on the timing for the next Article IV. And of course, we'll share an update for you when we have one.
And then on the governance diagnostics, we have shared the draft of the Governance Diagnostic Assessment Report with the authorities, and we are awaiting their comments. As with all of these reports, the report will be published following further consultations and, and it is subject to publication, is subject to consent of the authorities. So just to make that clear.
And then on Senegal, here, I can say that we remain engaged with the Senegalese authorities on their request for a new program. Technical discussions are continuing, and the idea is to reach a shared understanding on the macroeconomic outlook, Senegal's financing needs, and their reform. The authorities' reform priorities, all of these are sort of key elements of any IMF program. As was mentioned, a staff team visited Senegal last week and held constructive technical discussions with the authorities.
Now, on some of the other questions, I think it's fair to say, well, we know from the statement that the team, when they visited Senegal, they welcomed the authorities' continued engagement and their commitment to addressing the vulnerabilities that were revealed by the discovery of the hidden debt in Senegal. And these included reforms that the authorities took in areas to strengthen public financial management, to strengthen fiscal governance, and also to strengthen transparency.
So I think the first point, on the broad thinking about how to address the hidden debt, is that there have been significant steps taken by the authorities. They've conducted successive audits of public debt, and there's been institutional reforms to unify Senegal's debt management functions. So those are some of the critical corrective measures that have been taken. We did note that further decisive action will be needed and important to support progress. And these could be some of the areas that we're looking at are the launch of an audit by a private international firm, completing ongoing and comprehensive audit of payment arrears, and measures to strengthen the budgetary commitment controls. So, these are some of the further measures that we are encouraging.
And then on the question on debt here, what I can say is that, Senegal does continue to face significant debt challenges. Total public sector debt is estimated at 132 percent of GDP. That was at end 2024. But despite this very high level of public debt, the authorities have remained current on their debt obligations.
And I think I will leave it at that for today. Thank you very much to all of you who've come.
This concludes our press briefing. 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. If we did not have time to get to any of 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.
And I wish you all a wonderful rest of your day. Thank you.
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