Speaker: Ms. Julie Kozack, Director of the Communications Department at the IMF
*****
MS. KOZACK: Hello, everyone. 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 IMF's Communications Department. As usual, this press briefing is embargoed until 11:00 a.m. Eastern Time in the United States.
I'll start with a few announcements and then take your questions in person on Webex and via the online Press Center.
First, IMF Managing Director Kristalina Georgieva will visit Argentina and Uruguay later this month. During her visit, she will hold meetings with government authorities and other key stakeholders.
First Deputy Managing Director Dan Katz is concluding his trip to Brazil. During the trip, he met with Brazilian authorities, private sector representatives and other stakeholders to discuss economic developments and priorities.
The First Deputy Managing Director will travel to South Africa from August 4th through 6th for meetings with the authorities and representatives of the private sector.
For those of you who may have missed it, yesterday we released the July WEO Economic Outlook Update. The update, related blog and press conference transcripts are available on IMF.org.
And finally, a reminder that registration for the 2026 IMF and World Bank Group Annual Meetings, which will be held in Bangkok, Thailand, from October 12th through 18th, is now open. Please register through IMFConnect.org. If you need a visa to enter Thailand, please do make sure to register for the meetings no later than September 1st, 2026.
And with that, I will now open the floor for your questions. For those of you connecting virtually, please turn on both your camera and microphone when speaking.
And so, the floor is now open. Okay, let's start with you.
QUESTIONER: Good morning, Julie. I wanted to know if you could provide us an update on the estimates of total demand of financing. The IMF said back in April that there will availability of a range of between $20 billion to $50 billion on financing. And I know that in the previous press conference you said that mainly the countries are asking for policy advice, but of course, this conflict in the Middle East gives us news every single day or week. So, just wondering if you have an update on the number or something else that you could provide us.
And on monetary policy, yesterday, during the press conference on the WEO [update], it was implied that the IMF plans to engage with Central Banks in coming months on changes in the way they use forward guidance on monetary policy. Can you elaborate on that? How will the IMF be involved? Is it something that the MD plans to discuss during Jackson Hole meetings in August? Thank you so much.
MS. KOZACK: Okay, thank you. Maybe before I take these questions, are there any other questions on either of these topics? Kind of IMF financing in general, not specific countries, but our response to the war in the Middle East or Central Banks.
QUESTIONER: Hi. Thanks, Julie. I know you just yesterday released the WEO [update] and it's, you know, better than what it was looking like in April, but today we're back, you know, we're back at attacking each other in the Middle East. Oil's back up, but it's not up where it was. It's still, you know, Brent's still around $80 or maybe even below. So, you know, I'm just wondering if you can give us an assessment of sort of what it will take to sort of shift that forecast to a lower level. You know, have you baked in some, you know, potential sort of flare-ups here and there that maybe don't reach a full-scale return to the conflict we had back in March and April? Thanks.
MS. KOZACK: Okay, on these topics, right?
QUESTIONER: I guess my question is on the forward guidance. Last month, the ECB had a forum in Portugal where that was one of the topics that was discussed during that event. So, my question to the Fund is giving last during the Spring, the Managing Director emphasized, as well as the previous director for the economic research also emphasized three different scenario. So, I guess this is in line with what they are talking about rather than saying, okay, this is the forecast. So, are we going to see more of that from the IMF, given the report that came out yesterday, and then on the heel of that report, on what is going on in Iran as well?
MS. KOZACK: Anyone online want to come in on any of these topics? Okay, so let's start here.
So first, with respect to IMF lending financing and our response to the war in the Middle East, I would say what we talked about a couple of weeks ago still remains the case. It still is the case that most of our members are coming to us to ask for support in the form of policy advice and capacity development. It also is the case that many of the countries that we have assessed to be most vulnerable to the commodity price shock from the war in the Middle East already, many of them already had IMF supported programs.
And so, our support for them in terms of policy advice, a macroeconomic framework and financing is being done within the existing. And I think we've talked in the past about how, in some cases, we have made adjustments to financing either through augmentation or rephasing. And so that is still the way in which we are supporting our membership. But maybe just to restate the obvious, which is of course in an uncertain world, you know, we are ready to, of course, use all of our tools to help support the membership in the way, in the way that they find most useful for them as they navigate these economic challenges.
Maybe I'm going to go to the global question, and then I'll come back to the forward guidance and scenarios. So, on the global economy, as you said, we did just release the World Economic Outlook yesterday and maybe to just give the high-level message and then talk a little bit about the assumptions underpinning the update.
