Source: International Monetary Fund
June 12, 2025
SPEAKER: Ms. Julie Kozack, Director of the Communications Department, IMF
MS. KOZACK: Good morning, everyone, and welcome to this IMF Press Briefing. My name is Julie Kozak. I’m the Director of Communications at the IMF. As usual, this press briefing will be embargoed until 11:00 a.m. Eastern Time in the United States. And as usual, I will start with a few announcements, and then I’ll take your questions in person on WebEx and via the Press Center. And I have quite a few announcements today, so please do bear with me.
On June 18th, the Managing Director will travel to Brussels, where she will hold bilateral meetings with officials. On June 19th, she will travel to Luxembourg to present the Euro Area Annual Consultation at the Eurogroup meeting. On June 20th, the Managing Director will be in Rome to speak at the Mattei Plan for Africa and the Global Gateway event, a joint effort with the African Continent. This event is co-chaired by Italian Prime Minister Giorgia Meloni and European Commission President Ursula von der Leyen. And from there, the Managing Director will travel to Japan from June 22nd to 24th. During her visit, she will hold meetings with Japanese officials, members of the private sector, and other stakeholders.
Turning to other management travel. First Deputy Managing Director Gita Gopinath will travel to Sri Lanka, Singapore, and Indonesia. On June 16th, she will participate in the Sri Lanka Road to Recovery Conference, where she will deliver opening remarks. And in all three countries, our FDMD will meet with officials and various stakeholders during this trip.
From June 24th through 26th, our Deputy Managing Director Bo Li will attend the World Economic Forum Annual Meeting of the New Champions in Tianjin, China. DMD Li will participate in sessions on safeguarding growth engines and the role of digital assets in Global payment systems.
On June 30th, Deputy Managing Director Nigel Clarke will participate in the Finance for Development Conference and in Sevilla, Spain.
And with that, I will now open the floor to your questions. For those of you who are connecting virtually, please do turn on both your camera and microphone when speaking. All right, let’s open the floor.
QUESTIONER: I have two questions on Ukraine. After meetings in Kyiv last month, the IMF mission emphasized the importance of Ukraine’s upcoming budget declaration for 2026-2028, which will determine the course of the fiscal framework and policies. What are the Fund’s expectations, and does the IMF have any specific requirements or policy guidelines for this document? And secondly, if I may, do you have data of the IMF Board — IMF support meetings to approve the aides review for Ukraine?
MS. KOZACK: Any other questions on Ukraine?
QUESTIONER: So, Ukraine has recently defaulted on its GDP-linked securities and, before that, failed to reach an agreement with creditors to restructure its part of its sovereign debt. How concerned is IMF with these developments, and do you see any risks for the EFF repayments from Ukraine? Thank you.
QUESTIONER: Some follow-up to your question. IMF sources indicate that Ukraine transferred $171 million repayment to the Fund on June 9th, the first repayment on loans received post-February 2022. Can you confirm this payment was received? And how does the IMF view Ukraine’s emerging shift towards repayment on wartime financing? Thank you.
MS. KOZACK: Let me take these questions for a moment, and I’ll remind you where we are on Ukraine.
On May 28th, IMF staff and the Ukrainian authorities reached Staff–Level Agreement. And this was for the Eighth Review of the EFF program. Subject to approval by our Executive Board, Ukraine will have access to about U.S. $500 million, and that would bring total disbursements under the program to U.S. $10.6 billion. The Board is scheduled to take place in the coming weeks, and we’ll provide more details as they become available. I can also add that Ukraine’s economy has remained resilient. Performance under the EFF has continued to be strong despite very challenging circumstances. The authorities met all of their quantitative performance criteria and indicative targets, and progress does continue on the structural agenda in Ukraine.
Now, with respect to the specific questions on the budget declaration, what I can provide there is that our view is that the 2026-2028 budget declaration will provide a strategic framework for fiscal policy for the remainder of the program over that period of time. It will help focus the debate on key expenditure priorities, including recovery, reconstruction, defense, and social spending. And it will also form the basis for discussion of the 2026 budget, which, of course, will also be an important milestone for Ukraine.
