Source: International Monetary Fund
February 6, 2025
INTERNATIONAL MONETARY FUND PRESS BRIEFING
Washington, D.C. Thursday, February 6, 2025
P R O C E E D I N G S
- KOZACK: Good morning, everyone. It’s great to see you all, here in person and online. Welcome to the first IMF press briefing for 2025. I’m Julie Kozak, Director of the Communication Department. As usual, this briefing is embargoed until 11:00 a.m. U.S. Eastern Time. I’ll start with a few announcements and then I’ll move to take your questions in person, on WebEx, and via the Press Center.
First, Managing Director Kristalina Georgieva will travel to Ethiopia, the United Arab Emirates, and Saudi Arabia. The Managing Director will visit Ethiopia on February 8th and 9th to meet Prime Minister Abiy and his team, and this visit will take stock of the economic reforms and progress that is being made by the country. She will also meet with stakeholders, including representatives of the private sector.
The Managing Director will also travel to the United Arab Emirates to participate in the Arab Fiscal Forum on February 10th and the World Government Summit on February 11th where she will deliver keynote remarks. On February 16th and 17th, the Managing Director will participate in a two-day conference in Saudi Arabia on building resilience of emerging market economies. The conference is co-organized by the IMF and the Saudi Finance Ministry.
The First Deputy Managing Director Gita Gopinath will travel to Japan to join the Article IV mission. She will participate in meetings with the authorities and hold a press conference on February 7th at 10:30 a.m. Tokyo time.
Finally, Deputy Managing Director Okamura will travel to Japan to participate in a jointly organized IMF-JICA conference on Economic and Fiscal Policy Challenges and Prospects for Asia. And this is scheduled for February 12 and 13.
And with that I will now open the floor for your questions. For those connecting virtually, please do turn on both your camera and the microphone when speaking. Let’s get started.
QUESTIONER: Hi,I was just wondering, you mentioned Ethiopia. How concerned are you about sort of countries with large IMF programs which also receive a substantial amount of support from USAID, considering the recent executive order, countries like Ethiopia and Ukraine, for example. Thanks.
KOZACK: Thanks very much. So with respect to your question, you know we are closely following the announcements and developments regarding USAID. At this stage it’s too early to gauge the precise impact on the countries that it supports. We’ll wait for clarity on the next steps, including any changes to the scope of the work of USAID.
QUESTIONER: So, the IMF mission is going to start working in Ukraine this month. Could you specify please what main issues will the Fund plan to focus on during the Seventh Review of the EFF program. And the second question is about the pension reform in Ukraine. Ukrainian government committed to starting this reform this year. Could you elaborate on what key changes the IMF expects from Ukraine on this area? Thank you.
KOZACK: Are there any other questions on Ukraine?
QUESTIONER: So, according to latest information, the review of the EFF is scheduled to begin this month. When the decision on the disbursement is going to be made and what amount of funds are going to be provided with this fund? And the follow-up, how much money is left in the EFF according to the current situation? Are there any plans to expand this program? Thank you.
QUESTIONER: Just to follow up on the question about Ethiopia. Obviously, the USAID cuts also affect Ukraine pretty significantly. And I wonder, you know, both in those cases and in all cases involving USAID funding, whether you are working with the US ED here and sort of sending a message about the impact. So, whether you’ve kind of figured it out across the enterprise and across all the countries that the IMF works with as well. Thanks.
KOZACK: Anything else on Ukraine online? Okay. So, on Ukraine, just to remind everyone of the context. So, on December 20th, the IMF’s Executive Board approved the Sixth Review of the EFF program. That enabled the disbursement of $1.1 billion and that brought total disbursements under the program to $9.8 billion. And the total size of the program, I believe, was $15.6 billion. So, the difference between those two is what would be remaining. At that time, the Board assessed that program performance remained strong. The authorities had met all of the benchmarks and prior actions for the review.
With respect to the next mission, the technical work for the upcoming review is underway. The mission dates are in the process of being finalized, and once we have them, we’ll be sure to communicate that. During this upcoming mission, the IMF staff will engage with the authorities on fiscal policy, including progress on revenue mobilization, monetary policies for 2025, and also progress in ensuring that debt sustainability and fiscal sustainability are restored. Staff will also be reviewing governance reforms, which remain a key pillar for the program. Based on the approved calendar of disbursements, subject to completion of the next review and, of course, subject to Board approval, Ukraine would have access to about $900 million for that next review.
