September 10, 2026
PRESS OFFICER: Angham Al Shami
Phone: +1 202 623-7100Email: MEDIA@IMF.org
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 Kozak, Director of the IMF's Communications Department. As usual, this briefing is embargoed until 11 a.m. Eastern Time in the United States. I will start with a few announcements, and then we'll move to take your questions in person on WebEx and via the online Press Center.
Starting with the Managing Director's travels. On September 18th and 19th, the Managing Director will participate in the informal meeting of EU Economy Finance Ministers hosted by the Irish Presidency in Dublin.
During the week of September 21st, the Managing Director will travel to New York to attend the 81st UN General Assembly. While there, she will take part in a number of events and hold a series of bilateral meetings. The Media Relations team will be able to share more details of her engagements with you.
Turning to our first Deputy Managing Director, Dan Katz will be in El Salvador on September 17th for meetings with the authorities and other key stakeholders to engage on recent economic developments and the Fund-supported program.
Deputy Managing Director Nigel Clark is in India this week for meetings with key policymakers and private sector representatives in New Delhi, Mumbai and Chennai. On September 24th and 25th, Deputy Managing Director Clark will be in Colombia for meetings with the authorities. He will also have exchanges with other key stakeholders, including private sector representatives and students.
Deputy Managing Director Kenji Okamura will be in Tokyo on September 17th and 18th to participate in the 15th IMF Japan High-Level Tax Conference for Asian Countries. He will deliver opening remarks and join discussions on current tax policy and tax administration issues affecting the Asia Pacific region.
A reminder that Registration for the 2026 IMF and World Bank Group Annual Meetings to be held in Bangkok, Thailand from October 12th to 18th is open. Please register through IMFConnect.org. We encourage you to submit your registration and visa applications as soon as possible.
And with that, I will now open the floor for your questions. For those of you who are connecting virtually, please do turn on both your camera and microphone when speaking.
Okay, the floor is open. All right, , Insa, let's start with you.
QUESTIONER: Thank you very much. Good morning, Dear Director Julie Kozack. I amMy name is Insa Ben Said Dia, the permanent correspondent of the first private channel in Senegal outlet called 2STV, and I welcome my colleagues who just joined me.
MS. KOZACK: We also welcome them to the Press Briefing.
QUESTIONER: So the debt restructuring in Senegal across all creditor groups is likely to be a drawn-out process. Some observers suggest that it could take up to three years. What does the IMF consider a realistic time frame to finalize this debt treatment? And this timeline raises a direct trade-off, meaning that while waiting for the restructuring to conclude, how does the 36-month program ensure that the new oil revenues aren't merely used as a cash cushion to service external debt, but generally drive domestic private sector development and economic diversification? This is my question. Thank you very much.
MS. KOZACK: Okay, thank you, Insa. I suspect there's going to be other questions on Senegal, so let's take them as a group. Jorgelina, right here in the front.
QUESTIONER: Hi, Jorgelina Rosario with Bloomberg. First, I would like to ask, can you clarify, as the Staff-Level Agreement was agreed last week, if the IMF will use the debt sustainability analysis for low-income countries that is current or the one that is revising and updating and will be discussed in the Board, I believe, in the following weeks or in October?
And secondly, this is all about financing gaps, right? For the program to get to the Executive Board and the money disbursements to kick off, will Senegal need to stop servicing the debt right now? Is there any other possibility under the DSA that the IMF is analyzing? There's a lot of lack of clarity regarding this. So from the MF perspective, if you could clarify, that would be great. Thank you.
MS. KOZACK: Okay, thanks. Okay, we have Kemi in the back.
QUESTIONER: Hi, good morning. Kemi Osukoya with the Africa Bazaar. This is regarding debt relating to Senegal. Have you seen a new Africa debt crisis emerging? Not necessary because of the debt-to-GDP ratio, but because the cost of servicing the debt is becoming too high relative to the government's revenue. Thank you.
MS. KOZACK: Okay, thanks. Would either of you gentlemen in the back like a question, please?
QUESTIONER: Thank you so much. I'm Oyekan from Senegal. In his September 8th policy address, the Senegalese prime minister said the country will not restructure its debt, but will only reprofile it by extending maturities and negotiating the interest rate. Yet Kristalina Georgieva has described Senegal as the next case for the G20 Common Framework. Does the IMF consider the government announce reprofiling sufficient to restore debt sustainability? And what concrete agreement or commitment must Senegal obtain from its creditor before the waiver and the new $2.2 billion program can be approved by the Executive Board? Please.
MS. KOZACK: Okay, thank you. Would you like a question on Senegal? No. Yeah, you're good. Okay, let me go online to see if anyone has questions on Senegal. I believe we have -- Rodrigo has a question on Senegal.