On the question regarding the debt, what I can say there is that we encourage the Ukrainian authorities and their creditors to continue to make progress toward reaching an agreement in line with the debt sustainability targets under the IMF’s program and the authority’s announced strategy. So that’s sort of our broad view on the debt. On the implications for completion of the review, as in all cases where a member country may have arrears to private creditors, staff will assess whether the requirements under the Fund’s lending into arrears policy are met. In light of this, again, we encourage the authorities to continue to make good-faith efforts toward reaching an agreement in light of the debt sustainability targets.
And on your question about Ukraine’s payment to the Fund, what I can say is that, in general, we don’t comment on specific transactions of individual members. What I can guide you to is that we do provide on our website detailed information on members’ repayments. And this is made available on a monthly basis. So, at the end of each month, if you look at the Ukraine page, you can see the transactions that were made. And on a daily basis, we provide detail on member countries outstanding obligations to the IMF. So that can give you a sense of how the overall obligations of Ukraine have evolved on a daily basis.
QUESTIONER: Can you give us an update on the relationship between the IMF and Senegal? Where do things currently stand with misreporting and a new program? This is my first question. And the second one I have is the Fifth Review under the Policy Coordination concerning Rwanda. The IMF stated that “Rwanda continues to demonstrate leadership in integrating climate consideration into macroeconomic policy and leveraging institutional reforms to mobilize climate finance.” Now my question is, can you please tell us concretely what kind of institutional reforms have been implemented by Rwanda?
MS. KOZACK: So, before I answer this, are there any other questions on Senegal or Rwanda? I see none in the room. Anyone online want to come in on Senegal? Okay, I don’t see anyone coming in, so let’s start with Senegal, and then we’ll move to Rwanda.
What I can say on Senegal is that we, the IMF and our team in particular, remained actively engaged with the Senegalese authorities, including during a visit to Dakar over March and April and further discussions during the Spring Meetings, which were held here in Washington in April. We do continue to work with the authorities to address the complex misreporting case that is ongoing. And addressing this complex case does require a rigorous and time-intensive process.
I also want to take the opportunity to add that the IMF supports our member countries in a variety of ways, and it goes beyond just providing financing. So, for example, in the case of Senegal, we are continuing to provide the authorities with technical assistance, including, for example, on our debt sustainability analysis that is tailored to low-income countries. We’re working closely with the authorities on compiling government financial statistics. This is being led by our Statistics Department. We’re providing technical assistance on energy sector reform, public investment management, and revenue mobilization, and that, of course, is with support from our fiscal experts.
With respect to a new program. We don’t have currently a fixed timeline for a new program, and we are awaiting the final audit outcome.
Now, turning to your question on Rwanda here. What I can say, and maybe just to step back and remind everyone of where we are in Rwanda. On June 4th, so just a few days ago, our Executive Board concluded the Fifth Review of Rwanda’s policy Coordination Instrument. Rwanda’s economic growth remains among the strongest in Sub-Saharan Africa, and that’s despite rising pressures both on the fiscal side and the external side. Rwanda, of course, we’re encouraging Rwanda to continue with a credible fiscal consolidation, strong domestic revenue mobilization, and a strong monetary policy.
With respect to your specific question, Rwanda successfully completed its Resilience and Sustainability Fund program, the RSF program, in December of 2024, six months ahead of the initial timetable. And under this RSF, Rwanda did carry out a number of institutional reforms that were focused on green public financial management, climate public investment management, climate-related risk management for financial institutions, and disaster risk reduction. So, these are some of the institutional reforms that Rwanda completed, which led us to make that statement about their leadership in this area.
I can also add that these reforms, along with some of the other reforms they’re having, they’re undertaking, such as a green taxonomy and the adoption of best practices in climate risk reporting by financial institutions. The idea is that this together will help to close information gaps, improve transparency, and that hopefully will allow for a boost to private sector engagement in advancing Rwanda’s ambitious climate goals and its broader goals toward economic development and strong and sustainable growth.