With respect to pension reform, the government has committed to launch pension reforms this year in 2025, and they would be spearheaded by the Ministry of Social Policy. And those reforms are supported by external partners, notably the World Bank. What I can also add is that the authorities are in the process of developing a comprehensive set of proposals for pension reforms, but it’s too early to tell exactly what will be included in those proposals and what the changes may be.
And on the second question, I don’t really have much to add to what I already said, other than obviously we’re paying close attention and we’re awaiting further details.
QUESTIONER: Hi, good morning. Thank you for taking my question. Just on Syria, can you give us an update if the IMF has made any contact with the new government and if there are any plans to provide a loan package to the country? Thank you.
KOZACK: We’re closely monitoring, obviously, the situation in Syria, and we stand ready to support the international community’s efforts to assist Syria’s reconstruction as needed and when conditions allow. With respect to our engagement, we have not had a meaningful engagement with Syria since 2009, which was the time of the last Article IV Consultation, and this has been due to the difficult security situation in the country.
QUESTIONER: I have two questions, and they’re Caribbean-related questions. Can you provide a breakdown of the growth projections for the Caribbean region, more specifically, focusing on St. Kitts and Nevis, and what factors are driving the projected growth or decline outlook for the region, more specifically, the Caribbean region?
KOZACK: Okay. All right, let me step back and give a little bit of an overview of where we stand, what our view is on the Caribbean. So, following the rapid recovery after the Pandemic, real GDP growth in the region has normalized in recent years. Average GDP growth for the region, and this is excluding Guyana and Haiti, is estimated at 2.2 percent for 2023, 2.4 percent for 2024. And growth, our projection is for growth to remain relatively stable at 2.4 percent in 2025.
Broadly speaking, there are sort of two groups of countries in the Caribbean. So, we look at tourism-dependent economies, and there we see that growth in tourism economies has slowed as tourism arrivals have returned to pre-Pandemic levels. And then for commodity-exporting countries, they have faced challenges in the energy sector but have overall benefited from robust performance in their non-energy sector, and that has been driven by supportive and economic policies.
I can also add that inflation in most Caribbean countries has moderated significantly over the past few years, and the decline was due to lower global commodity prices and easing of supply chain disruptions. And we expect inflation to remain moderate in the years to come.
QUESTIONER: My question is on the comment by Managing Director Georgieva in Davos. MD mentioned in Davos clearly that more cooperation in the regional levels might be needed in the future in such a fragmented world and IMF would support such a movement. And could you give me some more detailed plans?
KOZACK: Thanks very much for the question. What the Managing Director noted in Davos is that we are seeing shifting patterns in global cooperation, in trade, and in other areas, including financial and capital flows. And of course, as a global institution, what will be important for us is as we engage with our membership, right, to take all of this into account to ensure that we can give our members the best policy advice within our mandate of economic and financial stability.
QUESTIONER: Thanks so much, Julie. I wanted to ask you very broadly about the changes that are happening in the United States and the tariffs that President Trump has announced. Now the implementation of the tariffs on Canada and Mexico has been delayed to March 1st. And, you know, it’s not clear what will happen there exactly. But one of the, you know, the tariffs on China have stayed in place. China has now announced tariffs that will kick in on February 10th. The IMF has warned repeatedly against rising protectionism and also kind of cataloged the thousands of trade restrictions that have been put in place and growing over time since COVID. Can you just walk us through what your perception is right now? The markets have been really all over the place, you know, sort of up and down depending on the day’s mood. Do you see this period of trade uncertainty that you warned about in the WEO, kind of really affecting and dampening global growth prospects? Thanks.
KOZACK: Thanks very much. Let me see if anyone else has questions on this broad topic.