So overall, we've seen that the global economy, you know, has been resilient. It's faced many shocks over the last several years. It has weathered the shock of the Middle East war as well. That said, we have also been emphasizing very much over the last few years the role that uncertainty is playing in the global economy, and that the global economy has been actually resilient in face of very high uncertainty. But we still anticipate that uncertainty will remain elevated.
Why has the global economy been resilient, particularly over the last year or so? There's sort of two factors that are pulling on the global economy, and I would say maybe since the war in the Middle East started, we have the negative supply shock from the war, which has pushed up commodity prices, particularly energy, fertilizer and food prices. And then on the other side, we have a positive kind of demand and productivity shock, which is coming from the technology cycle and particularly AI-led investment.
So, there's two forces that are pulling the global economy and somewhat in different directions. And the overall impact has been a resilient global economy. We've emphasized also that the impact has been asymmetric, and we talked about our support and that we do see a number of countries, particularly commodity importers, with limited fiscal space. Those countries have been hardest hit by the negative shock, and they have, in a sense, not been as strong beneficiaries of the positive shock.
Now, in terms of the July WEO update, maybe just to say, the one assumption is that, so maybe just to step back, when we do our world economic outlook, when we prepare them, we start with a set of assumptions and those assumptions are global and they're used by all of our country teams so that we get a consistent forecast across all of our country teams and then we aggregate that forecast.
So maybe two key assumptions in the July WEO update. One is that we assume that the Strait of Hormuz starts to open in mid-July. So that's one part of the assumption. And the other is that the average oil price assumed for 2026 is $89 a barrel. So those are the assumptions that have gone into the July WEO update. And of course, as we look at the current situation, what's happening in markets, in oil markets, in other commodity markets, in transit through the Strait of Hormuz, we will be reflecting on how that might affect the global economy going forward. But just to give you a sense that the assumptions underpinning the July WEO are the ones that I outlined, right? So, they don't assume that we go back immediately to sort of the pre-war status or state of play.
Now, on the question of forward guidance, what I can share is I would say that our view is that forward guidance has been a useful element of Central Bank playbooks, especially in the earlier period where monetary policy interest rates were at what we call the zero lower bound. So essentially, policy interest rates were at zero. And you'll recall that this started shortly after the global financial crisis. And at that time, forward guidance was particularly useful. But it's also very natural to assess whether there is, whether circumstances have now changed. We're no longer at the zero lower boundaries. And also, it's natural for Central Banks periodically to step back and assess whether their communication modalities need to be adjusted as circumstances change.
With respect to the Fed in particular, they have talked about setting up a task force to look at communications, and we very much look forward to engaging with them on the findings of the task force and on their thinking about how communications can be adapted.
And then maybe Kemi, on your question on scenarios, I think this is a really important point because in a world that is very uncertain, the use of scenarios can be very important devices to help quantify and explain a bit different potential outcomes under different conditions. And so, I would make two points. One is that it certainly makes sense for Central Banks to use scenario analysis if they find that useful. And from our perspective, we have been using scenario analysis for quite some time. In the April WEO, we put the scenario sort of front and center. But even in previous World Economic Outlooks, we would have a baseline, but we always had scenario analysis or for many years now, we've had scenario analysis, because we do recognize that in a world that is more uncertain, having scenarios describing the different potential outcomes can be useful to our membership as they think about how to adapt their policies.
QUESTIONER: Good morning, Julie.
MS. KOZACK: Good morning.
QUESTIONER: Thank you very much. Following the IMF recent staff visit to Senegal, to Dakar, and the recent government reshuffle, how does the Fund assess the Finance Minister's current stance on debt management? While there are signals of a pragmatic approach, there remains strong domestic political resistance to a formal debt restructuring. Is the IMF still conditioning a new program on a comprehensive debt overhaul? Or I can put it in a model through approach with multilateral guarantees, a viable alternative for the Fund.
Second and short question, given the current fiscal deadlock, the lack of a full cabinet, and the deep gap between the IMF's growth projections and the government's targets, how realistic is the timeline to finalize a new Staff-Level Agreement before the IMF World Bank Annual Meeting in October? If positions on fiscal consolidation and structural reforms remain frozen, what is the risk of Senegal missing its upcoming coupon payments without the unlocking of concessional financing?
MS. KOZACK: Okay, thanks. Does anyone else want to come in on Senegal?
