Category: Economics

Source: International Monetary Fund

July 24, 2025

SPEAKER:  Ms. Julie Kozack, Director of the Communications Department, IMF

MS. KOZACK: Good morning, and welcome to the IMF Press Briefing. It is wonderful to see all of you, both those of you here in person and colleagues online as well. I’m Julie Kozack, Director of the Communications Department at the IMF. As usual, this briefing is embargoed until 11 A.M. Eastern Time in the United States. I’ll start with a few announcements and then I’ll take your questions in person on Webex and via the Press Center.
First, we will be releasing our flagship publication, the World Economic Outlook Update, next Tuesday, July 29th. The report will offer fresh insights into the current global economic trends and external imbalances.
For your planning purposes, our Executive Board will be in recess from August 4th through the 15th, and we will notify you in due course on the date of our next press briefing.
And with that, I will now open the floor for your questions. For those connecting virtually, please turn on both your camera and microphone when speaking, and the floor is opened.

QUESTIONER: Just wanted to ask you about the tariff situation that’s unfolding at the moment, given the recent trade deals that the U.S. has struck with its key trading partners, including Japan, Indonesia, Philippines, just recently. The European Union is under negotiations that’s coming to fruition soon. It looks like the consensus is kind of around a 15 to 20% tariff rate in that range, that the US is, sort of agreeing with its partners for. And I just wanted to know if the IMF views that as an acceptable rate? Whether this would be detrimental to the global economy. I know we have the WEO coming out in a few days. Just wanted to get your take on what’s unfolding right now.

MS. KOZACK: Let us see if there’s any other questions on this topic before I answer. If anyone online wants to come in on this topic, please let us know.
So let me start with where we are. Since April, when we think about the global economy, we see activity indicators that reflect a complex backdrop shaped by trade tensions. We also saw that in the first quarter of the year, the data showed some front-loading of exports and imports ahead of, at that time, what was expected tariff increases. The more recent data points to trade diversion and to some unwinding of the front-loading. And at the same time, we are seeing some trade deals. Some have lowered tariffs. And at the same time, there’s also been some deals or some, not deals, but we have seen increases in tariffs, for example, on steel, aluminum, and copper. So, our team is assessing all of this information as it is coming in. And they will put together a comprehensive picture, which we will talk about in the WEO next week.

I would also just remind that when we released our WEO in April, we talked about a period of very high uncertainty. And at that time, we had in our WEO a reference forecast, right? And that reflected the fact that we were in an uncertain environment where there were many different paths forward. For example, we had an effective tariff rate of the U.S. of about 25 percent based on April 2nd announcements. That effective tariff rate for the U.S. declined to 14 percent based on the pause of April 9th. And of course, one of the important factors for assessing the impact of the deals on the U.S. economy and the global economy will be what is the new effective tariff rate that will prevail.
So, all of that work is ongoing, and we will have a full assessment next week in the WEO.

QUESTIONER: So, would the 15 to 20 percent rate be higher than what we saw in the April WEO?

MS. KOZACK: I think the way I would answer that is to simply say that we are looking at all the deals in April, and we had an effective rate around 14 percent. There, of course, has been movement since April. There have been deals. There have been some reductions in some tariff rates. There have been increases in other tariff rates. So, the team is going to have to put together that comprehensive assessment to determine what would be the new effective tariff rate that would prevail. And then, we would be in a position to compare it to what we had based on the April 2 announcement, what we had based on the April 9 pause, and then where we are today.
And another very important factor will be what is the overall impact on uncertainty, right? We have talked about being in a very highly uncertain environment. So, of course, we will be looking at that closely as well.

QUESTIONER: The president of Ukraine recently signed a law that regulates the anti-corruption bodies in the country. How does the IMF view this law, and how can this impact IMF Ukraine cooperation moving forward? And secondly, Ukrainian Prime Minister Yulia Svyrydenko said Ukraine is facing a significant budget shortfall and is likely seeking a new IMF loan. What is the IMF’s assessment of the possibility of launching a new program?

MS. KOZACK: Any other questions on Ukraine?

QUESTIONER: I just wanted to follow up on whether, despite the moves by the Ukrainian government, can the IMF land to Ukraine?