QUESTIONER: Thank you. Yeah, I was just wondering, just to follow on the previous question, how you sort of think about the unpredictability of of these tariffs or the discussions around the tariffs, the uncertainty that that kind of brings up, and potentially how that could affect monetary policy. We’ve seen a lot of analysts talking about how they no longer expect the Fed to cut, or they expect the Fed to cut maybe only once this year. I’m just sort of wondering how you’re kind of in real time or as close to real time as you can, sort of taking on board that unpredictability when you think about the U.S. economy and the impacts for global growth. Thanks.
KOZACK: Great. And you also had a question.
QUESTIONER: Yes. Just following up with my colleagues. What sort of study, if any, has the IMF undertaken to better understand the global ramifications of these tariffs? We know they’re on pause for another 30 days or so or less. And what sort of impact would small states that are heavily dependent on the United States feel going forward?
KOZACK: And let me go online to see if anyone online has a question along these lines.
QUESTIONER: It is very similar. Just wondering the fact that it’s not just tariffs that have imposed on China, but the threat of tariffs on countries across the EU, Canada, and Mexico, and what effect that has on the global outlook. Thank you.
KOZACK: Okay. Thank you. Anyone else online want to come in on this topic? Okay. So, what I can say on this issue is we’re following the announcements by the U.S. with respect to tariffs on Chinese goods and potentially Canadian and Mexican goods. We’re following these announcements. We believe that it’s in the interest of all to find a constructive way forward to resolve this issue.
With respect to the assessment, assessing the full impact of these measures of tariffs, it’s actually going to depend on several factors, and let me lay those out. One of those factors is going to be the responses of the countries concerned. Another factor will be how firms and consumers react. And finally, how the measures evolve over time will also have an impact.
So, at this stage, that’s what I can share with you. We will, of course, have more information over time and in due course as the situation evolves.
QUESTIONER: Julie, I’m sorry, I think the question is, like, can you say something about what uncertainty does to the global economy? I mean, you’ve talked about this in WEO’s before, but do you see this as a period of heightened uncertainty now that Trump has taken office? And, you know, what is the impact of that uncertainty on things like investment and all this, you know, the sort of categories of economic indicators that we look at?
KOZACK: So, I think what I can say is, of course, I would refer you to the WEO for some of those analysis. And again, assessing the full impact of this will include all of the factors that I just laid out. And we would take into account issues related to uncertainty, market reactions, et cetera, in an assessment that we will ultimately undertake as the situation evolves and once we have more information.
Let me now go online. I see a couple of hands up. So, if you’re online, please go ahead and jump in.
QUESTIONER: Hi, good morning. Thank you for taking my question. Well, has the letter of intent between the IMF and Argentina been prepared? Or let me ask in a different way. Are the negotiations between Argentina and the IMF already in the final stage?
KOZACK: Thanks. Other questions on Argentina?
QUESTIONER: Could you give me any updates on the negotiations of the new agreement and what are the most challenging issues they are facing right now? And also yesterday, Minister Luis Caputo said a new agreement will not imply a devaluation of the peso or the exit of the exchange restrictions the next day. Does the IMF agree with this statement?
KOZACK: Thanks. Others on Argentina?
QUESTIONER: Hi, Julie. I was wondering also if you could give some input regarding the meetings that the mission in Buenos Aires had, if they have only been talking to government officials or if they are also contacting unions and other opposition representatives. And also, the new crawling peg of 1 percent has started this February. I was wondering if that was a matter of discussion between the staff and the government.
KOZACK: Thanks, other questions?
QUESTIONER: Yes, thank you, Julie. So, my question is also on the crawling peg. So, is the IMF concerned about the greater exchange rate delay generated by this reduction of the crawling peg from 2 percent to 1 percent started the 1st of February?
KOZACK: Any other questions on Argentina? Okay, I hear two more. Please go ahead.
QUESTIONER: Hi, Julie, I wanted to know if Argentina has already paid a debt due on February 1st or when is it expected to do so? And if there is a meeting plan between Argentina authorities and the IMF network staff in Washington.
KOZACK: Thank you. Next.
QUESTIONER: Good morning. The question is if Argentina and the IMF comes to a new agreement, should it be like we are talking here in Argentina about $5 million? It will be for anything special, for example, to leave what we call cepo, or it depends on the Argentine authorities.
KOZACK: Any other questions on Argentina? Okay, I do not see anyone coming in.
