Category Archives: International Monetary Fund (IMF)

Half of poorest countries have cut health spending despite Covid, says Oxfam

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Analysis of budgets finds rich nations, including UK, ‘exacerbated explosion of economic inequality’

Many of the world’s poorest countries have cut health spending during the last two years, sometimes to make debt repayments to rich creditors, according to a report by Oxfam that shows inequality between rich and poor nations worsening during the coronavirus pandemic.

Analysis of national budgets across 161 nations found that despite the biggest global health emergency in a century, half of low- and lower-middle-income countries cut health spending, while almost half cut their welfare budgets and almost three-quarters cut education spending.

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Cutting oil output risks global economy, warns US Treasury secretary

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Janet Yellen’s comments come as figures show business activity declining across most UK regions

The world’s biggest oil-producing nations cutting production at a time of soaring energy costs is “unhelpful and unwise” for global economic growth, the US Treasury secretary has warned, amid intense pressure from sky-high inflation.

Ahead of meetings hosted by the International Monetary Fund in Washington this week, Janet Yellen said the move by Opec+ – the oil production cartel led by Saudi Arabia, plus Russia – risked undermining the world economy.

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Truss ‘standing by Kwarteng’ as Treasury defends plans despite market turmoil – as it happened

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No 10 says PM has faith in chancellor, as Treasury minister says tax cuts are the ‘right plan’. This blog is now closed

Q: When would you get debt falling as a proprotion of GDP?

Starmer says Labour does want to get that down.

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Lenders urged to cancel Zambia debt as country faces economic collapse

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Economists accuse bondholders of standing to make huge profits at the expense of the crisis-hit country

More than 100 economists and academics have urged international lenders to crisis-stricken Zambia to write off a significant slice of their loans during financial restructuring talks this month.

Zambia is seeking up to $8.4bn (£7.3bn) in debt relief from major lenders, including private funds run by the world’s largest investment manager, BlackRock, to help put its public finances back in order.

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Crisis-hit Zambia secures $1.3bn IMF loan to rebuild stricken economy

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Years of mismanagement have led to soaring debt levels, but critics say that without meaningful relief, austerity will continue

The International Monetary Fund has approved a $1.3bn (£1.1bn) loan to Zambia, as the country scrambles to rebuild its crisis-hit economy after defaulting on its foreign debts in 2020.

The Covid pandemic compounded Zambia’s economic woes, blamed on years of mismanagement and corruption, which left the country with unsustainable levels of debt.

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IMF offers Sri Lanka provisional $2.9bn loan to tackle debt crisis

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Funding still needs to be approved but could offer breathing space amid country’s economic turmoil

The International Monetary Fund has tentatively offered Sri Lanka a $2.9bn (£2.5bn) loan to help the country recover from the worst economic crisis since it gained independence from Britain in 1948.

The funding is meant to provide some breathing space for Sri Lanka, which is scrambling to restructure nearly $30bn in debt to creditors including China, India and a string of international banks.

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Bangladesh to hold talks with IMF after applying for bailout

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Dhaka is understood to be seeking $4.5bn rescue package after being hit by high import costs and falling exports

Bangladesh is to hold talks with the International Monetary Fund after applying for a bailout to prevent the country running out of cash.

The government in Dhaka – the third in south Asia to seek a financial rescue package from the IMF after Pakistan and Sri Lanka – is understood to want $4.5bn (£3.7bn) after it was hit hard by high import prices, especially for gas, and a fall in exports as the global economy slowed down.

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IMF slashes global growth forecast as top three economies ‘stall’

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Problems in the US, China and eurozone will result in first contraction since start of pandemic, report says

The International Monetary Fund has slashed its growth forecasts for the next 18 months after warning that the world’s three biggest economies are all stalling and inflation is higher than previously forecast.

In a downbeat update to its April world economic outlook (WEO), the IMF said problems in the US, China and the eurozone had resulted in global output falling in the second quarter of this year – the first contraction since the start of the Covid-19 pandemic.

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Neglect Africa now and we will face labour shortages globally, IMF warns

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West’s response to effects of Covid and Ukraine war condemned as shortsighted ‘collective failure’ to invest in future human capital

The international community would be “playing with fire” if it failed to help Africa recover from Covid and the impact of the Ukraine war, the International Monetary Fund’s director for the continent has said.

Failure to invest and support the continent was shortsighted and detrimental to the global economy, as half of the new entrants into the global workforce over the next decade would come from sub-Saharan Africa, Abebe Aemro Selassie, director of the IMF’s Africa department, told the Guardian.

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Sri Lanka is the first domino to fall in the face of a global debt crisis

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The south Asian country is the first to buckle under economic pressures compounded by Russia’s war on Ukraine, but it won’t be the last

The departure of Sri Lanka’s prime minister, Mahinda Rajapaksa, follows weeks of protest and a deepening crisis. There is no bankruptcy system for states but if there was then the south Asian country – down to its last $50m (£40m) of reserves – would be first in line to use it.

A team from the International Monetary Fund (IMF) this week started work with officials in Colombo over a bailout that will include a tough package of reforms as well as financial support. But as the IMF and its sister organisation, the World Bank, know full well, this is about more than the mismanagement of an individual country. They fear Sri Lanka is the canary in the coalmine.