MS. KOZACK: Are there questions online on Ukraine? On Ukraine, let me just step back and remind kind of where we are with Ukraine.
On June 30th, the IMF Board completed the Eighth Review of the EFF program and that enabled a disbursement of half a billion U.S. dollars. And that brought total disbursements under the program to U.S. $10.6 billion. Ukraine’s economy remains resilient. The authorities met, and this was reported as part of the Eighth Review, all of the end-March and continuous quantitative performance criteria; they met the prior action that was required for that review, and they also met two structural benchmarks.
With respect to the specific questions, on the first question that you had, the enacted law, as we see it, neutralizes the effectiveness of Ukraine’s anti-corruption institutions. And from our perspective, that would be very problematic for macroeconomic stability and growth in Ukraine. Stepping back a bit, you know, the establishment and the development of independent institutions to detect and prosecute corruption cases has been central to the IMF’s engagement with Ukraine over the past 10 years. And these institutions have contributed to an improvement in governance in Ukraine over that period.
Why is this important for Ukraine? From our perspective, Ukraine needs a robust anti-corruption architecture. And that will help level the playing field, improve the business climate, and attract private investment into Ukraine. And it’s a central piece of Ukraine’s reform agenda. So, from our perspective, safeguarding the independence of anti-corruption institutions remains a critical policy priority.
We do take note of the government’s intention to introduce a new bill to restore the independence of the anti-corruption institutions.
So, what I can say now is that in the coming weeks, the IMF Staff and the authorities are expected to intensify discussions about the 2026 budget and s to do an assessment of Ukraine’s financing needs, both for 2026 and over the medium term. They will be intensifying discussions to put together that comprehensive picture. That work is essential for the current program and any future potential engagement that we would have with Ukraine.

QUESTIONER: If it finishes, what was the Staff assessment of the First Review of the agreement with Argentina and when would the Board’s definition be? And following the report on external reserves published this week, I think it was on Monday, does the IMF’s concerns continue?

QUESTIONER: Has the Board already met to evaluate the First Review? And do you know if Argentina has requested a waiver? And how does the IMF assess the recent rate in this area, action rate and interest rates? And what are the causes of this change in monetary and exchange rate policy? Thank you.

QUESTIONER: Yes, to add up to what was asked if there are any concerns regarding the impact of the exchange rates on inflation as well? And also, if the concerns remain regarding the weak external position for Argentina.

QUESTIONER: President Milei has already confirmed that, for fiscal reasons, he will veto the laws recently passed by the Congress to increase pensions, extend the pension moratorium and declare an emergency disability. So, then has this intention being talked with the IMF previously or what is the IMF position on this matter?

MS. KOZACK: On Argentina, here is what I can share today. So first, I want to mention that discussions on the First Review, which many of you have mentioned, are very advanced at this stage. And the next step in these discussions will be to reach a Staff-Level Agreement between the authorities and Staff. And we believe that that can happen very shortly. After the Staff-Level Agreement is reached, then Staff will present the documents to the Executive Board for their approval and consideration.
What I can also add, and we have talked about that before here, is that the program has been off to a strong start. It has been underpinned by the continued implementation of tight macroeconomic policies, including a strong fiscal anchor and a tight monetary policy stance. The transition to a more flexible exchange rate regime has been smooth. Disinflation has resumed. And Argentina has reassessed international capital markets earlier than had been initially anticipated under the program.
Given that our Staff and the authorities are very engaged in these discussions, which again are at an advanced stage, I’m not going to provide any further details now. We will give space for them to bring those discussions to a conclusion, and then we will, of course, communicate once those discussions have come to a conclusion. And again, we do think that a Staff-Level agreement could happen very, very shortly.

QUESTIONER: Will the Board meeting be before, and start the holiday recess, or after? Because we are talking about 15 days, if not.

MS. KOZACK: So right now, I don’t have any further details to share with you, but certainly once a Staff-Level Agreement is reached, we will be communicating, including the potential timing for formal Board discussion.