QUESTIONER: I was wondering if you could add a comment on Senegal [which] is now looking for new financial advisors. I know, of course, this is a sovereign decision and doesn't have to do with the IMF remit, but she's wondering if the country has reached out to the IMF to try to assess that situation again. I know that the communications are fluid, but just trying to understand if it's the case. As it was mentioned before, there are so many different views inside the government of what they're supposed to do with the situation. Is that reprofiling instead of restructuring with a haircut on the table of the dialogue with the authorities? Are they trying to approach the situation in different ways and asking the IMF for advice or for their point of view? Thank you so much.
MS. KOZACK: So, on Senegal, this is what I can share. So first, I just want to say that our new head of the African Department, Zeine Zeidane, visited Senegal from July 3rd through 6th. He had discussions with President Faye, Prime Minister Lo and the Senegalese authorities. And Mr. Zeidane's visit follows a recent IMF staff visit, and it reflects our continued commitment to supporting the authorities, the Senegalese authorities and their efforts to address their challenging debt situation. Discussions have remained focused on reaching a shared understanding of Senegal's financing needs and reform priorities that could underpin an IMF-supported program. Technical discussions between the authorities and our team are continuing.
Maybe also just to add that Senegal does continue to face significant debt challenges. We do, and we commend the authorities for their commitment to transparency, especially in addressing the hidden debt issues they've disclosed, hidden debt, they've strengthened fiscal governance. And these are very important steps to addressing some of the underlying problems that led to the -- to the hidden debt.
And maybe on some of the other questions, in terms of a potential timing for a Staff-Level Agreement, as I said, the discussions are ongoing, the commitment is there, and so it would be premature for me to speculate on potential timing. But we'll be sure to keep you updated when we have more to say on that.
And on your question, as you said, this is indeed a matter for the authorities, if they would like to engage a financial advisor. And similarly, decisions on how to address Senegal's debt challenges are really for the authorities. I think our job at the IMF is really to help the authorities understand or help present, to present them with our best assessment of the macro economy and what the implications would be for the debt level.
QUESTIONER: Hi, Julie.
MS. KOZACK: Good morning.
QUESTIONER: I would add about the trip of the MD to Argentina. What other details can you provide about that visit, which is the specific purpose and why was it decided that this was a good time to finally make this trip to Buenos Aires? And other one other question is, which is the IMF's assessment on the financial program through this year and 2027, presented by Minister Luis Caputo this week?
MS. KOZACK: Okay.
QUESTIONER: Good morning, Julie. A little more about MD travel to Argentina. When exactly is she going, for example, on all of the questions that my colleague asks? And also, a little more about the designation of the Argentinian Economist Silvana Tenreyro as the Chief Economist, since she's from Argentina, will she have any kind of role in the IMF program with our country? Thank you.
MS. KOZACK: And then, on Argentina, anyone else in the room on Argentina? Okay, let's go online.
QUESTIONER: Hi. Good morning. Sorry, I was shut down. Following with the question of my colleagues in the visit of Kristalina Georgieva to Argentina, is she planning to see, in particular Ministry of Capital Humano, which is called here Capital Humano, all the social programs that are implemented and also with the Ministry of Regulation. And it's going to have meetings as usual with the Central, the Labor Central. Sorry, the trade union. Sorry. And also with the private sector.
MS. KOZACK: Okay, thanks.
QUESTIONER: Hello, Julie. Good morning. Also going to join my colleagues on the visit as well. But also, I was wondering, according to the financial program, there is no return to the international markets next year. What's the IMF's take on that? And also, on the central bank charter reform, the changes that are being announced, if they have been -- well, they have been discussed with the IMF. This is the direction that was discussed, kind of like limiting monetary mission and restricting treasury financing. And that's it for my part.
MS. KOZACK: Okay, thanks.
QUESTIONER: Good morning. Yes, my questions in the same line that my colleagues having in account, what is the IMF assessment of the program presented this week by Caputo, point that was specifically mentioned in the Second Review of the Extended Fund Facility program? What are the goals ahead of Kristalina Georgieva's visit to Argentina? And why did you decide to leave Argentina's growth forecast and change?
MS. KOZACK: Okay, anyone else want to come in on Argentina?
QUESTIONER : Julie, Hi. Just, I'm curious why? No, I mean, given the fact that Argentina is your biggest client, I'm sort of shocked and surprised and hadn't really realized that neither the MD had gone nor had any, I think MD gone for quite a while since 2018. Can you -- I realize there were, you know, plenty of meetings in other places, but, you know, why now? Why the timing now? And really, why wasn't there more visiting going on? The MD travels around the world, globally, all the time. Thanks. Just curious.