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BlackRock urged to delay debt repayments from crisis-torn Zambia

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Anti-poverty campaigners say world’s largest fund manager refuses to reduce or delay payments on Zambia’s debt

BlackRock, the world’s largest fund manager, has come under pressure to delay demands for debt interest payments from Zambia to prevent the crisis-hit African country’s finances from spiralling out of control.

Anti-poverty campaigners said BlackRock, which manages $10tn (£7.68tn) of assets, was among the private sector lenders that had refused to reduce the interest rate or delay payments on Zambian bonds, unlike governments and international agencies that hold the country’s debts.

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We can afford to reverse poverty and climate breakdown. What we can’t afford is the alternative | Kevin Watkins

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Our global finance system is failing to rise to the challenges we face. It’s time it was reimagined – and grounded in our shared humanity

“The peoples of the Earth,” Henry Morgenthau said, “are inseparably linked by a deep underlying community of purpose.”

In July 1944, Morgenthau, the US Treasury secretary, was closing the Bretton Woods conference with a reflection on extreme nationalism and the failures of cooperation that had led to war. Cautioning against the pursuit of national interest through “the plan-less, senseless rivalry that divided us”, he outlined an accord for new institutions grounded in an appeal to shared humanity.

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IMF warns China over cost of Covid lockdowns

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Hardline approach to pandemic risks damaging global economy, says Kristalina Georgieva

China, the world’s second largest economy, should review its zero-tolerance approach to the pandemic or risk damaging the global recovery, according to the head of International Monetary Fund.

Kristalina Georgieva said Beijing should reassess the use of lockdowns to limit the spread of the highly contagious Omicron variant since it became clear the harm to human health was less severe than the Delta variant.

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Barbados can be a beacon for the region – if it avoids some of its neighbours’ mistakes | Kenneth Mohammed

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The Caribbean’s newest republic must avoid the corruption that has hampered Trinidad and Tobago and use its presidency to ensure good governance

The charismatic prime minister of Barbados, Mia Mottley, elevated her country’s status in the world with her stinging speech at Cop26 in Glasgow last month. This speech resonated throughout the West Indies, a region that has largely been devoid of a strong leader to give these vulnerable small island developing states (SIDS) a voice in the climate crisis debate. The survival of SIDS such as Barbados depends on the finance to invest in measures to limit the global temperature rise to 1.5C, which was the Paris agreement’s main objective.

Mottley called on all leaders of developed countries to step up their efforts as she outlined a solution embodied in flexible development finance. First, create a loss and damage fund made up of 1% of revenues from fossil fuels (which she estimated would amount to about $70bn, or £50bn, a year), accessible only to countries that have suffered a climate disaster and loss of 5% of their economy.

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WHO says no deaths reported from Omicron yet as Covid variant spreads

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US and Australia become latest countries to confirm locally transmitted cases

The Omicron variant has been detected in at least 38 countries but no deaths have yet been reported, the World Health Organization has said, amid warnings that it could damage the global economic recovery.

The United States and Australia became the latest countries to confirm locally transmitted cases of the variant, as Omicron infections pushed South Africa’s total cases past 3 million.

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Credit Suisse fined £350m over Mozambique ‘tuna bonds’ loan scandal

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Bank also pleads guilty to wire fraud and forgives hundred of millions of dollars of debt owed by country

Credit Suisse has been fined nearly £350m by global regulators, pleaded guilty to wire fraud, and agreed to forgive hundreds of millions of dollars worth of debt owed by Mozambique in an attempt to draw a line under the long-running “tuna bonds” loan scandal.

The Swiss banking company had been accused of “serious” failings in its financial crime controls by the UK’s Financial Conduct Authority (FCA), and has entered into a deferred prosecution agreement with the US Department of Justice that will put the bank under heavy monitoring for three years after having “defrauded US and international investors”.

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Covid pandemic has pushed poor countries to record debt levels – World Bank

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‘Tragic reversal’ has set back progress, president says, as he calls for a comprehensive plan

The Covid-19 pandemic has led to a “tragic reversal” in development and pushed debt in poor countries to record levels, the head of the World Bank has said.

David Malpass, the bank’s president, warned the virus had widened the gap between rich and poor nations, setting back progress by years and, in the case of some countries, by a decade.

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Rishi Sunak to save billions by counting IMF cash as aid for poor

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Exclusive: chancellor criticised by former Tory international development secretaries for planned use of $27.4bn windfall

Rishi Sunak is to save billions of pounds by counting as aid financial assistance to poor countries being provided as a result of a windfall Britain has received from the International Monetary Fund (IMF).

In a move that has been condemned by former Conservative international development secretaries, the chancellor has chosen not to use the UK’s share of a new $650bn IMF global fighting fund to increase the share of national output spent on aid.

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IMF to issue downbeat outlook as spectre of stagflation looms

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Fund set for a gloomy annual meeting as supply chain issues and inflationary pressures hobble global recovery

Weaker global growth, vaccine protectionism and the spectre of 1970s-style inflation haunting large economies. As the International Monetary Fund prepares for its annual gathering this week, the contrast with the spring could not be more stark.

Back in April, at the Washington-based fund’s last virtual bash, there were sharp upgrades for global growth amid a sense of optimism for the road ahead, led by stronger-than-expected recoveries in the US, UK and other advanced economies. Vaccines would pave the way for the swift unlocking of pandemic restrictions, fuelling a rapid recovery from the worst global recession since the 1930s Great Depression.

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