QUESTIONER: Thank you. Julie. Yes. Good morning, everyone. I guess it's a follow-up, and it kind of already has been asked. But I'm also asking for clarity regarding the rescheduling and the restructuring, and whether what the Fund is expecting is the same thing as the government is offering. And is the Fund confident that Senegal can deliver the debt relief needed to comply with the announced SLA?
MS. KOZACK: Okay, very good. Anyone else online have a question on Senegal? Okay. And then I'm going to read a question that's come in through the Press Center also on Senegal. The question is from Magnus from Octus. And the question is, ‘"Is the IMF's view that Senegal can regain debt sustainability without a haircut restructuring?’"
Okay, so let me take these questions on Senegal. So I think, as you know, on September 2nd, IMF Staff and the Senegalese authorities reached a Staff-Level Agreement on key economic policies that can underpin a new three-year Extended Credit Facility, ECF, arrangement. The arrangement would be worth about U.S. $2.2 billion, and the arrangement is aimed at supporting the authorities' economic and financial reform agenda. The agreement is subject to approval by IMF management and, of course, our Executive Board. The key reforms that are under the program aim to restore the sustainability of Senegal's public fund finances while also protecting vulnerable households in Senegal.
The authorities have, as was mentioned here, also announced their intention to undertake a debt treatment encompassing Senegal's external debt, and that is aimed at addressing Senegal's elevated debt vulnerabilities. We do welcome the authorities' plans to utilize the G20 Common Framework, and the IMF stands ready to support that process.
I would also add that where both the country authorities and their creditors agree, the Fund can also use its good offices to help bring creditors and debtors together in the debt restructuring process. And we're of course prepared to do so if requested now in terms of the time frame and process.
So, let me step back and maybe explain the process a little bit. So, in terms of bringing the program to the Board and how that interacts with the debt restructuring process, so our policies at the IMF will allow us to bring the program to our Executive Board for consideration, even while Senegal is still discussing the debt restructuring with its creditors. So that means that the IMF, if the program is approved by our Executive Board, that we would provide financing for Senegal, which can help meet some of Senegal's immediate financing needs, including related to provision of public services and other priority spending.
While the debt discussions are being worked out in terms of the duration of the discussions and how long it may take for the debt restructuring to be worked out, that's not something that I'm in a position to talk about or to even speculate on. That's really a matter for Senegal and its creditors. And I would also add that the design and the scope of any debt treatment are ultimately matters for the Senegalese authorities and their creditors.
What the IMF's role is is to work with the authorities on the macroeconomic framework and the economic policies that will underpin that framework, and then to prepare the debt sustainability analysis so that when we. And the goal of both the policies embedded in the program as well as the debt treatment are to restore Senegal's public finances to sustainability, in terms of which DSA we're going to use.
Yes. Oh, on the oil. Okay. On the oil. So right now, what I can say on the oil revenues is that right now, higher global oil prices as of now are actually adding additional pressure to Senegal's public finances. And that's because Senegal still has untargeted energy subsidies. So as oil prices go up, the size of the subsidies in the fiscal, you know, in the budget also are going up. So right now, higher oil prices are putting further fiscal pressure on Senegal.
So in terms of how the program may help address this, the reforms under the program are aimed at supporting, you know, transparent management of public resources, creating space for priority spending, targeted social protection programs, and improvements in the business environment to help also diversify Senegal's economy.
On the DSA, we'll have to come back to you, Jorgelina. I don't know the answer to which precise vintage of the LIC DSF we'll be using in terms of overall financing and financing gaps. I mean, essentially what the program will aim to do, like our role, is to ensure that when we put together both the debt sustainability analysis but also the entire macroeconomic program, including taking into account the financing that the IMF will provide, the financing that other donors will provide, any financing that may come from the debt restructuring, that all of that ensures that Senegal does not have financing gaps that remain. But the details of exactly how that is achieved, that is the matter that is really for Senegal and its creditors to work that out.
Let me just answer the question on the common framework. So on the common framework here, I think, what I want to clarify is that the common framework provides a way for creditors to improve their kind of coordination, including with debtors. So the common framework doesn't necessarily determine whether. It can apply under many different types of debt treatment. So it doesn't imply a particular type of debt treatment. It's more of a way to ensure that that the debt restructuring happens in an orderly way and in a timely manner.
And so, one of the things that we've been doing under the common framework with the G20 and others is to try to ensure that the common framework delivers debt treatments in a more timely and more orderly fashion. And so that's, I think, where the Managing Director was talking about Senegal being an important case for the common framework to demonstrate that the debt treatment can be done in a faster and quicker way so that the Senegalese people can reap the benefits of moving ahead with reforms.
And then let me, Kemi, answer your question, and you were asking whether we're worried that there may be a new debt crisis in Africa. I think here what I can say is, and you point to exactly the right issue, which is when we look at debt levels, especially in low-income countries, including in sub-Saharan Africa, we see that debt levels have actually kind of declined and stabilized in this group of countries. Where we see the pressures is more what we would call on the liquidity side, which is related to debt service and the availability of financing.