MS. KOZACK: Okay. So on Argentina, maybe I'll start with growth, then I'll get to and the question on the WEO, and then I'll talk a little bit about the financing strategy and the Central bank charter, and then I'll get to the MD visit.
So yesterday we did present the July WEO update, and it's true, our projections for Argentina were broadly unchanged. We continue to project growth at 3.5 percent, 3.5 percent in 2026 and 4 percent in 2027. And we also project that inflation is going to gradually continue to gradually decline in Argentina. So, this is essentially how we see the forecast at the moment. As we've said before, you know, Argentina is a net energy exporter and that has helped to support the economy through the shock in the Middle East.
Now, turning to some of the other issues on the comprehensive financing strategy, we welcome its publication. Greater transparency and predictability around public sector financing and reserve accumulation will support market confidence. And here I would say that Argentina's spreads narrowed further after publication. And this financing strategy, we also see it as supporting Argentina's efforts to durably regain market access, maintaining flexibility on the timing and modalities of market reentry. That will further strengthen credibility in Argentina.
We also support the authority's intention to reform the central bank charter. Such a reform would strengthen institutional safeguards of the central bank that protect its policy independence. It will clarify the central bank's mandate. It will enhance accountability and transparency, and it will reduce vulnerabilities to what we call fiscal dominance, which is essentially a situation where the central bank is providing financing to the government, so that it's important to reduce those vulnerabilities in Argentina.
And all of these efforts, including a reform of the central bank charter, are intended to support, you know, the durable decline in inflation, right? To really bring in, help support that decline in inflation in Argentina, which is, of course, a key priority.
And then finally, as announced yesterday by Minister Caputo and which I just mentioned, the Managing Director will visit Argentina on July 28th and 29th. She looks forward to meeting President Milei, the economic team and other stakeholders.
So, I think there were some questions on who precisely she's going to meet there. We're still putting together the exact schedule. We know she'll meet President Milei and the economic team, but she will have other meetings with other stakeholders, including those, you know, beyond the government. The visit reflects our close and constructive engagement with Argentina, and it will provide an opportunity to exchange views on the country's progress, challenges and opportunities.
I would say all of these visits that our Managing Director does, she travels, you know, to many of our member countries. they are a wonderful opportunity for her to really hear views from the people of Argentina and their different interlocutors.
And then, Andrea, maybe on your question, I think I would only say that obviously we, from 2018 until now, we had the pandemic period, which significantly interrupted all travel. And then just to remind everyone that our previous first Deputy Managing Director, Gita Gopinath, I believe, visited Argentina in January, I think it was January 2024. So, there has been an interim visit by senior management at the IMF.
All right, let's continue. Let's go in the back.
QUESTIONER: Hi, Julie, just real quick, the question of why now? Why is the MD going now?
MS. KOZACK: Oh, why now? I mean, I think scheduling, as always, I would say, I would put it really to this was the right time that worked with everyone's schedule. And it's also an opportune time for us to take stock of the progress made under the current program with the Argentine authorities.
QUESTIONER: Good morning. A couple of questions on Lebanon. Can you provide an update on discussions on where things stand with the potential economic program there? The Prime Minister yesterday said the country is still determined on achieving one. And with President Aoun visiting D.C. later this month, is it the expectation that there will be in-person discussions in D.C.? Thank you.
MS. KOZACK: Anyone else want to come in on Lebanon?
Okay, so on Lebanon, what I can share is, I mean, the ongoing conflict has further exacerbated Lebanon's humanitarian and already fragile macroeconomic situation. The full impact of the conflict will only be known over time. And I think as we've discussed here, when we kind of look at the economic impact of the conflict, there has been physical damage to housing and infrastructure, but also to key sectors like tourism and agriculture, as well as remittances.
So, in terms of our engagement with Lebanon, in this context, we're engaging in two fronts or on two tracks. So first, we're discussing with the Lebanese authority’s economic crisis management measures to help mitigate the impact of the crisis and of the conflict on the economy. And so these include fiscal measures to address some of the immediate needs that the people of Lebanon may face. And Lebanon coming into the conflict did have a strengthened, a stronger fiscal position and a stronger international reserve position. So that has provided some breathing space for the Lebanese government to provide some of this immediate support, immediate crisis support. So that's one track of our discussions.
And then the second track is related to the program. So, as you know, the authorities requested a program in March 2025. We've had several missions to Lebanon to discuss the program and to help design a comprehensive reform program that could be supported by the IMF with an arrangement, and also that would support Lebanon's durable recovery. Those discussions on the program have primarily focused on the banking sector restructuring strategy and the authority's medium-term fiscal strategy.