QUESTIONER: Two questions on Syria. The Fund said this week that Syria needs substantial international assistance for its recovery efforts. Firstly, can you give us an estimation of how much economic assistance Syria will need? And secondly, could you just let us know if there were any discussions around if a potential Article IV was discussed?
MS. KOZACK: Thank you. Any other questions on Syria?
QUESTIONER: Just to know if there was any demand from the Syrian government for any kind of technical assistance from the IMF to help them recover, economically speaking?
MS. KOZACK: Does anyone online want to come in on Syria? I don’t see anyone coming in. So let me step back again and give a sense of where we are on Syria.
I think, as many of you know, an IMF staff team visited Syria from June 1st through 5th. This was the first IMF visit to Syria since 2009. The goal of the visit was to assess the economic and financial conditions in Syria, as well as to discuss with the authorities their economic policy, and also to ascertain the authorities ‘ capacity-building priorities, ultimately to support the recovery of the Syrian economy. I think, as we’ve discussed here before, Syria faces enormous challenges following years of conflict that have caused immense human suffering, and it’s reduced the Syrian economy to a fraction of its former size.
At the IMF, we’re committed to supporting Syria in its efforts. Based on the findings of the mission, IMF staff, in coordination with other partners, are developing a detailed roadmap for policy and capacity development priorities for key economic institutions. And within the IMF’s mandate, this covers the Finance Ministry, the Central Bank, and the Statistics Agency. So those would be the areas where we will be focusing in terms of the detailed roadmap on priorities, economic and capacity building priorities.
Syria, as noted, will need substantial international assistance. We don’t yet have a precise estimate of that assistance. But what I can say is this will also — it will not only require concessional financial support, but also substantial capacity development support for the country. And that’s basically where we have left it with the Syrian authorities. And, of course, we will continue to engage closely with them, and we are committed to helping them, supporting them on their recovery journey.
QUESTIONER: Is the date of the IMF mission to Argentina already said? And based on that definition, when would the First Review of the agreement could take place? And another one, in the last few days, the Argentina government has launched different mechanisms to try to increase the level of foreign exchange reserves. Is the IMF worried that Argentina will not reach the target set in the agreement? And could the IMF give Argentina a waiver on this? Thank you very much.
MS. KOZACK: Okay, any other questions in the room on Argentina? I know we have several online.
QUESTIONER: Thanks for taking my questions. I would like to know how does the IMF evaluate the listed economy measures, particularly the issue of the measure to use undeclared dollars. Thank you.
QUESTIONER: My first question is about the reserve target for the new program with Argentina. Central Bank is about $4 billion below the target set for June. Also, some operations are expected that could increase their reserve stock. Officials said on Monday evening that local currency bonds can now be purchased with U.S. dollar and that the minimum time requirement for foreign investors to hold onto some Argentina bonds will be eliminated. The IMF is concerned that the Central Bank is not accumulating reserves touch foreign trade and is only receiving income touch debt. Is the consensus with the authorities to postpone the Frist Review and allow time for Argentina to activate credit operation in order to close — to get closer to the target set for June, or Argentina should resort to a waiver? And what is your view on the recent measures?
And that second question is about the possibility of an IMF mission arriving in Argentina in the coming weeks. Is that possible? Would it be a technical staff mission, or could the Managing Director or Deputy Executive Director also come? Thank you very much.
QUESTIONER: So, the question is the same as (connection issue) First Review of the agreement signed in April (connection issue)
QUESTIONER: -Is the IMF considering granting a waiver and also if they build up.
MS. KOZACK: You’ve broken up quite a bit, and now we’re not able to hear you, so we’ll try to get you back, or I think what I understood from your question is it’s broadly along the same lines as some of the other questions. What we can do is if you want to connect via the Press Center, I can read the question out loud. But what I’m going to do is move on.
QUESTIONER: Basically, echoing my colleague’s questions on the timing of the mission and whether an extension was granted to meet the reserve’s target, well, for the First Review generally. And separately, Argentina has July 9th dollar debt payments, which will obviously affect reserves. How will that payment and timing affect your calculus of the reserves target within the First Review? Thank you.