And so, we are seeing additional pressures on countries in part because of the reduction of ODA, official development assistance, so less financing available at times, but also because of the increase in yields that we see in the advanced economies. And so that, of course, has repercussions for many countries, all countries around the world, including emerging and developing countries and low-income countries.
So, we do see some of these liquidity pressures. One of the things that was discussed at the G20 is what we call the three-pillar approach of the IMF and the World Bank. And that three-pillar approach is really aimed at helping countries exactly in this circumstance where it's not a question of whether they need necessarily debt restructuring or debt treatment. But for countries where the issue is more related to liquidity concerns around nearer-term debt servicing costs. So, we do have the three-pillar approach, and that's something that we are seeking to really lean into to help countries deal with these liquidity pressures in the near term.
All right, let's move on. Okay, Lalit, let's go to you. Thank you.
QUESTIONER: Lalit Jha from IANS Indian News Service. Last week, Prime Minister Modi announced that India had last quarter 7.8 growth rate. How do you assess India's economic situation right now in terms of at the time when there's a lot of economic uncertainty going on around the world? Thank you.
MS. KOZACK: Okay, thanks, Lalit. Sagar, is this on India?
QUESTIONER: Yes. Adding to [that] Lalit's question, there was also a controversy over the reporting of GDP figures in India. So what is the IMF assessment of the integrity of GDP, the GDP data coming out from India, and is there any room for more transparency?
MS. KOZACK: Okay, very good. Anyone else on India? Okay, let me take these. So on India, as you said, Lalit, India's real GDP in the second quarter grew by 7.8 percent. That was above our Staff expectations and also the consensus among other observers; this upward surprise was driven by stronger-than-expected activity in the services sector and also in exports. And I think what we would say is the outturn also underscores the resilience of the Indian economy despite the energy price shock. And it also means that, as we've been saying for quite some time, that India does remain a key growth engine for the world.
With respect to the question that you asked, Sagar, what I can say is the latest GDP release, the one that we just talked about for Q2, it incorporated both a new index of industrial production. It also included a new producer price index series. And those two new series should help improve India's GDP estimates. And we welcome these important steps that India is taking to modernize its macroeconomic statistics. And we, of course, we encourage the authorities to continue to further strengthen the statistical framework and data quality along the lines that they're progressing.
All right, let's move on. Guillermo, let's go to you.
QUESTIONER: I have a question. I'm sorry, I have a question which is related to India.
MS. KOZACK: Okay, why don't you go ahead? Sorry, Guillermo, just hold on.
QUESTIONER: With the Brent crude now almost above $100 a barrel for large oil importers such as India, how significant does IMF think is that a risk? Especially that during the West Asia crisis, the situation had really enlarged for the country.
MS. KOZACK: Okay, so I think I would answer your question like this. And it's true for India and all countries that are oil importers. What we see, of course, when energy prices or oil prices increase, is that puts pressure on the balance of payments of energy importers. It also can put pressure on their fiscal positions. And that depends very much on the composition of their fiscal.
Now, in some cases, in many cases, actually, countries have taken measures to. Many oil-importing countries have taken measures to mitigate the impact of the shock. And some countries like India have kind of gone. The shock has occurred at a time when the country has been in a stronger economic position. And that is the case for India. And so in India's particular case, of course, we are monitoring closely the effects of higher oil prices on the economy. And we'll be having a new, we'll be preparing -- we're in the process of preparing. And we will be announcing our new forecasts for India at the time of the October WEO. But so far, what we've seen in India, as I noted, was quite a lot of resilience to the energy price shock.
Okay, Guillermo, let's go to you.
QUESTIONER: Good morning, Julie. In Argentina, the non-performing consumer loans rose to high levels last month, and demand for dollars in Argentina rose again in July, reaching the highest level monthly this year. Is the IMF concerned about these situations, and you discussed them with Argentine officials? And also if you could provide details regarding the next review of the agreement with Argentina? Thank you so much.
MS. KOZACK: Okay. Roman.
QUESTIONER: Hi, Julie, good morning.
MS. KOZACK: Good morning.
QUESTIONER: Roman Lejtman from Infobae. In July, industry contracted by 5 percent in construction and by 4.6 percent in industry. What is the IMF's opinion on this decline, which affects consumption, tax revenue and employment levels?
MS. KOZACK: Okay. And then online, I think we have Liliana and Javier. Yes, good morning.
QUESTIONER: Good morning, Julie. How are you?
MS. KOZACK: Good, thank you.
QUESTIONER: Following on with the previous question of Roman, the decline of the industrial activity and also the decline of investment and the rise of the economic informality. Do you think this could affect the continuity of the program? Thank you.
MS. KOZACK: Okay. And Javier, sorry.