So, on Argentina, what I can share is first that, as the Managing Director highlighted after her meeting with President Milei last month, we recognize Argentina’s tremendous progress in reducing inflation, stabilizing the economy, returning to growth, and with poverty finally starting to decline. We continue to engage constructively with the Argentine authorities. And a staff mission did recently visit Buenos Aires to advance discussions on a new program. The new program will aim to build on the gains that have been achieved so far, while also addressing the remaining challenges that the country faces. Constructive and frequent discussions continue, and we will provide further details on next steps when we have them.
I can also just add that to sustain early gains, there is a shared recognition between the Fund staff and the Argentine authorities about the need to continue to adopt a consistent set of fiscal, monetary, and foreign exchange policies while furthering growth-enhancing reforms. I also know that you have a lot of interest, and there were a lot of detailed questions here, but given that the discussions are continuing and there has been good progress so far, we do want to ensure that there is space for staff and the authorities to continue these constructive discussions. And of course, we will communicate more when we have further details.
Okay, let us go online because I see a few hands up.
QUESTIONER: My question is, when do we expect Board of Directors to discuss Egypt Fourth Review?
KOZACK: Do we have other questions on Egypt?
QUESTIONER: Hi, I’d like to ask, in addition to that, when the board does discuss Egypt’s Fourth Review, will it also be discussing an additional RSF for Egypt? There have been some reports that Egypt is in line to receive as much as $1 billion.
KOZACK: Other questions?
QUESTIONER: I just wanted to ask, in terms of the assessment of Egypt, but also other countries in the region, to what extent you are calculating additional costs and spending needs that have to do with Gaza and with the potential absorption of Palestinian refugees that has been proposed.
KOZACK: Okay, any other questions on Egypt? I see I have two questions that have come through the press center, which I will read aloud. So, the first is when will the IMF’s Executive Board complete the Fourth Review of the Extended Arrangement under the Extended Fund Facility for Egypt?
The second question is regarding the Executive Board’s approval of the Fourth Review of Egypt’s program, could it be this month? Does the IMF have updates on your projections for Egypt’s economy in light of regional updates?
Let me share with you where we are on Egypt. On December 24, the IMF staff and the Egyptian authorities reached a staff-level agreement on the Fourth Review of the EFF. This review is subject to approval of our Executive Board and subject to that approval, Egypt would have access to about $1.2 billion. Preparations for Board consideration are underway, and the Board meeting is expected to take place in the coming weeks.
In light of the difficult external conditions and challenging domestic environment, the IMF staff and the Egyptian authorities agreed to recalibrate the fiscal consolidation path, and this was agreed in December, I would highlight, to create fiscal space for critical social programs benefiting vulnerable groups and the middle class while ensuring debt sustainability.
Looking forward, reform priorities comprise lowering inflation, sustaining exchange rate flexibility, and liberalized access to foreign exchange. In addition, the program aims to boost domestic revenues. It aims to improve the business environment. It aims to accelerate disinvestment or divestment rather and leveling [of] the playing field between state-owned enterprises and the private sector. And of course, it also aims to enhance governance and transparency.
With respect to the question on the RSF, a policy package of reforms will be considered by the Fund’s Executive Board along with the Fourth Review of Egypt’s program.
And lastly, there is no connection at the moment between some of the announcements in Gaza and the and the Egypt program.
QUESTIONER: Hi, I wonder if I can just clarify. On the RSF, you say a policy package of reforms that also presumably comes with some additional funding. Can you confirm whether the amount of up to $1 billion is accurate?
KOZACK: I can’t confirm now the precise amount of the RSF, but of course as we have more information, we will provide that.
QUESTIONER: Thank you so much.
KOZACK: Let us go online. I see another hand online and then we will come back. Just one follow up, a follow up. Go ahead.
QUESTIONER: You cannot confirm the amount of the RSF. So just so we are clear, are you confirming that there are discussions around an RSF? Thanks.
KOZACK: Yes, there’s discussions on an RSF and the intention is to present the RSF with its package of reforms to our Executive Board at the same time as we present the Fourth Review of the EFF.