QUESTIONER: Well, yes, also echoing my colleague’s question regarding whether the timeline for the First Review, the end date remains this Friday, which was what it said on the Staff Report. And also, there was a ruling lately, these past few days, against former President Cristina Kirchner. I was wondering if that raises any concerns in the IMF regarding any political conflict or any subsequent economic impact.
MS. KOZACK: I think we’ve covered all the questions on Argentina. Anyone else on Argentina? Okay, very good. So, let me try to give a response that tries to cover as many of these questions as I can. So again, I’m just going to step back and provide where we are with Argentina.
So, on April 11th, the IMF’s Executive Board approved a new four-year EFF arrangement worth $20 billion for Argentina. The initial disbursement was $12 billion, and the goal of the program was to support is to support Argentina’s transition to the next phase of state stabilization and reform. The Milei administration’s policies continue to evolve and to deliver impressive results, as we have previously noted.
In this regard, we welcome the recent measures announced this week by the Central Bank and the Ministry of Finance as they represent another important step in efforts to consolidate disinflation, support the government’s financing strategy and to rebuild reserves and, more specifically, steps to strengthen the monetary framework and to improve liquidity management. These are important to further reduce inflation and inflation expectations. The Treasury’s successful reentry into capital markets and other actions to mobilize financing for Argentina are also expected to boost reserves, and stability overall for the country continues to be supported by the implementation of strong fiscal anchor in the country.
Our team continues to engage frequently and constructively with the Argentine authorities as part of the program’s First Review. I can add that a technical mission will visit Buenos Aires in late June to assess progress on program targets and objectives and to also discuss the authority’s forward-looking reform agenda. More broadly and despite the more challenging environment, the authorities, as I said, have continued to make very notable and impressive progress. So, I will leave it at that.
Let’s go online for a bit, and then we’ll come — no, let’s go right here in the back. You haven’t had a question, and you’re in the room.
QUESTIONER: Given the recent escalation in global trade tensions and the effect of the tariffs, what is the IMF’s assessment of how these developments are affecting emerging economies? And what policy recommendation does the IMF have for countries facing increased external pressures?
MS. KOZACK: Okay, let me answer — let me turn to this question on emerging markets, a very important constituency and part of our membership here at the IMF. So, let me start with where we were and what our assessment was as of April.
In April, when we launched our World Economic Outlook, we projected growth in emerging and developing countries to slow from 4.3 percent in 2024 to 3.7 percent in 2025 and then to come back a little bit to 3.9 percent in 2026. We did have at that time also significant downgrades for countries most affected by the trade measures, and that includes China, for example. We have seen since then that there have been some positive surprises to growth in the first quarter for this group of countries, including China. We have also seen recent reductions in some tariffs, and that represents kind of an upside risk to our forecast. And, of course, we will be updating our forecast, including for this group of emerging and developing countries, as part of our July WEO update, and that will be released toward the end of July.
In terms of our recommendations, we recommend what we would call a multi-pronged policy response. So first, to carefully calibrate monetary policy and also macroprudential or prudential policies to maintain stability in countries. We also recommend for this group of countries, but for all of our members, to rebuild fiscal buffers to restore policy space to respond to, of course, future shocks that may occur. For countries that may face particular disruptive pressures in the foreign currency, foreign exchange market, we would say that they could pursue targeted interventions if those instances are disruptive. We also are encouraging again all of our countries to undertake the necessary reforms to no longer delay reforms associated with boosting productivity and longer-term growth.
I think maybe stepping back, we’ve been talking for quite some time in the IMF about a low growth, high debt environment. And this, of course, applies to this group of countries as well. So, dealing with the debt side, of course, is important through fiscal consolidation, but also, very importantly, boosting growth and productivity growth. So, countries can also have a more prosperous society and also deal with some of their debt issues through stronger growth is also very important.
All right, let me go online, and then I’ll come back to the room. Let’s see. Online, I see a few hands up.
QUESTIONER: My question is on Japanese tour conducted by Managing Director. Could you give more details on how Japanese tour played this month? For example, is there any chance for giving speeches or press conference and so on?