QUESTIONER: Thank you. So, the question is that, in Georgieva's last visit to Argentina, she called for managing the problem of the record household delinquency rates on bank loans. So does the IMF believe that Milei administration should take measures to provide relief to the families in this matter? Thank you.
MS. KOZACK: All right, any other? Thank you. Any other questions on Argentina? Okay, so on Argentina, what I can say is that Argentina has made notable progress in stabilizing its economy. The country has achieved two consecutive years of primary fiscal surpluses for the first time in 15 years. It's brought inflation down to around 30 percent. Growth has resumed, poverty has been reduced, international reserves are being rebuilt, and importantly, there is strengthened market confidence. And that has been reflected in lower borrowing costs, credit ratings, upgrades, and a growing pipeline of private investment.
So if we look ahead, the key priority for Argentina still remains to further strengthen its policy frameworks and its economic resilience. So this includes continuing to rebuild its reserve buffers as is going on, continuing to reduce its financing risks, preserving the fiscal anchor that it has now created, and further strengthening its policy frameworks to help prepare Argentina for future shocks.
The reform proposals that are aimed at strengthening the Central Bank's mandate and the Central Bank's independence should help with the disinflation process. And it should ultimately lead to an improvement in real incomes of Argentine households over time. And I would also add that there is a joint recognition between the Fund and the Argentine authorities of the importance of broadening the growth benefits, the benefits of stabilization and growth.
So far, these have the growth has largely been driven by energy, mining and agricultural sectors. And this is something that, of course, we and the authorities both realize would be beneficial to broaden. Therefore, work is underway to address infrastructure bottlenecks through the tendering of large networks of highways and freight railroad systems, also supported by greater tax and regulatory predictability. And efforts are also continuing to deepen Argentina's credit markets, including market-based mechanisms to develop longer-term funding markets for mortgage credit.
So all of these kinds of policies are really aimed at broadening the stabilization and growth gains. And so it's, of course, you know, sometimes you do have, you know, ups and downs in individual monthly data. But I think our focus is really on the broad trajectory and the reforms and policies that are going to support that broader trajectory to allow or to broaden the growth environment and the growth opportunities for Argentina.
Let me also then just say a few words on the questions on the NPLs. So we are of course monitoring the recent increase in household delinquency rates. We don't see these as posing a significant risk to financial stability in Argentina. Basically, what we see in Argentina is that household debt remains relatively low. It's about 8 percent of GDP in Argentina, and that's lower than in many other countries in Latin America. We also see that banks are well capitalized and liquid and that banks have provisions that cover more than 85 percent of their non-performing loans.
When I spoke earlier about the importance of kind of deepening credit markets in Argentina, I mean, I think in general the banking system in Argentina is quite small. And so deepening those markets, providing ways to have credit and the savings of Argentines channeled into investment and opportunities for Argentines is going to be very important going forward. And as I said, there is important work underway in that regard.
All right, let's -- Maoling, let's go to you.
QUESTIONER: Thank you, Julie, for taking my question. Maoling Xiong with Xinhua News Agency. My question is about China-U.S. Trade relations. The Chinese president and the U.S. President is expected to meet later this month. What does the IMF hope that would come out of this potential meeting? And also, can you share some thoughts on what does like stronger China-U.S. Trade and economic relationship mean for global economic stability? Thank you.
MS. KOZACK: Okay, thank you. So look, I think it's, and I think we've said it before, we really welcome. And we think it's very important that the leaders of the two largest economies are meeting, engaging, and, you know, having discussions on ways to resolve any of their tensions or conflicts. Obviously, having the U.S. and China in discussions and finding ways to navigate any of the tensions they have is good for the U.S.; it's good for China, and that means it's good for the global economy.
Okay, let's go to Erwin in the back.
QUESTIONER: Thank you. Thank you, Julie. Erwin Lukas from AFP. I had a quick question about a report from Oxfam that came out during this night pointing out the fact that, according to the organization IMF was pushing for larger fiscal adjustments to countries under a program, and that had an impact on lower incomes household in those countries. And Oxfam was basically saying that they were seeing a kind of return to the 1980s policy of structural adjustment. So I wanted to have your comment on that. And perhaps also on the report from this morning about from the Financial Times about Ricardo Reis and who was considered according to FTA as a leading candidate for a chief economist position and might have been pushed aside for due to report, sorry, comments on Donald Trump's economic policy. Thank you very much.
MS. KOZACK: Okay. SJorgelina, similar topic?
QUESTIONER: Yes. I have a follow-up on the process of selecting the economist chief. I understand this is a management decision, but if you could shed some light on how this decision specifically was taken. If there was a backtracking on the economist chief that was elected, anything that you can tell us that will help clarify. Thank you so much.
MS. KOZACK: Okay. All right, maybe I'll take the second question first , Erwin, and then I'll come to the Oxfam question.