QUESTIONER: Question about Rwanda and Eastern Congo. I wanted to know, I know that the IMF has programs with both Rwanda and the DRC. And I wanted to know, you know, given the M23 incursion, the fall of Goma, how the programs can react to it, if there is anything you can say about that. And also, obviously, in El Salvador, they changed their cryptocurrency law, but it is also reported that they recently bought 50 bitcoins. So, some people are for the kind of national treasury. Some people are confused in terms of what the contours of the limitations put on. And I wonder if you could comment on that. Thanks a lot.
KOZACK: Okay, thank you. Any other questions on these countries? DRC, Rwanda, El Salvador?
Okay, let me start with DRC and I want to start by saying that, you know, we are deeply saddened by the loss of lives and the humanitarian crisis in the Eastern part of DRC. We are closely monitoring the situation, including its potential impact on neighboring countries and the region. And of course, we are also closely monitoring with respect to potential impact on our program.
With respect to Rwanda, what I can say on Rwanda is simply that the country continues to demonstrate a robust commitment to advancing policy reforms. And In December of 2024, our Executive Board concluded the Fourth Review of Rwanda’s programs.
With respect to El Salvador, just to step back and remind, IMF staff and the Salvadorian authorities reached a staff-level agreement on December 18th for a new arrangement, a new EFF arrangement. The arrangement would be for about $1.4 billion to support the government’s reform agenda, and this agreement is subject to approval by the IMF’s Executive Board.
I can also add that as explained in the press release that we issued following the staff-level agreement, the new Fund supported program aims to reduce the potential risks of the bitcoin project. Once in place, purchases of bitcoin will be confined under the program as agreed.
QUESTIONER: Thank you, Julie. Good morning, everyone. A few things. In Zimbabwe, when you expect a deal for the Staff Monitored Program? And on Lebanon, have you had any contact with the new government? Are there any signs that you are going to be able to work with them? Also on Senegal, can you give us any update on the resolution of the suspension of the financing program there? And lastly, are there any concerns of a drop in the commitment of funding from the U.S.? The 2025 project calls for the U.S. to stop putting money into the World Bank and the IMF. So, are you guys concerned about that?
KOZACK: Okay, thanks. Starting with Zimbabwe, I do not have an update for you for today on Zimbabwe, but we will come back to you bilaterally.
On Lebanon, what I can share is that, you know, we welcome the election of General Aoun as president of Lebanon, and we look forward to working with him and his new government to address the challenges facing the Lebanese economy. And just to remind, Lebanon continues to face profound economic challenges, and the conflict had exacerbated an already fragile macroeconomic and social situation. The election of the president, the formation of a new government, as well as the ceasefire, are critical to support policy actions and reforms that would allow the gradual return to the normalization of economic activity in Lebanon.
And what I can share on Senegal is that we are actively engaged in discussions with the authorities on addressing the misreporting case. Senegal’s Court of Auditors is expected to issue its final report this month. In parallel, IMF staff are working closely with the authorities to identify their capacity development needs and to implement corrective measures needed to address the root causes of the misreporting. These efforts are aimed at enhancing transparency, strengthening accountability, and preventing a recurrence of similar misreporting in the future.
And I think, on your final question, all I can say here is that the United States is the IMF’s largest shareholder, and it plays an extremely valuable role in helping ensure global financial stability. We have a long history of working with successive U.S. administrations, and we look forward to continuing to do so.
QUESTIONER: Thanks, Julie. Thank you for taking my question. When do you think we can expect the Executive Board’s approval on the next tranche for the Island Nation? And if there is any delay, what sort of reason is there? Is there more for the government to do? And secondly, the budget for the country is expected in a few weeks. Has the IMF given any input on preparing this budget, given the fact that the country is still in the EFF program?
KOZACK: Thanks. So, your question was on Sri Lanka? And yes, I see you nodding. So, if anyone else has questions on Sri Lanka, I can take them now. Okay. If not, let me go ahead with Sri Lanka.
So, on Sri Lanka on November 23rd, IMF staff and the Sri Lankan authorities reached a staff-level agreement on the Third Review of Sri Lanka’s EFF program. Once approved by the IMF’s Executive Board, Sri Lanka will have access to about $333 million in financing. And we expect the Board meeting to take place in the coming weeks.