MS. KOZACK: So, as I said, the Managing Director will visit Japan later this month. Her visit will mostly entail meetings with government officials and also the business community as well as other stakeholders. She will have an opportunity to also do some outreach, and we can provide further details to you as her agenda becomes more concrete. But she is very much looking forward to the visit. Japan, as I think we’ve said before, is an important partner for the IMF. And the Managing Director is very much looking forward to meeting with Japanese officials and talking more broadly to other stakeholders in Japan about the important partnership that the IMF has with Japan.
I see some other hands up online. Unfortunately, I can’t see. So, I think if you’re online and you have your hand up, just jump in.
QUESTIONER: You already referred to your own economic outlooks when you talked about emerging markets. But I was — I wanted to ask you, does the IMF anticipate a similar growth downgrade as we’ve just seen for the World Bank this week and its economic assessment? Because, of course, back in April, the cutoff point for your last report was just as Donald Trump was announcing the Liberation Day tariffs.
MS. KOZACK: Okay, so thank you for that. Any other questions on the global outlook? Okay, so let me take this one, and then we’ll come back to some other questions.
So, what I can say in terms of the forward-looking, I mean, first, I want to start by reiterating that we will release a revised set of projections in July as part of our regular WEO update. What I can add is that since we released our World Economic Outlook, what we call the WEO, in April, we have seen some, you know, some data come in and some other developments. So first, we have seen some trade deals that have lowered tariffs, notably between the U.S. and China, but also the U.S. and the UK, and at the same time, the U.S. has raised further tariffs on steel and aluminum imports. So taken together, such announcements, combined with the April 9th pause on the high level of tariffs, these could support activity relative to the forecast that we had in April. But nonetheless, we do have an outlook for the global economy that remains subject to heightened uncertainty, especially as trade negotiations continue.
I can also add that recent activity indicators reflect a complex economic landscape. So, this is recent high-frequency data. We have some outturns in the first quarter, which indicated a front-loading of activity ahead of the tariff announcements that took place in April. And some high-frequency indicators also show some trade diversion and unwinding of that earlier front loading. So, this is kind of the more recent indicators. So, all of this creates kind of a complicated picture for us with some upside risk, some other developments, and we’ll take all of these developments together into account as we update our forecast toward the end of July in our WEO.
QUESTIONER: When you say support activity, do you mean there’s a chance it could be an improved outlook?
MS. KOZACK: So yes, by support activity, what we mean is that it’s kind of positive, it’s a little bit of a positive sign for economic activity. So that’s related, though, I would say, to the specific announcements. So, so just going back to say, the announcements of the trade deals that have lowered tariffs, particularly the ones between the U.S. and China and the U.S. and the UK, those could be supportive or a bit more positive for economic activity going forward. But the overall picture is both complicated for the reasons that I mentioned.
We have some front loading in the first quarter. Some of that seems perhaps to be unwinding in more recent indicators. And we also, of course, have to remember that we are in an environment of very high uncertainty, and uncertainty, in general, tends to dampen economic activity.
So, the overall picture is quite complex. And so, we will take all of these factors into account as we move forward with our forecast in July. And, of course, between now and when we release our forecast later in July, we would expect that there will be further data releases. And also, there is the possibility that there can be further announcements that we would have to take into account or further developments that we would have to take into account as well.
Let me just stay online for another minute. I think I have one more hand up online or two hands online.
QUESTIONER: My question is about Egypt. I was hoping to ask you if the Egyptian authorities have requested a waiver from the Fund for any of the requirements related to the Fifth Review of the country’s ongoing loan program and specifically if a waiver has been requested related to targets for divestment from state-owned assets. And if you have any update on the timing of the Fifth Review, that would also be very helpful. I know there were some suggestions that the Fifth Review could be combined with the Sixth Review, in which case we wouldn’t see it until September rather than the June date that had previously been talked about. Thank you.
MS. KOZACK: Anyone else on Egypt?