So that's where we are in terms of our engagement with Lebanon. We remain in close cooperation, constructively engaged. And our ultimate goal is to help Lebanon navigate the very complicated economic and humanitarian situation that it's in.
Okay.
QUESTIONER: India is positioning itself as a major alternative manufacturing destination. Does IMF seize any meaningful diversification by international companies to set up their manufacturing base in India? I have one more question on China. Should I ask now?
MS. KOZACK: Go ahead.
QUESTIONER: Yeah. You know, despite various policy support measures, China's economic recovery remains uneven. How does the IMF sees as the biggest structural challenge that China is facing today for the next few years?
MS. KOZACK: Okay, very good. India? Yep. Or China? Yes, go ahead.
QUESTIONER: So yesterday, the WEO projected that India remains the fastest-growing major economy with growth projected at 6.4. But India aspires to be a developed nation by 2047. Do you think this growth rate is enough or what is the IMF view on that? Do we need to grow faster? And are any reforms that you suggest?
MS. KOZACK: Okay, very good. Any other questions on India or China? Okay, let's start with India.
So maybe just to say where we are with India, as you mentioned, India is one of the fastest-growing economies in the world. It remains a key engine of growth for the world. Our WEO Update that we published yesterday projects that the Indian economy is going to remain resilient with a more balanced risk outlook than we had in April.
Growth for fiscal year '26-'27 is projected at 6.4 percent. And if we look at -- and that's the same for calendar year 2027, rising to 6.7 percent in 2027.
Now, with respect to the 2047 question, maybe just to say there that achieving developed nation status would require India to continue to have very high, sustained, high growth levels over a long period of time and under a range of assumptions. So, for example, you know, we would have to look at things like population growth, currency movements, et cetera. But importantly, as you note, India would need to continue on the path of reforms. India has made significant progress in structural reforms in recent years.
Maybe a few examples include implementing a new labor code, concluding new trade agreements, advancing deregulation at the state level. So, I think for India to achieve this objective, we encourage India to build on this progress, further efforts to strengthen skills in the economy, to increase flexibility in the labor market, to reduce costs for businesses through compliance and regulation or costs associated with compliance and regulation, and to deepen trade integration. Those are some of the reforms that we see for India going forward.
And then on your question on manufacturing there, I can just say we do see evidence of supply chain diversification benefiting India. The gains so far have been concentrated in some specific sectors, most visibly in electronics. So, for example, India's electronics exports rose by 24 percent in fiscal year '25-'26.
Smartphones have become one of the country's largest export products, and much of this increase in production for exports appears to be happening through domestic contract manufacturers rather than foreign direct investment.
And then on your question on China, stepping back on China, what we presented published yesterday in the July WEO update, is that we project China's growth to slow from 5 percent in 2025 to 4.6 percent in 2026. Although that 4.6 percent that we published yesterday is a small upgrade relative to what we had in April. And we have been emphasizing for quite some time in our bilateral work with China in our Article IV's that we do see some significant structural challenges facing the Chinese economy. And these include persistently subdued domestic demand, particularly domestic consumption. And the flip side of that is rising external imbalances. We also see in China weakening productivity growth.
And finally, China faces demographic headwinds through population aging. So, from our perspective, the key priority for China is to transition its growth model from one that is export-led to consumption led. And that's going to require more urgent and more forceful expansionary macroeconomic policies. It's going to require reforms to reduce very high levels of household savings so that households, rather than saving a lot, they also consume. They maybe have more balance there and also support for the property sector. So those are some of the reforms that we have been recommending for China.
Okay, let's go to the back right here.
QUESTIONER: Good morning, I have a question on the U.S. economy. The situation in Middle East is very unstable. This is because President Trump stated that the ceasefire is over. After that, crude oil price -- prices have risen again. Will this lead to a second-round effect of rising prices across a wide range of products? Some Federal Reserve Board members have concerns about second round effect. Thank you.
MS. KOZACK: Yep, thanks. So on the U.S., you know, we had a new forecast that we presented just yesterday. Overall, we have found in the U.S. that growth has held up. Economic growth has held up well despite the shock to oil prices. In the first quarter, GDP growth was 2.1 percent, and that was a bounce back after a relatively weak fourth quarter of 2025 because of the government shutdown. Investment in the U.S. has been strong, and so have gains in productivity. So that's the picture for the U.S. economy.
We forecast growth to be 2.3 percent in 2026. We do see renewed pressures on headline inflation in the U.S. because of the commodity price shock. And we project inflation to return to the 2 percent target by the end of 2027, which is a delay relative to our forecast before the Middle East war.