So, I'm going to maybe answer with three things to say. First, Silvana Tenreyro is our current chief economist. She's been with us for about a month now. We are delighted to have her with us. She is a wonderful colleague. She is also a highly credentialed academic who also has significant policymaking experience through her work on the Monetary Policy Committee at the Bank of England. And this is a rare combination that is that we are finding to be invaluable. So we are very happy to have Silvana, and we look forward to continuing to work with her.
The second point I would make is that Silvano was selected through a rigorous selection process. That's how our recruitment processes work. As with all similar positions, we announce when we launch the process with a recruitment vacancy. The process then takes place, and at the end we announce the final decision, and that's when the process concludes. We do not discuss or disclose the details of any particular applicants in the process that would not be appropriate.
And the third thing I want to say, and I want to be very clear here, is that the IMF does not disqualify candidates because of their academic research, including research that may be critical of policies pursued by our membership. And this is actually something that we are often tasked to do is to look carefully, with a critical eye, at the policies of our members. So I just want to be clear on that last point.
And then, Erwin, on your question on Oxfam, the Oxfam report, here's what I can say. So I think at the IMF we have been working, I'd say assiduously over the last few decades to really learn the lessons from the past, but also to engage very much with stakeholders, not only country authorities, but other stakeholders in countries, civil societies, academic, think tanks, and youth groups, to really understand how we can always improve and do better.
And I would highlight two things that two areas where I think we have really focused in terms of thinking our thinking on the fiscal side. The first is all of our programs have social spending floors. And this is really aimed at protecting the most vulnerable groups in society. And we put a high attention to ensuring that vulnerable groups are protected. And the second thing that we're doing is we are looking very much at what we're calling domestic resource mobilization. So, looking at ways that many of our member countries, which have very low risk revenue-to-GDP ratios or underdeveloped domestic capital markets, how can those countries raise more revenue or resources domestically to create more space for the delivery of essential public services.
So I would say these are two things that we are really very focused on, and that is really to ensure that the ultimate goals of especially when countries are in a position where they do need to consolidate their fiscal on the fiscal side, that they look to revenue, they look to developing a vibrant domestic market, they look to how to make their spending more efficient, more transparent, more productive, more targeted, and to ensure that we protect the vulnerable.
All right, let's move on. Kyle, let's go to you.
QUESTIONER: Hi, good morning. Kyle Fishel with the National. I just wanted to follow up on the reference you made earlier about the rise that we've seen in yields. Of course, there's been a global rise recently in long-term yields. Even yesterday, the U.S. 10-yeartenors hit its highest level since 2023, despite the Treasury Department tripling its buyback program. So I just want to get the IMF's assessment on these recent developments, particularly for countries that are being forced to borrow more because of the consequences of the Iran war. Thank you.
MS. KOZACK: Okay. Andrea, yYou had a follow-up?
QUESTIONER: Yes. Thank you, Julie.
MS. KOZACK: Sorry.
QUESTIONER: I just wanted to follow up on the Iran war. So, you know, obviously in July we heard that your estimate was that the war would end, or in June, the war would end in mid-July. That hasn't happened. And there are now discussions about this,. You know, first of all, the war has expanded and threatens to sort of, you know, expand even further in the region. I wonder if you can just say a few words. lLooking forward to next month's update and the World Economic Forecast Outlook. But also, can you say a word about inflation trends? Just generally, we've sort of spoken about that in the context of individual countries. But you know, in the United States in particular, producer prices were sort of as expected earlier today. But, you know, CPI has been going up, and you know, there are a lot of decisions that have to be made by the Fed that will have impact. What's your guidance, and to what extent are you cautioning central banks to be potentially more aggressive about raising rates? Thanks.
MS. KOZACK: Okay. Jorgelina, Jacob. You can maybe go here, Jacob, Jorgelina, and then the gentleman in the back.
QUESTIONER: Jacob Gardenswartz with Scripps News. Thanks so much. On the topic of the war, I'm also hoping you can speak to any reaction to the United States launch of Operation Economic Outcast. This idea of secondary sanctions on Iran's trading partners, it seems like that's been relatively targeted so far. But I'd be interested in your perceptions of the impact so far and also potential downsides if this does escalate to the global economy.
MS. KOZACK: Okay.
QUESTIONER: Thank you. And now that we're in global topics, can the IMF say something about U.S. Ssupport for intervention on the yen? And if there are further interventions, what will the IMF think of this? Or do you think that the adjustment has to come primarily through monetary policy in Japan?
And secondly, a follow-up on growth. The IMF has emphasized that AI is a big responsible of the boost that we see on growth. Do you have any details on how much AI is contributing on that? Around 3 percent of global growth, or another way to say, will the IMF consider that global growth would be in recession without this boost? IMF recession accountability, I mean. Thank you so much.
