Commitment by Mogadishu’s largest single lender is latest in series of deals to forgive ‘unsustainable’ $4.5bn debt
Somalia has announced that more than $1.1bn (£860m) of outstanding loans will be cancelled by the US, a sum representing about a quarter of the country’s remaining debt.
The announcement is the latest in a series of agreements in which Somalia’s creditors have committed to forgiving its debt obligations.
Continue reading...After weeks of speculation, chancellor will tell IMF in Washington that UK’s debt measure will be redefined to permit borrowing for investment
Rachel Reeves will announce at the International Monetary Fund a plan to change Britain’s debt rules that will open the door for the government to spend up to £50bn extra on infrastructure projects.
After weeks of speculation, the chancellor will confirm at the fund’s annual meetings in Washington on Thursday that next week’s budget will include a new method for assessing the UK’s debt position – a move that will permit the Treasury to borrow more for long-term capital investment.
Continue reading...New report upgrades outlook for UK economy with growth now forecast at 1.1% rather than 0.7%
The International Monetary Fund has warned the trade tariffs favoured by US presidential candidate Donald Trump could hurt global growth, as it upgraded its forecast for the UK economy.
The Washington-based organisation said tariffs trigger tit-for-tat trade wars that impoverish the economies involved in the dispute and the wider global economy.
Continue reading...Trip to Moscow to review economy delayed indefinitely after protests it would ‘normalise relations with aggressor’
The International Monetary Fund (IMF) has indefinitely postponed a staff mission to Moscow this week to review the Russian economy for the first time since the invasion of Ukraine, after the move came under heavy criticism from several of Kyiv’s European allies.
After revelations in the Guardian of widespread condemnation, the IMF said it would spend more time gathering information for a “rigorous analysis”.
Continue reading...Protest letter sent to fund’s head over move to send staff to Moscow for first review since invasion of Ukraine
The International Monetary Fund (IMF) will send staff to Moscow next week to review the Russian economy for the first time since the invasion of Ukraine, in a move that has prompted anger and dismay across European capitals.
Officials of the Washington-based organisation will travel to the Russian capital and meet “stakeholders” before publishing an assessment of the economy and providing recommendations about how the Kremlin might improve its economic handling and tackle issues such as the climate crisis.
Continue reading...Charities and campaign groups are calling on bodies to say they may stop funding country if legislation comes into effect
The World Bank and the International Monetary Fund are coming under pressure to use their financial might to persuade Ghana to reconsider a proposed law that could lead to anyone who identifies as LGBTQ+ being jailed for three years.
Charities and campaign groups are calling on the global development bodies to tell Ghana they may stop funding the country if the proposed legislation – which will be challenged in the country’s supreme court next week – comes into effect.
Continue reading...IMF has revised up growth forecasts but medium-term prospects remain poor as globalisation goes into reverse
The 2020s are almost halfway over and are on course to be the most difficult decade for the global economy since the 1930s. Every finance minister and central bank governor at the spring meeting of the International Monetary Fund in Washington last week knows that, even if they were not prepared to admit it publicly.
The IMF likes to look on the bright side. It revised up slightly its forecast for global growth and now thinks scarring from the coronavirus pandemic and the cost of living crisis will be less severe than it originally feared. Interest rates have risen without triggering the recessions that were predicted. A soft landing has been finessed. The performance of some countries – the US and India to take two examples – has been strong.
Continue reading...Treasurer and finance minister hail ‘remarkable achievement’ as monitor finds balance to be behind only Canada among G20 countries
Australia’s overall budget balance is the second strongest among G20 nations, behind only Canada, according to the International Monetary Fund’s latest fiscal monitor.
The IMF’s half-yearly update, released on Wednesday night, found Australia’s overall budget balance came in at -0.9% of gross domestic product in 2023, with only Canada’s budget position (-0.6%) faring better.
Continue reading...In the UK, anxiety over the crisis after Iran’s missile strike on Israel drives down UK shares
An escalating Middle East conflict risks leading to higher oil prices, a reversal of the recent fall in inflation and a puncturing of the optimistic mood in financial markets, the International Monetary Fund has warned.
The Washington-based IMF said it was closely monitoring events in the region after Iran’s missile strike on Israel at the weekend and stressed the possibility that a war between the two countries could lead to higher interest rates.
Continue reading...The PM’s admiration for Washington’s economic model may backfire amid looming US banking and stock market disasters
One of the consistent themes of the Conservative economic narrative is an admiration for the US and its ability to grow quickly. The way it has bounced back from the pandemic and how it has ridden out the impact of Russia’s invasion of Ukraine should serve as a blueprint.