What we also see in the U.S. is that inflation expectations have remained relatively contained. So, as the Fed makes its decisions going forward, what we are advising is that the Fed should proceed with caution, and it will need to carefully calibrate its decisions to the incoming data.
All right, let's go to you.
QUESTIONER: Hi, this month, the so-called global tariff imposed under Section 122 of the United States Trade Act are expected to expire. And it's going to be followed by country-specific tariffs under Section 301. And how do you assess the impact that U.S. tariff revenue will have on the U.S. economy going forward? And in addition, I would like to ask your opinion about the growing number of voices. You know, there are some voices that saying tariffs are unavoidable nowadays because we are in, nowadays, we take care of economy security standpoint. So even a modest tariff like 10 percent would have a little economic shock. So, the IMF has traditionally advocated for open market and free trade. And has there been any kind of shift in its position on this issue, like global tariff?
MS. KOZACK: Okay, thanks. Maybe I'll start with the first part of your question, which is I think more about, you know, what might be the impact on revenue. In our latest Article IV report for the United States, we calculated that tariffs would generate additional fiscal revenues of 0.7 percent of GDP in fiscal year 2526. We also noted that we expected that those revenues may decline over time as trade is reallocated and as import substitution take hold.
Now, I think regarding your broader question on the IMF's view on open markets, here, I would say, we continue to support open markets and trade. We think that they're important to raise global living standards and reduce poverty. And we've seen some of those positive impacts globally. But at the same time, we have also recognized that the benefits of globalization and of integration have not always been evenly shared. And so some countries have faced job losses, they faced wage pressures, inequality has increased. There's been concerns about a level playing field and unfair competition. So I think we recognize the benefits of an open and integrated system, but we also realize that in order to make that system really work, it's important that the benefits are evenly shared and that the playing field is level.
Let's go here. I'm going to take your question, then I'm going to go online for a bit.
QUESTIONER: Thank you for taking my question. I have two, actually more than two, questions.
MS. KOZACK: Can you just maybe give me one question, so I have some time to go online? Top priority question.
QUESTIONER: Okay. Updates on Africa, okay. And then how does migration, given that the first Deputy Managing Director is traveling to South Africa, how does migration pressure in South Africa affect regional economic stability, as well as across the continent?
MS. KOZACK: Okay, so update on kind of where we are with Africa as a region.
QUESTIONER: Yeah, yeah.
MS. KOZACK: Okay.
QUESTIONER: And then the migration, the migration crisis in the southern region. How does it affect the regional economy as well as across the continent?
MS. KOZACK: Okay.
QUESTIONER: And that also, I'm going to slide this in the influence of inflation dynamic as well. Thank you.
MS. KOZACK: All right, so let me try to give a little bit of an overview on Africa. And I'll take this, and then I'll take your other question, and then we're going to go online for a bit.
So if we step back and look at, you know, what did we see in Sub-Saharan Africa? What we saw is that it entered 2026, reaping the benefits of hard-won stabilization gains. We know that Africa, many countries in Africa faced difficult and complex policymaking environments because of the economic situation and the many shocks that the continent faced. But there had been gains, there had been a lot of -- there are many important policy efforts, and those gains were starting to materialize.
So, for example, in 2025, economic activity in Africa expanded at its fastest pace in over a decade, and inflation fell. And then, of course, we enter 2026, and we had another shock. And as I think we discussed, even at the time of the Annual Meetings, many of the countries who were most vulnerable to that shock, to the commodity price shock, affecting, you know, fuel prices, fertilizer prices, ultimately perhaps food prices, many of those countries were in Sub-Saharan Africa. And we were particularly worried, as we discussed before, about countries that were net energy importers. We do have countries in Africa that are net energy exporters, but many are net energy importers, and many have very limited fiscal space, but not all. We also have some countries that had made some hard choices. And so they entered the crisis with a bit of a stronger situation.
So, regional growth, we do expect it to edge down slightly in 2026 to 4.3 percent. Oil exporters in Sub-Saharan Africa are likely to benefit from stronger revenues, both in terms of fiscal revenues but also improvements to their current account. Whereas as we said, the oil importers or fuel importers and fragile states will have a harder time. So that's, I'd say, the broad picture on how we see Sub-Saharan Africa.
We have many programs in Sub-Saharan Africa, and of course, and we have a very close collaboration with our member countries there. So, we are working closely with them on policy advice, capacity development and financial support through our programs where needed.