QUESTIONER: Can you please kindly update us on the current status of the discussion between the IMF and the Republic of Senegal regarding the temporarily suspended disbursements? Especially with the Annual Meetings approaching in October in Washington, is there a realistic prospect of finalizing the matter before then? This is the first question.
The second one, following the recent meeting between His Excellency, the President of the Republic of Senegal, Bassirou Diomaye Faye, and Mrs. Gita Gopinath, First Deputy Managing Director of the IMF, could you kindly also share some insight into the key topics discussed? What were the main points of their exchange, particularly in regard to economic and financial cooperation?

MS. KOZACK: Any other questions on Senegal Online? Does anyone want to come in on Senegal?

QUESTIONER: I have a follow-up because investors have been expecting the Board to consider the waiver by September. Is that timeline realistic? And the government also said it shared everything in its findings for reconciliation with the IMF. Does the Fund feel it has everything it needs in order to make the decision on the waiver?

QUESTIONER: Have you received the report done by Mazars? And, is it enough to conclude the misreporting, and can we have maybe a time for the Board? And then, when can we expect also a new program?

MS. KOZACK: So, let me turn to these questions.
I’ll start by saying that the IMF remains closely engaged with Senegal. And as part of this process, as was noted, First Deputy Managing Director Gita Gopinath met with President Bassirou Faye during his visit to Washington, D.C. on July 9th. Our First Deputy Managing Director (FDMD), Gopinath, emphasized the IMF’s continued support, as Senegal works to resolve the misreporting matter. And the President reaffirmed his government’s strong commitment to transparency and reform.

What I can also share is that an IMF Staff team will visit Dakar. The mission is tentatively planned for later in August. The purpose of the mission is going to be to discuss the steps needed to bring the misreporting case to our Executive Board. And the team will also use the opportunity to initiate discussions on the contours of a new IMF-supported program for Senegal. We are also working closely with the authorities to design the corrective actions aimed at addressing the root causes of the misreporting and, of course, to strengthen capacity development in Senegal.

With respect to the questions on the report by Mazars, what I can share there is that we have received a preliminary debt inventory that has been prepared by Forvis Mazars. Our IMF Staff are currently reviewing that report and all the information in detail. The preliminary assessment in the report is broadly aligned with expectations, and the final validation is ongoing. And I will leave it at that on Senegal. That is what I can share for now.

QUESTIONER: My question is on Japan. Last week, the upper house election in Japan was over, but still unclear on the composition of a new government. And what is it you are recommending? But almost all parties pledged fiscal — expansionary fiscal policies, from providing cash to reduction of consumption tax. And what is your recommendation to the new government, especially on fiscal policy, given the power of debt in Japan? And my second question is on monetary policy of Federal Reserve next week. And should the Federal Reserve cut interest rates preemptively under the circumstance of huge pressure from President Donald Trump.

MS. KOZACK: Let us start with Japan. So maybe let me just step back a little bit to give an overview of how we assessed the Japanese economy in our April WEO.
So, at that time, we expected growth to strengthen in Japan, and we expected inflation to converge to the Bank of Japan’s 2 percent target by 2027. Growth was projected to accelerate from 0.2 percent in 2024 to 0.6 percent this year. At the same time, and as has been the case for quite some time, Japan continues to have high levels of public debt. And because of that, our advice for Japan is for a clear fiscal consolidation plan to offset pressures from rising interest payments and also from aging-related spending. And because of this advice, we assess that Japan has limited fiscal space, again because of high public debt and these future spending needs.

In the near term, our advice to Japan is that given this limited fiscal space, it is essential that any response to shocks, any fiscal response to shocks, is both temporary and also targeted. And by targeted, I mean targeted toward vulnerable households and firms that may be most affected by shocks. Generalized subsidies and tax cuts, in our view, should be avoided. And that is because they are not targeted to the most vulnerable, and they are not an efficient use of Japan’s limited fiscal space.

And then, on your second question, what I can say about the U.S. economy is that the U.S. economy has proven to be resilient in the past few years. It is something that we have been talking about for quite some time. But we do see high-frequency data that indicate moderating domestic demand and low consumer and business sentiment in the U.S. In addition, and as we mentioned before, there was a strong front-loading of imports into the U.S. in the first quarter. And that, in anticipation of tariffs, and that led to an important drag on growth in the first quarter. At the same time, in the U.S., labor markets remain resilient, and the unemployment rate remains relatively low.