A neoliberal Conservative analysis puts the emphasis on tech, innovation and a myth-like entrepreneurial spirit that the UK would do well to emulate. What it ignores is the way the US economy zips ahead on fantastical stock market valuations and off-balance-sheet accounting reminiscent of the years before the 2008 financial crisis. And how both these habits could bite back in a big way, much as they did in 2008, and pretty soon.
Continue reading...Bulgaria’s ‘eternal optimist’ in favour with European finance ministers after first five-year stint encompassing Covid and Ukraine
The head of the International Monetary Fund, Kristalina Georgieva, will run for a second five-year term after being nominated by a string of European countries to lead the global lender.
The Bulgarian economist and champion of policies to tackle the climate crisis will be given the support of her home country, which said she had accepted the nomination for another term starting in September.
Continue reading...The chancellor said he wanted to manage people’s expectations ahead of the spring budget
The UK needs a government guided by clear purpose, Reeves says.
Labour has set out five missions. But they are all tied to the economic mission – to raise growth.
These are the symptoms of economic decline.
Continue reading...‘Crucial’ that countries build social safety nets to mitigate impact on workers, says Kristalina Georgieva
Artificial intelligence will affect 40% of jobs around the world and it is “crucial” that countries build social safety nets to mitigate the impact on vulnerable workers, according to the head of the International Monetary Fund.
AI, the term for computer systems that can perform tasks usually associated with human levels of intelligence, is poised to profoundly change the global economy with advanced economies at greater risk of disruption.
Continue reading...Package of spending cuts introduced in attempt to tackle country’s worst economic crisis in decades
Argentina has devalued its currency, the peso, by more than 50% as part of a package of large-scale spending cuts intended to address the country’s worst economic crisis in decades.
The plans, introduced under the newly inaugurated administration of Javier Milei, include cutting energy subsidies and cancelling tenders for public works.
Continue reading...At the fund’s annual meeting this week in Morocco, ambitions for climate and debt relief may be overwhelmed by events – again
Last week’s turmoil in the global bond markets will be playing on the minds of finance ministers and central bank governors when they gather in Marrakech this week for the annual meetings of the International Monetary Fund and the World Bank.
After the triple shocks of the Covid pandemic, the war in Ukraine and the surge in inflation, the mood may be less febrile than it was a year ago, but few if any of those travelling to Morocco – which suffered a devastating earthquake last month – would dare say that the crisis era is over. Most will be wondering what might go wrong next.
Continue reading...US Fed will also have to raise rates more aggressively than forecast, says Washington-based body
Interest rates in the UK will need to stay higher for longer than previously forecast in order to tackle stubbornly high inflation, the International Monetary Fund has warned.
The IMF’s regular update on the state of the global economy singled out the US Federal Reserve and the Bank of England as two central banks that will need to raise official borrowing costs more aggressively than it assumed only three months ago.
Continue reading...Changes to the World Bank could unlock developing states access to loans and to the means of staving off disaster
The Netherlands has almost the same amount of solar generating capacity as the whole continent of Africa. That must be, in part, because the interest on a loan to set up a windfarm in Africa is about 17% more than one to do the same in Europe.
Many poor countries enjoy vast natural resources of wind and sun yet struggle to access renewable energy because of the crippling cost of capital imposed on them. Private sector companies perceive far greater risk in poor countries, penalising most heavily the countries in greatest need of investment.
Continue reading...Package similar to 2005 deal needed as struggling African countries suffer severe funding squeeze, says official
Western countries need to put together a debt relief and aid package to match that of the landmark Gleneagles summit deal in 2005 in order to counter a severe funding squeeze affecting struggling African countries, the International Monetary Fund has said.
Abebe Selassie, the director of the IMF’s African department, said without a scaling up of financial support some of the world’s poorest countries would have no chance of meeting the 2030 UN goals for poverty reduction.
Continue reading...Risk of unrest rises amid fourth dry year, poor grain harvest, weak economy and likely food subsidy cuts
Tunisia has introduced water rationing as the country suffers its fourth year of severe drought.
The state water distribution company, Sonede, has already begun cutting mains water supplies every night between 9pm and 4am. The agriculture ministry has now banned the use of water for irrigation, watering green spaces and other public areas, and for washing cars.
Continue reading...Loan is on top of £25bn that cash-strapped Islamabad already owes Beijing and Chinese commercial banks
China has agreed to loan Pakistan $700m (£580m) to help it weather its worst economic crisis in a generation, in a development that will intensify concern among western countries about cash-strapped Islamabad’s debt burden to Beijing.
The loan comes on top of $30bn (£25bn) that Pakistan already owes China and Chinese commercial banks. Securing the financing will help to unlock bailout cash from the International Monetary Fund (IMF).
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