MS. KOZACK: Yep. Go ahead to Andrea, and then we'll go to the gentleman in the back.
QUESTIONER: Sorry. Just to pile onto the inflation question, the president of the United States last night promised payment of something like $5,000 for every adult following the midterm elections. To what extent does the IMF have a view on whether that would be, in fact, also inflationary, given the experience during COVID? Thanks.
MS. KOZACK: Okay, and then we have a question from the gentleman in the back.
QUESTIONER: Sorry, I'm Mamoudou. I'm a journalist from Senegal. I have two more questions about Senegal. The first, when will Senegal receive the next IMF payment? The second, what does the agreement say? And. And what will Senegal get from it? Thank you.
MS. KOZACK: Please go ahead.
QUESTIONER: Thank you so much. On Senegal, according to Reuters, we know that around eight or 10 bondholders appointed White and Case as a legal advisor. It looks like after the deal that was reached in Senegal a few days ago, the bondholders' position has changed. What is IMF's comment on that?
MS. KOZACK: Okay, let me try to close. So maybe before you ask, I think we are quickly running out of time. So we'll take the global set, we'll take Senegal, and then we may need to wrap up after that. So Insa, then Kemi and then I'll answer the two sets of questions.
QUESTIONER: Yes, Senegal is asserting also that great economic sovereignty at a time when alternative financial channels, whether bilateral lenders or the BRICS bloc, offer capital without strict macroeconomic conditionality. So again, this geopolitical competition and domestic public opinion often variety of, let's say, intrusive policy mandates. How is the IMF adapting its own doctrine to move away from the image of a lender of last resort operating under duress towards being viewed as a generally strategic long-term partner? Thank you.
MS. KOZACK: Okay, and Kemi?
QUESTIONER: Thank you very much. So I have a question on Angola. Angola is seeking greater foreign participation in the domestic bond markets. What specific fiscal, monetary exchange rate and structural reform does the IMF believe are necessary for the international investor to have sufficient confidence in the kwanza denomination?
The other question is on the Democratic Republic of the Congo. -- sSo I will be very quick,. Tthe DRC, I know, is going through the Ebola crisis right now, and the government also depends heavily on mining revenue and the significant financing need. How is the IMF assessing the fiscal risk associated with the state owned enterprise and mining related obligation and other contingency liability that may not be fully reflected in the public disclosure on the inflation related? Given that the U.S. economic remain relatively strong, but inflation is still above targets and government debt and interest costs are rising, at what point does the government's current debt and deficit become a threat to the global economy? Thank you.
MS. KOZACK: Okay, so let me start with the global questions, and then I'll move to the other ones.
All right, so in terms of the global economy, what we see is that so far, despite six months of war in the Middle East, the global economy has been resilient. It has weathered the shocks, the energy shock in particular, better than feared. And that's been through the use of oil and gas reserves in particular countries that have them, the development or shift to new sources of -- of energy or other sources of energy, and also demand management measures. So we have seen some countries take measures to reduce energy demand, and we remain on track for world growth of around 3 percent. But uncertainty, as we've been saying for quite some time, continues to remain high.
One way to think about it is that the global economy is kind of being pulled in opposite directions. On the one hand, we have a negative supply shock from energy prices. And that's just not -- I should add -- it's not just energy prices; it's some commodity prices more broadly, including fertilizer and food. So that's the negative supply shock on one side. And on the other hand, we have a positive demand shock from the AI-led technology cycle. And those are pulling the global economy in two different directions. But there are differences, pretty significant differences in how these forces are impacting individual economies. And so we do assess that risks to the outlook continue to remain high.
So let me just take you through a few of those. So first, as the Managing Director has said, the energy shock is not over. Oil and gas prices remain elevated. Prices of refined products such as diesel and jet fuel are also very high. Ship traffic through the Strait of Hormuz is only one tenth of pre-war levels. And we know that there's been a use of strategic oil and gas reserves in some countries, but those will need restocking at some point. At the same time, we know that the AI boom is increasing demand for energy in some countries. And we also know that the Northern Hemisphere winter is now coming, and that will require -- that will create additional energy demands. So that's the first.
The second is that we do see pressures mounting when it comes to public debt. Public debt is now nearly 100 percent of GDP. That's global public debt. That's the highest level since World War II. And we also see that public debt is set to climb further globally, and many advanced economies have high public debt-to-GDP ratios.
And the third point I would make is, is that the disinflation process from the 2022 Cost of Living crisis, you know, has kind of stalled. And that means that there's an interplay between fiscal and monetary policy, you know, that we're paying close attention to. When we look to our July WEO update, at that time, we revised up global headline inflation, our forecast for global headline inflation for 2026 to 4.7 percent. We still do see that, aAt that time, we also kept our projection for core inflation broadly unchanged. And with respect to inflation expectations, we see that they have risen for this year, but that over the longer run they do still remain well anchored.