QUESTIONER: My question is related to the previous one by my colleague. She asked about the state-owned companies to be listed for IPOs or for private sectors to be having a bigger stake in the economy. How the IMF evaluate the progress achieved by the Egyptian authorities during that? And also, when the Fifth Review to be finished after the physical meetings happened in past May? And what are the most recent progress achieved until now during this? And also, I’d like to ask about how IMF evaluated the latest step by Egyptian government to give the Minister of Finance the right to issue sukuk in the guarantee of place in Red Sea as published in the last two days.
MS. KOZACK: Okay, thank you. Anyone else have questions on Egypt? So, on Egypt, as I think many of you know, an IMF team visited Cairo. From May 6th to May 18th, the team held productive discussions with the Egyptian authorities on their economic and financial policies. Discussions are continuing virtually to finalize agreement on remaining policies and reforms that could support the completion of the Fifth Review under the EFF. So again, discussions around the Fifth Review are continuing virtually.
As we have said here before, Egypt has made clear progress on its macroeconomic reform program with notable improvements in inflation and in the level of international reserves. As Egypt’s macroeconomic stabilization is taking hold, it’s now the time for efforts to focus on accelerating and deepening reforms, including reducing the footprint of the state, leveling the playing field, and improving the business environment in Egypt.
What I can add is that in order to deliver on these objectives, particularly with respect to reducing the footprint of the state, leveling the playing field, et cetera, it’s important to decisively reduce the role of the public sector in the economy. The implementation of the state ownership policy, as well as the asset divestment program in sectors where the state has committed to reduce its footprint, will be playing a critical role in strengthening the ability of Egypt’s private sector to contribute to growth and activity in the Egyptian economy, which will ultimately support improvements in livelihoods of the Egyptian people. We remain committed to supporting Egypt in building economic resilience and fostering stronger private sector-led growth.
On some of the more specific questions related to Sukuk, I don’t have a response here, but we’ll come back to you bilaterally.
QUESTIONER: It’s a quick overall question. Could you remind us the condition for a country to come under IMF supervision? Does it require specifically a program, or can it come from the IMF itself? Thank you very much.
MS. KOZACK: Can you clarify what you mean by IMF supervision? Just so I understand.
QUESTIONER: To be perfectly honest, in the past few days, we had comments from the French government about the fact that it could become under IMF supervision. I’m not very interested in specifically about France, but just in general overall how IMF comes to work with governments. What are the conditions for the IMF to step in and come to help the government? Thank you very much.
MS. KOZACK: Very good. So, let me maybe take this opportunity to step back and explain kind of the three big pillars of the work of the IMF.
So, the first is policy advice, and this is done mainly through the Article IV consultation process. The reason it’s called Article IV is because it’s in Article IV of our Articles of Agreement, and every member country of the IMF — so, we have 191 member countries — every member country commits when they join the IMF to participate in the Article IV consultation process. So that applies to every member. And that is a process that I know you here are very familiar with, where the IMF sends a team, and we conduct an assessment of the economy, and we provide policy advice to the country. That’s done for all members.
Another leg or another pillar of what we do at the IMF is capacity development. And for capacity development, this is at the request of the member. So, this could be, you know, very specific advice on a specific area where our technical expert would go and do sort of a deep dive analysis and provide detailed policy recommendations. But it’s really meant at building state capacity. So often, this is done in areas such as revenue mobilization or public financial management, statistics, monetary policy frameworks, and debt management. These are some of the areas where we would provide technical assistance to countries. That’s at the request of the member.
And the same is true for our financial support. So, for financial support, this is done again at the request of the member country. The member would request financial support from the Fund, and then the Fund would then send a team and ultimately develop a program that reflects the commitments of the authorities. But that program would need to be aimed at getting the country back on its feet. In our technical language, it’s restoring medium-term viability for the country. And that financing program has a balance between financial resources that the Fund provides and also policy measures taken by the part of the authorities. But that, again, is at the request of the member country.
QUESTIONER: So, my question is about cryptocurrency and digital assets. What is the IMF’s view right now on the daily use transactions by people, by governments, in paying and accumulating Bitcoin and other digital currencies? What risks and opportunities do you see on behalf of the IMF and what shall be done on the governmental level to implement any additional safeguards requirements to make this like a daily routine operations? Thank you.
