Category Archives: International Monetary Fund (IMF)

Will coronavirus trigger a global recession? | Jeffrey Frankel

Posted on by

World economy’s prospects look bleak owing to Covid-19 outbreak and Donald Trump’s trade policy

At the start of this year, things seemed to be looking up for the global economy. True, growth had slowed a bit in 2019: from 2.9% to 2.3% in the US and from 3.6% to 2.9% globally. Still, there had been no recession and as recently as January, the International Monetary Fund projected a global growth rebound in 2020. The new coronavirus, Covid-19, has changed all of that.

Early predictions about Covid-19’s economic impact were reassuring. Similar epidemics – such as the 2003 outbreak of severe acute respiratory syndrome (Sars), another China-born coronavirus – did little damage globally. At the country level, GDP growth took a hit but quickly bounced back, as consumers released pent-up demand and firms rushed to fill back orders and restock inventories.

Continue reading...

IMF boss says global economy risks return of Great Depression

Posted on by

Kristalina Georgieva compares today with “roaring 1920s” and criticises UK wealth gap

The head of the International Monetary Fund has warned that the global economy risks a return of the Great Depression, driven by inequality and financial sector instability.

Speaking at the Peterson Institute of International Economics in Washington, Kristalina Georgieva said new IMF research, which compares the current economy to the “roaring 1920s” that culminated in the great market crash of 1929, revealed that a similar trend was already under way.

Continue reading...

Ballooning debt forces poor countries to cut public spending

Posted on by

Congo-Brazzaville and Chad among hardest hit as campaigners warn spiralling repayments could trigger disaster

Poorer countries are cutting public spending in response to a “growing debt crisis”, campaigners have warned.

Debt in some countries has trebled according to new figures that calculate debt reimbursements, and their impact on government expenditure, in 60 countries.

Continue reading...

China steps in as Zambia runs out of loan options

Posted on by

Southern Africa’s third largest economy is a textbook example of the increasing debt facing a fast-growing continent

Zambia’s capital, Lusaka, was having a power cut, so the only light in the restaurant was from Fumba Chama’s mobile phone. The rapper, better known as PilAto, had just finished uploading a new track to Twitter. The bitter-sweet lyrics (in Bemba) of Yama Chinese describe the concerns of many Zambians: “They put on smart suits and fly to China to sell our country. The roads belong to China. The hotels are for the Chinese. The chicken farms are Chinese. Even the brickworks are Chinese.”

Continue reading...

World economy is sleepwalking into a new financial crisis, warns Mervyn King

Posted on by

Past crashes spawned new thinking and reform but nothing has changed since 2008 banking meltdown, says former Bank of England boss

The world is sleepwalking towards a fresh economic and financial crisis that will have devastating consequences for the democratic market system, according to the former Bank of England governor Mervyn King.

Lord King, who was in charge at Threadneedle Street during the near-death of the global banking system and deep economic slump a decade ago, said the resistance to new thinking meant a repeat of the chaos of the 2008-09 period was looming.

Continue reading...

IMF accused of ‘reckless lending’ to debt-troubled states

Posted on by

Jubilee Debt Campaign says the Fund broke its own rules by not ensuring sustainable debt burden

Debt campaigners have accused the International Monetary Fund of encouraging reckless lending by extending $93bn (£75bn) of loans to 18 financially troubled countries without a debt restructuring programme first.

In advance of the IMF’s annual meeting in Washington next week, the Jubilee Debt Campaign (JDC) said the the Fund was breaking its own rules by providing financial support without ensuring that the debt burden was sustainable.

Continue reading...

The IMF is hurting countries it claims to help | Mark Weisbrot

Posted on by

The fund browbeats poor countries into accepting neoliberal measures that exacerbate inequality and economic distress

When people think of the damage that wealthy countries – typically led by the US and its allies – cause to people in the rest of the world, they probably think of warfare. Hundreds of thousands of Iraqis died from the 2003 invasion, and then many more as the region became inflamed.

Related: Brexit: EU ‘would block trade deal if Britain reneged on bill’

Continue reading...

Donald Trump’s trade war hurting China more than US, says IMF

Posted on by

Brexit uncertainty and impact of Iran sanctions also likely to slow world growth, says Fund

Donald Trump’s claim that his protectionist measures are hurting China more than the US has received support from the International Monetary Fund in new forecasts showing how a fresh slowdown in the global economy has been concentrated in emerging economies.

The Washington-based IMF said the outlook was gloomier than it envisaged three months ago due to the tit-for-tat tariff war between the world’s two biggest economies, Brexit uncertainty and the impact of sanctions against Iran on oil prices.

Continue reading...

George Osborne’s ambitions over IMF top job prompt criticism

Posted on by

Former UK chancellor’s austerity agenda will count against him, say opponents

George Osborne’s interest in running the International Monetary Fund has met immediate criticism because of the former chancellor’s austerity policies and Brexit-related question marks over the UK’s international standing.

Osborne, the editor of the Evening Standard, has signalled to friends that he views himself as a potential candidate to replace Christine Lagarde, the current head of the Washington-based fund, who was nominated to lead the European Central Bank this week.

Continue reading...

Christine Lagarde faces ECB test of legendary diplomatic skills

Posted on by

European Central Bank provides an arena split between anti-austerians and expansionists

Christine Lagarde will take up the position of head of the European Central Bank as a self-confessed economic outsider who has preferred to emphasise her ability as a listener and tough negotiator during her seven years as managing director of the International Monetary Fund.

A lawyer by training, the former French finance minister is credited with turning around the Washington-based IMF after it was thrown into turmoil by the abrupt resignation of her predecessor Dominique Strauss-Kahn following unproven allegations of sexual assault and attempted rape.

Continue reading...

US-China trade war to cost $455bn in lost output, says IMF

Posted on by

Christine Lagarde says world must avoid the ‘self-inflicted wounds’ of a tit-for-tat wrangle

The International Monetary Fund has called for a speedy end to the deepening trade war between the United States and China after calculating that the tit-for-tat tariffs will cost $455bn (£357.5bn) in lost output next year – more than the size of South Africa’s economy.

Christine Lagarde, the IMF’s managing director, underlined her organisation’s growing concern at the most serious outbreak of trade tension since the 1930s and said “self-inflicted wounds” had to be avoided.

Continue reading...

IMF warns that tech giants stifle innovation and threaten stability

Posted on by

Fund report calls for profits to be targeted by a tougher international tax regime

The International Monetary Fund has warned that the market power exercised by a small number of global companies threatens to stifle innovation and make it harder for central banks to deal with recessions.

Adding its contribution to the growing public debate about the corporate power exercised by the US tech giants such as Google, Amazon, Apple and Facebook, the IMF said it would be concerned if there was any further increase in the clout of already dominant firms.

Continue reading...