With respect to yields, there were some questions on bond yields. We do see that 10-year sovereign bond yields for key advanced economies, US, France, and Japan, are at their highest levels for quite some time. And we see this, that it's driven by rising term premia taking a bigger share of yields.
When we look at the decomposition of what is driving yields, and importantly something that I mentioned earlier, but I think goes to your question, Kyle, that what we see also, and as the Managing Director said in her G20 statement, when we see these benchmark borrowing costs rise for advanced economies, that has an effect on pretty much all countries. So even though many emerging economies have done a lot in the last decades to improve their policy frameworks to move to having independent central banks, and that has helped compress their spreads, those spreads are now sitting on top of higher benchmark yields.
So that is kind of how some of the increase in benchmark yields is kind of offsetting some of the spread compression. And all of these challenges essentially mean that policymakers are going to need to be both nimble and credible.
I think oOn the inflation side, our advice to central banks is to remain focused on their price stability mandate. For fiscal authorities, we are continuing to encourage them to really look to have credible medium-term fiscal consolidation plans. We're not in a situation where fiscal consolidation needs to take place overnight. But having a clear laid out plan and strategy for how deficits and debt are going to come down is very important for fiscal authorities.
And the other area where we're advising our members is to really focus also on lifting growth. Growth, as we've been saying, has, you know, aAlthough the global economy has been resilient and has weathered many shocks, global growth is still much lower in this decade than it was in previous decades. There's quite a bit of scope for reforms, structural reforms, removing, as our Managing Director says, self-inflicted barriers to growth to help lift growth in countries. And that also helps with the fiscal problem. So fiscal, credible fiscal consolidation combined with reforms to boost growth can help address the fiscal problem. And addressing the fiscal problem will also help address growth.
On the question on the new sanctions on Iran, this is obvious, is something that we're looking at closely. We're still kind of looking at the details right now.; aAs you said, the action is relatively limited. So we're paying close attention, and we'll have a fuller report on that in both our World Economic Outlook but also in the regional discussion around the Middle East.
Around the Middle East oOn AI and the AI impact on growth, I would answer that question with two parts. I think fFirst, what we see in the near term is that AI is clearly having a positive impact on growth through the positive demand shock that I talked about. So the investment demand for AI is strong, and that is giving a boost to growth in the U.S. and in some countries in Asia. Elsewhere, demand for chips and other products is also helping to increase exports in some countries.
So in the near term, we do see that positive impact on growth.
In the medium term, what we're really going to be looking for on the AI side is AI leading to a boost to productivity and is that leading to a boost to growth? And there we had done some work a year or so ago. We don't have any updated numbers on that, but that's something that we're also paying close attention to. What would be the medium-term effects of AI on growth? aAnd then, of course, also the labor market and jobs and those things.? So those are all research agendas that we continue to have.
On the question on the payments that have been announced, we don't have any details or analysis at this time, but that's something that, if it comes to fruition, we would look carefully at.
Let me turn now to the questions on Senegal, Angola, DRC. So on Senegal, if I understood the first question correctly, it was on the next payment date. And you're talking about when Senegal is paying the IMF or when the IMF is expected to release money for Senegal?
QUESTIONER: When is the IMF expected to release money to Senegal?The second one.
MS. KOZACK: When is the IMF expected to release money to Senegal? Okay, so the way it will work is when, right now, we have what's called a Staff-Level Agreement. And that's an agreement between the Staff of the IMF with the authorities in Senegal. The way our process works is that now that Staff-Level Agreement is going through our internal processes, and ultimately it will need to be approved by our management. After it is approved by our management, it will then be shared. The report that we produce will be shared with our Executive Board. And then there will be a meeting of our Executive Board to discuss the program. And at that time, once the Executive Board approves the program, at that time we will disburse the first disbursement to Senegal.
So the program we've said is U.S. $2.2 billion. That's the proposal from our Staff. If that is approved, Senegal will get a first disbursement, but it won't be the whole amount. It will be a portion of that $2.2 billion. I don't yet have a Board date for Senegal, but we will certainly keep you informed once we have more details of what -- when our Board will meet.
In terms of details of the agreement, what I can say is that the program that is under discussion has a few different pillars. So a first pillar is restoring fiscal sustainability. And that means that the fiscal strategy in the program is going to focus on strengthening domestic resource mobilization, streamlining expenditures and reinforcing social safety nets, particularly through a targeted cash transfer system to protect the most vulnerable households in Senegal.
Another pillar is structural reforms. These are aimed at kind of underpinning the fiscal strategy. So the authorities have indicated that they plan to adopt a medium-term revenue strategy next year, in 2027. And so that's a strategy that will kind of show how the authorities want to increase Senegal's fiscal revenues over time again to create space for priority expenditures.