MS. KOZACK: Okay, so I think on the broad topic of kind of crypto assets, what we can say is that they have gained popularity as an asset class. And also, what we see is that the underlying technology, which is a digital ledger that is shared, trusted, and programmable, is broadly viewed as highly valuable. And that technology may have broader societal benefits. So, we do see crypto assets as a speculative asset as an asset class. At the IMF, we generally don’t recommend crypto assets as legal or cryptocurrencies as legal tender. We also do see that there are some potential risks that could arise from crypto assets. These include risks to financial stability, to consumer and investor protection, and also to market integrity.
So, in order to balance, in a sense, the opportunities based on the technology and a new asset class with some of these risks, what we advise countries to do is to establish a robust policy framework to effectively mitigate some of the risks while allowing society to take advantage of the benefits or the opportunities that arise from this new technology.
QUESTIONER: The Bank of Russia recently cut its key interest rate from 21 percent to 20 percent, marking its first easing move since September 2022. From the IMF perspective, what are the implications of this monetary policy shift? Thank you.
MS. KOZACK: So, on Russia, let me just step back a minute, and I’ll provide our overall assessment of the economy, and then I’ll get to your specific question.
So, what we see in Russia is that last year, we saw the economy overheating, and now what we observe in Russia is a, is sharp slowdown of the economy, with growth slowing but inflation still relatively elevated. Growth in 2025 is expected to slow to 1.5 percent based on our forecast from April, and this was compared to 4.3 percent in 2024. And this reflects policy tightening, cyclical factors, and also lower oil prices.
Now, with respect to the action by the Central Bank, as you noted, the Central Bank indeed reduced the key policy rate from 21 percent to 20 percent for the first time. This was the first reduction since September of 2022. And the action taken by the Central Bank was in response to slowing growth, which I just mentioned, and also some easing of inflation pressures.
So, as I noted, inflation still remains high. It was just under 10 percent in May. But our forecast has inflation declining going forward. So, we expect inflation to ease to 8.2 percent by the end of this year. And we anticipate that inflation will turn to the target of 4 percent in the first half of 2027. So that’s the IMF forecast. So, the inflation challenge for Russia remains, and it’s appropriate. Therefore, that monetary policy remains tight, and even with this cut, monetary policy is still tight.
I am going to now take the opportunity to read one question or some questions on Ghana and some questions on Sri Lanka, and then we’ll bring the Press Briefing to a close. So, on Ghana, I have three questions. The first one is about an update on when Ghana’s program will be presented to the Board following Staff–Level Agreement.
The second question is about the amended Energy Sector Levy Act to add GH₵1 per liter on petroleum products to defray the cost of fuel purchases for thermal plants. Has the IMF taken note of this, and what’s its position on using taxes versus passing these costs through tariffs?
The third question on Ghana is whether the IMF is looking at the possibility of revising Ghana’s IMF program targets as the cedi’s sharp appreciation against the dollar has affected many variables that influence these targets set by the Fund?
So let me take a moment to just respond on Ghana. So again, stepping back to where we are on Ghana. On April 15th, the IMF staff and the Ghanaian authorities reached Staff–Level Agreement on the Fourth Review of Ghana’s Extended Credit Facility. Upon approval by our Executive Board, Ghana would be scheduled to receive about U.S. $370 million, bringing total support under the ECF to $2.4 billion since May of 2023. We anticipate bringing the review to our Board in early July, so in just a few weeks.
What I can add about the question about the cedi’s sharp appreciation is that you know, of course, as we look at a program, we look at all of these developments, including, of course, developments in the exchange rate. And so, future program reviews will provide an opportunity for the team to carefully assess all of the evolving macroeconomic and financial conditions, including exchange rate movements, and to ensure that the program’s targets and objectives remain appropriate and achievable.
And on the fuel levy, what I can say is that this is a new measure that will help generate additional resources to tackle the challenges in Ghana’s energy sector, and it’s also going to bolster Ghana’s ability to deliver on the fiscal objectives under the program.