Maybe, like on your question on migration and the link to inflation, what we see is that the primary drivers of inflation in Sub-Saharan Africa are commodity prices, including elevated commodity prices. And this is particularly true because when we look at how we calculate inflation, food and energy are a big share of the consumption basket in Sub-Saharan Africa. So, anything that raises food prices or energy prices is going to tend to have a bigger impact on inflation in many countries in Sub-Saharan Africa than in some other countries.
Also, in some countries, we have weaknesses in exchange rates, and that exchange rate weakness can feed it through into inflation. And in some cases, we have a situation where of what we call fiscal dominance. And that can be something where the fiscal position is too expansionary, and that can also be inflationary for some countries. Migration, we don't see as a primary driver of inflation in Sub-Saharan Africa.
QUESTIONER: Well, in terms of the current situation in South Africa, do you feel that in terms of the current migrations, do you see any impact on the regional economic stability in Southern Africa as well as across the continent?
MS. KOZACK: I think what we see in several countries in Sub-Saharan Africa are high cost of living or pressures on the cost of living through high inflation or even just high housing prices or, you know, other prices. Many countries have high unemployment, particularly high youth unemployment, and many countries face high levels of inequality.
So I think our advice there to all of our member countries is to address the root cause of these issues, and that really is about structural reforms to improve the labor market, to improve the business climate and the business environment, so more firms can open. Firms are the ones that hire people at the end of the day, and to strengthen their macroeconomic policy frameworks. Because I would say macroeconomic stability is the foundation for growth, which is the foundation for jobs. And so, having a strong macroeconomic foundation is also critical. So, our advice to countries is really to let's address the root cause of the high unemployment, cost of living pressures through reforms and strong macroeconomic policies.
QUESTIONER: Thank you.
MS. KOZACK: Thanks. All right, let's go online. We don't have a lot of time left.
QUESTIONER: My greetings to all my colleagues all over the world. I have two specific questions on Egypt. Could you please clarify when can we expect the Executive Board or the Fund to continue? Consider both the Seventh Review of the EFF and the Second Review under the RSF loan deal, with Egypt?
And my second one is on the renewed escalation in the region, to what extent the Fund sees that it will impact the growth of the country, in light of the projections announced yesterday during the WEO event and also in light of the national program. The Egyptian president instructed the government to prepare the charts, the map for the national economy, post the IMF program of the country. Thank you, Julie.
MS. KOZACK: Okay. All right. So on Egypt, so our staff, the IMF staff and the Egyptian authorities reached a Staff-Level Agreement on the Seventh Review under the EFF and the Second Review under the RSF. The SLA, or Staff-Level Agreement, was announced on June 29th. And we expect the Executive Board to consider the review later in the summer. Upon Board approval, Egypt would receive about $1.6 billion in financing.
And then on your second question on the escalation of the conflict in recent days. Egypt, like all of our member countries, is operating and trying to make policies in a world of heightened uncertainty. What we have seen in Egypt so far is that its strong policy actions have helped mitigate the impact of the external shock stemming from the war in the Middle East. Egypt has taken -- has done some timely macroeconomic policy adjustments, and those have preserved macroeconomic stability and supported economic resilience.
So, I think for Egypt, our advice in this world of uncertainty and shocks is to continue on the path of reforms. You know, continue to implement the program which they have been doing and continue to take the reforms which can really improve the resilience of the economy. And part of that, importantly, is to increase the space for private sector-led growth in Egypt.
Okay, let's go online.
QUESTIONER: Hello, Julie. Yes, thank you for taking my question. Hi, I have a question on Venezuela. Venezuelan officials say the Managing Director discussed the release of frozen IMF resources and that around $200 million has already been made available through the Development Bank of Latin America and the Caribbean to support the reconstruction efforts following last month's devastating earthquake.
Can you confirm what was agreed in that conversation? Whether the IMF has authorized any access to Venezuela's SDRs and what additional support, if any, the Fund is considering following the earthquakes. Thank you.
MS. KOZACK: Okay, thank you. I think we have another question online on Venezuela and then here. Does anyone online want to come in on Venezuela?
QUESTIONER: Thank you, Julie. I understand, of course, that now that Venezuela has its recommission on this acting government, they do have access to their SDRs, their own money in a way. Just wondering, is the IMF involved in any way on how that money is flowing from the IMF to Venezuela? Acting President Delcy Rodriguez says that the country will set up a special fund for this money. But just wondering if you are not involved in that process at all. Money flows to Venezuela, of course, is a big question mark right now. So wondering if you could bring some clarity on that, if you're involved. Indeed. Thank you so much.