With respect to inflation, we do see inflation on a path towards the Fed’s 2 percent target, but it is subject to upside risks. And that means that the Fed’s task is complex given the very highly uncertain economic environment. So the Fed will need to take into account both policies undertaken by the U.S. administration, as well as incoming data in, and of course, data on potential wage pressures as it comes to thinking about, you know, the extent of rate decisions and the timing of any rate decisions going forward.

QUESTIONER: On Argentina, can the IMF confirm that there was a meeting on Tuesday between the Board and Staff regarding the first program review? And I know you said you wouldn’t be able to divulge much details, but I’m going to ask it anyway. When should you expect Argentina’s $2 billion disbursement?

MS. KOZACK: So, on the first question, all I can say on this is that it’s not unusual for IMF Staff to informally brief the Executive Board on a broad range of issues. And on the timing of the disbursement, as I already indicated, we will provide more information on the timing for a formal Board meeting only once a Staff-Level Agreement has been reached. And that formal Board meeting would indicate the time when any disbursement would be made available to the Argentine authorities.

QUESTIONER: First, let me say on behalf of my colleague from the U.S., around the world, as well as in Africa, to say thank you to Gita for everything that she has done. Our engagements with African journalists, especially. So that’s part of what I wanted to say, thank you to her. I know she’s leaving.
And my question now goes to if you can provide updates on African nations. And I have two specific questions, one on Malawi and one on South Africa. The recent reports on Malawi said the country is facing macroeconomic challenges. I know in 2020 they received the completed HIPC program. Could you provide any updates on whether the country has reached out for any assistance regarding HIPC? Whether they qualify for another Heavily Indebted Poor Countries Initiative (HIPC) program to help them? We know in the past year, they’ve experienced floods, droughts, and natural issues that have affected the economy. I was wondering if the IMF is providing any assistance to them.
The other question is on South Africa. We see growing tension between South Africa and the U.S. So, can you talk about if there’s any economic implication? South Africa is the largest economic in. Africa is also seen as a gateway to the continent. What are the macroeconomic issues, implications for the South African Development Community region (SADC), and also for the continent as a whole?

MS. KOZACK: With respect to Malawi, what I can say is we completed the Article IV Consultation with Malawi just yesterday, July 22nd, 2025, or two days ago. So that was the 2025 Article IV Consultation that has been completed. And of course, there will be a lot of rich discussion of the state of the Malawian economy in that report. With respect to your more specific question on HIPC, what I can say is that Malawi completed the HIPC process in 2006. And at that time, Malawi secured U.S. $3.1 billion of debt relief through the HIPC Initiative and the Multilateral Debt Relief Initiative or otherwise known as MDRI. Since 2006, our assessment is that public debt in Malawi has returned to unsustainable levels. Total public debt is reached 88 percent of GDP at the end of 2024. And the interest bill on public debt is estimated to approach about 7 percent of GDP, which is quite high.

We continue to urge the authorities to take decisive steps to restore public debt sustainability. Completing an external debt Restructuring and addressing the high cost of domestic borrowing are both essential to do this. And of course, strengthening public debt management and securing concessional financing will also be critical. So again, Malawi already completed the HIPC process in 2006.

And then, on South Africa. What I can say about South Africa, I can talk a bit about how we see the outlook for South Africa, the economic outlook. So right now, based on the April WEO, we see the current economic outlook for South Africa as subdued. We projected growth in April at 1 percent for this year and 1.3 percent for next year. Uncertainty, including related to global trade policies, is weighing on activity in South Africa. And that it’s causing firms and households to delay their investment decisions and also consumption decisions.

And I would also refer you to the April REO, Regional Economic Outlook, for Africa, and that includes some estimates on the impact of uncertainty and financial conditions on the Sub-Saharan Africa region.
And finally, we of course continue to assess developments in South Africa, and we’ll be providing an update in the July WEO.