Another pillar is enhancing fiscal governance, and that's through improved debt management, stronger monitoring of domestic arrears, and improved oversight of state-owned enterprises. And then there's also another set of reforms that are really aimed at enhancing private sector-led growth in Senegal. And there's going to be some measures to improve the business environment under the program, but also to promote financial inclusion so that more Senegalese have access to the financial system so that they can undertake entrepreneurial or other activities which will help support the Senegalese economy, help raise living standards for the Senegalese people, and make the economy overall more robust and more inclusive.
So those, I would say, are the pillars of the program.
In terms of the question on -- on the bondholders, I think what I can say to you on maybe the process, -- not this particular group of bondholders, you'd have to ask them about their thinking--. Bbut in terms of a debt restructuring process, it is very common for both the authorities, the debtor authorities and the creditors to engage financial advisors and legal teams. So that's fairly common in a debt restructuring process, because the process is very complex. and it ultimately involves. It is also tThere's legal documents, of course, that need to exchange hands, because, in any, I should say, debt treatment process, debt reprofiling, debt treatment, debt operation., iIt's ultimately a legal process where legal documents are exchanged at the end of the day. So that's fairly common.
And then on the question on the geopolitics, I would say that when it comes to the way the IMF is thinking about all of this, we are approaching it from the following lens. We live in a world that is where uncertainty is high and where there are big global transformations underway. There's the technology transformation which we talked about. There are demographic transitions in many countries. Some societies are aging. Some countries and regions like Africa and the Middle East have very big youthful populations. There are transitions in geopolitics and trade.
So in a world where all of these uncertainties and transformations are taking place, we find our job at the IMF is to ensure that we remain fit for purpose, serving our members as best we can. And we have -- we're in the process of completing five big reviews, policy reviews, of how we will engage in lending. So we have a review of conditionality, a program conditionality, which has to do with our lending and how we're going to lend and make sure our lending and the way we adopt programs is fit for purpose. We have a similar big review on surveillance, which is our kind of policy advice and analysis for countries. We have one revamping the way we do our debt sustainability analysis for low-income countries, and we have a few others. So what we see, our job is to really make sure that we are in a position to best serve our membership, given the way the world economy is developing today. And so, that work is all underway. Much of it will be discussed at our Annual Meetings in Bangkok.
All right, let me. Kemi, we'll end with you. Yyou had a question on Angola and then DRC, so let me see what I have here. So on Angola, maybe just to give you where we are with Angola, we had an IMF team visiting Angola recently. They concluded what we call a post-financing assessment on September 9th. And that assessment is expected to be presented to our Executive Board in November.
More generally, when we look at the economy in Angola, the external environment, because Angola is an energy exporter, has, you know, higher energy prices have meant that Angola has a stronger external position. It has improved market access. It's also experiencing declining inflation. Growth has held up at around 3.1 percent in Angola, and inflation eased to about 10.9 percent. So that's kind of where we are in terms of the economy.
And when you asked specifically about debt, I think there what I can say is, yeah. So I think there, what we can say is that we're supporting, we support Angola's domestic debt market development. Diversifying its investor base in the domestic debt market is important. It's also important, though, that Angola continue to have prudent debt management that remains really essential for Angola to safeguard debt sustainability and manage potential risks. And we're encouraging Angola to continue with reforms to strengthen its overall macroeconomic stability. And also, more reforms to continue with macroeconomic stability will also help create a positive environment for development of the domestic debt market.
And then on DRC, you know, of course, we're closely monitoring the Ebola crisis, and really our deepest sympathies go, you know, to the people of DRC who are most affected by the Ebola crisis.
With respect to our engagement with DRC, we did conclude the Article IV in late June. The Board also completed the Third Review under the ECF arrangement and the Second Review under the RSF. Completion of those reviews unlocked new disbursements totaling about U.S. $350 million. Our programs overall in DRC are aimed at supporting the country's efforts to strengthen macroeconomic stability, improve the business climate, and ensure transparent governance.
And what I can say is also is that growth in general is hovering around 5.5 percent. We project in the Staff Reports, that were published in late June, growth at 5.6 percent in 2026 and 5.5 percent in 2027. Of course, we'll be updating those for the October WEO. And maybe just to say, on DRC's debt situation, it has relatively low public debt. It's about 20 percent of GDP, and external debt is about 13 percent of GDP. So the debt situation in DRC is that debt is low, but it also has DRC also has a low debt-carrying capacity. So we do continue to closely monitor the debt situation in DRC.
And with that, I am going to bring this Press Briefing to a close. Thank you very much for your participation today.
As a reminder, this briefing is embargoed until 11:00 a.m. Eastern Time in the United States. A transcript will be available later on IMF.org. I know that we did not have time to get to some questions. Please reach out to the media team@mediamf.org or via the Press center and we will follow up with you bilaterally.
Thank you again, and wishing you all a very wonderful day.
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