And I’m going to read one last set of questions on Sri Lanka, and then we will bring the Press briefing to a close. So, we have a number of journalists asking about Sri Lanka. So there’s — we’re consolidating the questions here. So, these journalists are asking for updates on the IMF’s view on Sri Lanka’s progress in implementing cost recovery, electricity prices, and the automatic price adjustment system. They’re asking about the date for the Executive Board’s consideration of the Fourth Review under the program.
And another question, has the government raised the issue of recent global shocks and possible further pressure on the economy and its ability to meet its reform program targets? How do we rate the new government’s approach to corruption?
QUESTIONER: My question is, recently Sri Lankan president announced that the existing IMF program is likely (inaudible) that it will be the final program for the country as it tries to achieve financial independence. What is the IMF’s view on this? Is it achievable given the current situation in Sri Lanka? And what is the progress on the IMF Board approval for the next review? Thank you.
MS. KOZACK: All right, so again, just stepping back and reminding where we are on Sri Lanka.
So, on April 25th, IMF staff and the Sri Lankan authorities reached Staff–Level Agreement on their fourth review of Sri Lanka’s economic reform program. The program and Sri Lanka’s ambitious reform agenda continue to deliver commendable outcomes. Performance under the program remains strong overall, and the government remains committed to program objectives. Completion of the review is pending approval of the IMF’s Executive Board, and it is contingent on the completion of prior actions.
What I can add is that our IMF team, of course, is closely engaged with the authorities to assess the measures that were recently announced by the regulator on June 11th. And these include a 15 percent increase in in electricity tariffs and the publication of a revised bulk supply transaction account guidelines for this. So, these were two prior actions. Once the review is completed by our Executive Board, Sri Lanka would have access to about $344 million in financing, and we will announce the Board date for Sri Lanka in due course.
With respect to some of the more specific questions on governance, what I can add is that in end-February, the government published an updated government action plan on governance reforms. And this action plan included important commitments such as enacting a public procurement law, an asset recovery law, and other actions that are aligned with the recommendations that were included in the IMF’s Governance Diagnostic Report.
On the question about kind of the global situation and the impact on Sri Lanka, what I can say there is that, like for all countries in an environment of high uncertainty around policy and in general, high global uncertainty, this poses, of course, risks to an economy like Sri Lanka’s, as it does to many others. If some of the risks associated with high global uncertainty were to materialize, the way we will approach this will be to work very closely with the authorities first to assess the impact of any downside risk that materializes, and then we will also work with the authorities to consider what are the appropriate policy responses within the contours of the program. And more broadly, for all countries, including Sri Lanka, it’s really critical for each country to sustain its own reform momentum. Sustaining reform momentum, both with macroeconomic policy reforms and, importantly, some of the growth-enhancing reforms that we were talking about earlier, is critical for all countries in our membership, including Sri Lanka.
And on the question regarding the president’s remarks, I think there, what I can simply say is to repeat that, you know, Sri Lanka has made commendable progress, you know, in implementing some very difficult but much-needed reforms. The effects — these efforts are really starting to bear fruit. We see a remarkable rebound in growth following Sri Lanka’s crisis. Inflation is low, international reserves are continuing to grow, revenue collection on the fiscal side is improving, and the debt restructuring process is nearly complete. So, I think it’s really important to recognize, you know, the significant efforts that Sri Lanka has taken and also the tremendous progress that has been made. Right now, of course, we are very much focused on the current EFF, and therefore, as I mentioned, it’s going to be critical for Sri Lanka to sustain the reform momentum through the remainder of this EFF program.
And with that, I am going to bring this Press Briefing to a close. Let me thank you all for your participation today. As a reminder, as usual, this briefing is embargoed until 11:00 A.M. Eastern Time in the United States. A transcript will be made available later on IMF.org, and should you have any clarifications or additional queries, please reach out to my colleagues media@imf.org. This concludes our Press Briefing for today. I wish everyone a wonderful day, and I do look forward to seeing you all next time. Thank you very much.
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