QUESTIONER: I just had two follow-up questions. One was on your comments about the Fed. As you know, the tension between the Trump administration and the Fed, particularly Chair Powell, has been increasing lately. The President is going to go tour the Fed building that’s being renovated. It is a subject of controversy. Given that the IMF has been a stalwart defender of Central Bank independence, should any of this lead to Chair Powell’s replacement or his resignation? Just wondering, what kind of signal that would send to financial markets, to other countries, what kind of precedent would that set? And secondly, regarding First Deputy Managing Director Gopinath’s departure, can you walk us through the process for choosing a replacement for her?
Traditionally, this has been a position that the U.S. has had a very strong hand in choosing. It has typically been an American. Do you expect the U.S. Treasury Department, for example, to basically recommend a candidate to the Managing Director?

MS. KOZACK: On your first question for quite some time, the IMF has consistently advocated for Central Bank independence. And we’ve said it’s critical to ensuring that Central Banks are able to achieve their mandated objectives, such as low and stable inflation. And as we have seen through the disinflation process that has been taking place over the last few years, the credibility of Central Banks around the world has been instrumental in anchoring inflation expectations and in bringing down inflation across, you know, across the world. And across many countries in the world. And it is also important that independence, of course, it must coexist with clear accountability to the public.
And on the question about the process, on Gita Gopinath’s decision to return to Harvard, maybe just to step back to say that on July 21st, you know, the Managing Director announced that Gita Gopinath, our First Deputy Managing Director, would be leaving the Fund at the end of August to return to Harvard University. She will be the inaugural Gregory and Ania Coffey Professor of Economics in the Department of Economics.

And for your background, Ms. Gopinath joined the Fund in January 2019 as the first female Chief Economist of the Fund. And she was promoted to First Deputy Managing Director in January of 2022. I can add that this was a personal decision for Ms. Gopinath. She will return to her roots in academia, where she will continue to push the research frontier in international finance and macroeconomics. And she will also be training the next generation of economists.
With respect to the selection of process and how the process works, the Managing Director selects and appoints the First Managing Director and the three Deputy Managing Directors of the Fund. The appointment is subject to approval by the Fund’s Executive Board. And in making the selection, the Managing Director consults with the Executive Board regarding the type of qualifications that, in the view of the Executive Board, a First Deputy Managing Director or a Deputy Managing Director should possess.

QUESTIONER: My first question is regarding Sri Lanka. When can we expect the next review for the IMF-supported program? And secondly, given the uncertainties and risks that are currently opposing the economy for Sri Lanka, is there any decision or any exploration by the IMF to revisit some of the targets that have been implemented in the program that was given to Sri Lanka?

QUESTIONER: I would like to know that now Sri Lanka has already finished four reviews, and now we are heading for the fifth one. What is the overall view of the IMF? That Sri Lanka’s performance, how we perform during these four reviews? And what are the expectations for the next review in brief? Thank you very much.

MS. KOZACK: I have a question here that came in through the Press center on Sri Lanka. The question is what is the status of the IMF review of Sri Lanka’s program, an assessment of the macroeconomic outlook as well as the status of the review of the current mission that is visiting Sri Lanka. So, let me go ahead and take these. So, stepping back, on July 1st, the IMF’s Executive Board completed the Fourth Review under the EFF arrangement with Sri Lanka. This provided the country with U.S. $350 million to support its economic policies and reforms, and it brought total IMF financial support to U.S. $1.74 billion.

What I can add is that Sri Lanka’s ambitious reform agenda continues to deliver commendable outcomes. Inflation remains low, revenue collection is improving and reserves, international reserves, continue to accumulate for the country. The post-crisis growth rebound to 5 percent in 2024 is quite remarkable. The revenue-to-GDP ratio improved from 8.2 percent in 2022 to 13.5 percent in 2024. The debt restructuring is nearly complete. And program performance has been generally strong overall, and the government remains committed to program objectives.

What I can also add is that although the economic outlook remains positive for Sri Lanka, global trade policy and uncertainties do pose risks. And so, as the team moves forward to the Fifth Review, which we expect will be held in the fall, they will, of course, be looking at the overall and making an overall assessment of Sri Lanka’s economy. You know, including any implications from trade tensions or uncertainty. And of course, that will be — they will take that into account in discussions with the authorities on policies, and all of the program matters as part of the Fifth Review.

QUESTIONER: Hi Julie. Thank you for taking my question. I have two questions, one on Syria and one on Egypt. So today there was the Saudi Syrian Investment Forum in Damascus, and it was said that in addition to the Saudi investments in support that there will be some global support on this. And the IFC was mentioned as well. So, what’s the IMF’s call on this, given that we have one of the G20 countries pledging this huge amount of investments in support? And how will the IMF contribute in this? That’s on Syria.