MS. KOZACK: Okay. No other questions on Venezuela. Right.
So on Venezuela, I just want to start again by saying that our thoughts are with the people of Venezuela at this very difficult time for the country. We express our condolences to all of those affected by the terrible earthquake.
Beyond the humanitarian toll, we do expect the earthquakes to have a significant economic impact. We are working in close coordination with the authorities and our other international financial organizations, particularly the World Bank and the Inter-American Development Bank. They are assessing recovery needs, and we are looking at the broader economic consequences of the earthquake. We are in close contact with the Venezuelan authorities to discuss how we can best support the countries and their recovery efforts.
And in this context, our Managing Director did speak this week with Acting President Rodriguez. They discussed the evolving economic situation. They also discussed the use of Venezuela's reserve tranche at the IMF, which provides an important and readily available source of liquidity that can be mobilized quickly to help address urgent humanitarian needs arising from the disaster. We have been working with counterparts to facilitate access to Venezuela's own resources at the Fund.
And maybe I'm just going to step back and explain for just a moment here the difference between the reserve tranche and the SDRs from the SDR allocation. So both of these, the reserve tranche and the SDRs from the SDR allocation, are considered reserve assets, but they originate from different sources, and they are recorded separately at the IMF. So what is the reserve tranche? The reserve tranche is the member's readily available claim on the IMF that arises from its quota position.
So it's basically its readily available claim from its paid-in reserve assets to the IMF. And that's different from the SDRs that Venezuela has from the SDR allocation. The SDR holdings are the member stock, in this case, Venezuela's stock of IMF-created reserve assets, which can be exchanged for reserve currencies.
And just to give you some numbers, Venezuela's reserve tranche position, which is what they have signaled they would like to use. As of July 8th, it was nearly U.S. $350 million. Venezuela's SDR holdings are about $4.5 billion.
All right, let me go online. I'm just going to take two more questions.
QUESTIONER: Thank you very much. I wanted to ask about Malawi. There's been -- there's this talk that there's about to be an ECF. The Finance Minister saying that there's also a lot of, there's some criticism about, you know, whether it'll involve the cuts of subsidies. Can you say where things stand between the IMF and Malawi? Thanks a lot.
MS. KOZACK: Sure. So on Malawi, Malawi faces some significant economic challenges. We recognize these challenges. They include elevated inflation and a number of external shocks which have taken a big toll on households and people in the country because their purchasing power has been eroded. We did have an IMF staff team visit Malawi from June 8th to 18th.
The team was there to take stock of recent economic developments in Malawi and to initiate discussions on policy priorities that were outlined in the authority's own National Economic Recovery Plan.
Technical and policy discussions are continuing with the goal of agreeing on a package of policies and reforms that could be supported under an ECF arrangement. Any potential program will have the aim to restore macroeconomic stability for Malawi and to support growth, which can help reduce poverty in the country.
And of course, as with any program, we will have a strong focus on protecting vulnerable members of society, and there will be important protections around priority social spending to support the vulnerable. I can also add that our AFR Director, Zeine Zeidane, met with the Minister of Finance and the Governor of the Reserve Bank of Malawi in Banjul on July 8th on the sidelines of the 2026 African Caucus. And in that meeting, Mr. Zeidane encouraged continued cooperation to reach an agreement on the ECF as soon as possible.
QUESTIONER: Thanks a lot.
MS. KOZACK: All right. Thank you. I see you have your hand up. So you will have the last.
QUESTIONER: I just needed to ask about Ukraine. We're expecting a Board Meeting coming up at some point. I understand that President Zelensky has now signed the document that is required to proceed with the VAT tax on entrepreneurs. Do you have a date yet for the Board Meeting?
So, I mean, actually, are you satisfied now that the conditions have been met or is that why we're still waiting for a Board Meeting?
MS. KOZACK: Okay. So, what I can say on Ukraine is that, as you know, we reached a Staff-Level Agreement in June, and we expect that the Board, our Executive Board, will meet to consider the first review in the coming weeks. So we'll provide more details on the precise Board Meeting when we have an exact date, but we do expect it to proceed in the coming weeks.
And I think that brings us to a close. Thank you all very much for your participation.
As a reminder, the briefing is embargoed until 11:00 a.m. Eastern Time in the United States. Transcripts will be made available on IMF.org later today. And I know there were some of you with hands up, still either in the room or online. If we didn't have time to get to your questions, please do reach out to the media team, media@mf.org or via the Press Center, and we will follow up with you bilaterally.
Wishing you all a wonderful day. Thank you so much for joining us.
*****