Here, I would also just like to take the opportunity to emphasize that Sri Lanka’s ambitious reform agenda is delivering commendable outcomes. The economy expanded by 5.5 percent in the fourth — third quarter of 2024. Average headline and core inflation remain contained well below the target during the fourth quarter of 2024. And international reserves increased to $6.1 billion at the end of 2024.
With respect to the specific question on the budget, what I can share is that the staff-level agreement that I mentioned, which was reached in November, will be presented to the Executive Board or is subject to Executive Board approval, but it’s also contingent upon, among other things, implementation by the authorities of prior actions, including submission of the 2025 budget that is consistent with parameters identified under the program.
QUESTIONER: Most of the questions we had have been touched upon, and I would just reinforce as well what colleagues had said earlier about trying to get a sense of what all this uncertainty around tariffs will mean. I know there is a tendency to talk about the policies once they are implemented and the impact. But given the fact that policies get announced and withdrawn and swung around, it seems like the uncertainty has more of the impact than the actual policy. But all that seems to be covered. I will get to — actually, the only outstanding question we have now is if you could update us on the status of the Mozambique program and if there is a risk to that program’s existence right now, given what is going on. That is for our Africa colleagues. Everything else was covered. Thank you so much. I appreciate it.
- KOZACK: Thank you very much. So, on Mozambique, what I can share is that the Article IV Consultation and the Fourth Review of the Extended Credit Facility, or ECF, were completed back in July of 2024. An IMF team will visit Maputo in the coming weeks to engage with the new government. We do remain engaged to support the country’s efforts toward remaining macroeconomic stability, accelerating growth and making growth more inclusive, in line with the arrangements. But given that there is a mission in the coming weeks, we will have more to report toward the end of that engagement.
QUESTIONER: Julie, regarding Russia, are there any developments concerning the postponed mission to Russia to evaluate progress in economy that was stopped in September due to necessity to gather additional information and make additional analysis. Anything we should expect this year, probably? Thank you.
KOZACK: Unfortunately, I don’t yet have an update for you or a timeline for the Article IV.
QUESTIONER: One final question. Thank you. Sorry, Julie, I’m going to try again with a sort of a similar question. But, you know, we are seeing a fundamental shift in the global and potentially in the support that is available for developing countries. The United States has ended foreign assistance. It has frozen funding for the World Food Program. It is pulling out of and talking about pulling out of the World Health Organization. These are institutions that are part, writ large, of the Bretton Woods system in which the IMF is such a key player.
So, I do not think it’s unfair of us to be asking for some guidance from you about how you at an institution like the IMF are approaching this period of time that is marked by uncertainty, not just for the markets or for global trade, but also for the institutions themselves. And, you know, we have seen some initial reports that Elon Musk’s DOGE employees or people who work with DOGE are starting to look at the World Bank and other institutions.
And I, you know, so I guess we want to hear something from you that is a little bit broader about the time that we’re in and what it means, because it obviously has implications for other countries, too, if they’re going to fill the gap in the developing thing. And, you know, you have been warning for years that the developing economies face a kind of perfect storm of different difficult circumstances. This seems like it adds to, to it. Thanks.
KOZACK: Thanks very much. Look, what I can say now is really what I’ve been saying. I really do not have much to add other than that we are a global institution. We have a clearly defined mandate to support economic and financial stability globally and just ultimately support growth and employment in the world economy. We are continuing as an institution to remain laser-focused, of course, on that mandate. And we, as a global institution, take our responsibility to serve our membership very, very seriously. And we will continue to do everything that we need to do to serve our membership in the best possible way. You know, we do, as I said, have a long history of working with successive U.S. administrations, and we look forward to continuing to do so as an institution for which the U.S. is our largest shareholder.
And with this, I’m going to bring this press briefing to an end. Thank you all for your participation today. As a reminder, this briefing is embargoed until 11:00 a.m. Eastern Time today. A transcript will be made available later on IMF.org, and as usual, in case of clarifications, additional queries, or anything else, please reach out to my colleagues at media@mf.org.
This does conclude our first press briefing of the year. I wish everyone a wonderful day and I do look forward to seeing you next time. Thank you all so much for joining, and please be safe given the weather outside here in D.C. Thank you, everyone.
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