And on Egypt, a few weeks ago in our press briefing here, it was mentioned that the two reviews, the Fifth and the Sixth, will be done together in the fall. Can we say that this is going to be in fall after the Annual Meeting, after the WEO report is published for the — for the region and for the global? And what, what is the main factor that we’re looking at here that would ultimately change the way it’s viewed, how Egypt’s economy is viewed in light of all the recent developments?

MS. KOZACK: On Syria, what I can say is, and as we discussed here before, an IMF staff team did visit Syria from June 1st through 5th, and that was the first visit since 2009. The team was there to assess economic and financial conditions in Syria and to discuss with the authorities their economic policy and capacity building priorities, ultimately to support the recovery of the Syrian economy. With your specific question, what I can say there is that we have mentioned that Syria will need substantial international assistance to support the authorities’ efforts to rehabilitate the economy, meet urgent humanitarian needs, and rebuild essential institutions and infrastructure. And this not only includes concessional financial support, but it also extends to capacity development. And here, the IMF is committed to supporting Syria in its recovery efforts. The IMF Staff is working in coordination with other partners to develop a detailed roadmap for policy and capacity building priorities for some of the key economic institutions. So that’s kind of within our mandate, and that includes the Finance Ministry, the Central Bank, and the Statistics Agency.

With respect to Egypt, what I can say on Egypt is that the IMF Staff conducted a mission to Cairo in May 2025. The mission noted continued progress under Egypt’s macroeconomic reform program, including improvements in inflation and foreign exchange reserves. However, additional time was needed to finalize key policy measures, particularly those related to reducing the state’s footprint in the economy by advancing the implementation of the state ownership policy and leveling the playing field for businesses. To allow for this continued work, the Fifth and Sixth Reviews under the EFF will be combined, and they are expected to be completed in the fall. Our team remains committed to supporting Egypt in advancing reforms to strengthen resilience and foster inclusive and private sector led growth.

MS. KOZACK: Coming back to the Press Center, I have a question that has come in on Ghana. It says Ghana’s Finance Minister is presenting the mid-year budget today, following a first half marked by notable improvements in key economic indicators. However, concerns are rising about potential new fiscal slippages, and that could undermine gains in inflation control, currency stability, and overall recovery. Does the IMF share these concerns? And second question, what is your view on the role of monetary policy at this point, especially as the Bank of Ghana prepares to review its policy stance?

Again, stepping back, on July 7th, the IMF’s Executive Board completed the Fourth Review of Ghana’s ECF arrangement. And after Board approval, Ghana received about U.S. $367 million, bringing total support to around U.S. $2.3 billion since May 2023.
With respect to the budget here, I can say that the IMF has welcomed the government’s corrective actions, including a strong 2025 budget and an audit of payables to quantify and address the pre-election fiscal slippages. The authorities have recently implemented changes to their public financial management and public procurement acts, and this helps improve the overall fiscal responsibility framework in Ghana. And the authorities have also adopted a strategy to address issues in the energy sector. I can add that the mid-year budget review is fully in line with the parameters and objectives of the IMF-supported program.

And with respect to the question on monetary policy, what I can say is that Ghana has made good progress since the beginning of the program in reducing inflation. Inflation was extremely high at the end of 2022 at 54 percent. It has now come down substantially to 14 percent at end June 2025. Going forward, it will be important for monetary policy to remain sufficiently tight, consistent with bringing inflation down to the Bank of Ghana’s target range, which is 8 percent plus or minus 2 percentage points.

QUESTIONER: I’m going to ask about digital assets. One very specifically. There’s this controversy with El Salvador that is going around and around, but the government says they’re still buying Bitcoin, and it seems that the IMF is saying they are just moving things around between wallets. And I wanted you to address that. Also, with the passage here in the U.S. of the GENIUS Act, I guess, what does the IMF, what do they think the impacts of this sort of increasing legitimization of digital assets in the U.S. is going to be in terms of other economies, in terms of the ability to implement monetary policy? I just wonder if you have any comment on that. Thank you very much for taking the question.

QUESTIONER: I have a question, specifically on El Salvador. How does the IMF assess the country’s continued Bitcoin accumulation in the context of the fiscal and transparency standards embedded in the Extended Fund Facility, the $1.4 billion program that was agreed last December? To what extent could this strategy complicate monitoring or risk management of this program?

MS. KOZACK: So, on El Salvador, I’ll start with El Salvador and then Matthew, I’ll get to your question on the GENIUS Act. So again, stepping back. So, on June 27th, the IMF Executive Board completed El Salvador’s annual Article IV Consultation and concluded the First Review of the EFF that enabled El Salvador to have access to U.S. $118 million. And so far, $231 million has been disbursed under the EFF program that was approved in February.
Program performance has been solid in El Salvador. The economy has continued to expand as macroeconomic imbalances are being addressed. The key fiscal and reserve targets were met at the time of the review with margins. And substantial progress continues with the ambitious reform agenda in the areas of governance, transparency, and financial resilience.
And risks from Bitcoin continue to be mitigated. Regarding the questions on Bitcoin, I don’t have much new to say other than as we have stated in the past, the total amount of Bitcoin held across government-owned wallets remains unchanged, and that is consistent with El Salvador’s program commitments. The accumulation of Bitcoin by the Strategic Bitcoin Reserve Fund is consistent with program conditionality. And the increases in the Bitcoin Reserve Fund relate to movements across various government-owned wallets.
And on your second question on the GENIUS Act, let me get to this one. Let me just step back for a moment, and then I’ll kind of come directly to the GENIUS Act.

So, first, the GENIUS Act covers stablecoins, and stablecoins are a key type of privately issued crypto asset that aims to maintain a stable value. They do bring potential benefits, including cheaper and faster cross-border payments, increased financial inclusion, and greater portfolio diversification. So those are some of the potential benefits. There are operational risks, of course, associated with stablecoins if they are not properly regulated under an appropriate policy framework.

Now, turning to the GENIUS Act. The GENIUS Act provides a comprehensive foundation for financial innovation and deepening. And that is balanced with consideration of consumer protection and market integrity goals and a clear identification of the institutional framework for oversight.
Now, with respect to the kind of implications of the GENIUS Act, we, of course, are continuing to very actively monitor developments of stablecoins. We are assessing the potential implications of the GENIUS Act. And for us at the IMF, what is going to be especially important are going to be the implications for the international monetary system and the potential for spillovers to other jurisdictions. So that’s work that is ongoing, and our teams are making those assessments at this time.

QUESTIONER: Any update on UAE economy outlook for GCC region and oil economy in general?

MS. KOZACK: What I can share on UAE and the GCC in general, and I’ll be — and, of course, next week as part of the WEO update, we will, of course, be providing an update for the GCC region.
So, starting with the UAE. Near-term growth in the UAE has been strong, and it is expected to remain healthy at over 4 percent in 2025. That was the assessment at the time of the April WEO. What we are seeing is robust growth in the non-hydrocarbon activity, and it is boosted by tourism, construction, public expenditure, and financial services. So those are the drivers of growth. Oil production is also increasing faster than expected, given the reversal of oil production cuts. And the UAE economy has demonstrated resilience to lower oil prices and increased oil price volatility this year.

Now, turning to the GCC, what I can say for the GCC is that despite oil production cuts, GCC growth is estimated to have rebounded to 1.4 percent in 2024. And our projection at the time of the April WEO was that it will increase further to 3.3 percent in 2025. Non-hydrocarbon output growth is expected to remain strong, supported by rapid investment, construction, and accelerated reforms to diversify the GCC economies.
Inflation remains low in the GCC, and our policy advice is for fiscal policy to remain prudent while strengthening fiscal reform implementation. And of course, we encourage policymakers in the region to continue reforms to support economic diversification. And as I noted, we will be providing an update of this assessment as part of the WEO update.
And with that, I’m going to bring this Press Briefing to a close. Thank you all 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 made available later on our website, IMF.org. Should you have any clarifications or additional queries, please do reach out to my colleagues via media@imf.org.

This concludes our Press Briefing. I wish everyone a wonderful day, and I look forward to seeing you all next time.