Tag Archives: IMF

BRICS representing 40% of the Worlds GDP set to expand: Developing countries are calling for a fairer World Order

BRICS-adding-countries

Important Takeaways:

  • Iran and Saudi Arabia are among 6 nations set to join China and Russia in the BRICS economic bloc
  • Iran and Saudi Arabia were among six countries invited Thursday to join the BRICS bloc of developing economies in a move that showed signs of strengthening a China-Russia coalition as tensions with the West spiral higher.
  • The United Arab Emirates, Argentina, Egypt and Ethiopia were also set to enter BRICS from Jan. 1, 2024, joining current members Brazil, Russia, India, China and South Africa to make an 11-nation bloc.
  • However, in a twist, Saudi Arabia’s membership appeared uncertain after Prince Faisal told the Saudi-owned broadcaster Al Arabiya later Thursday that the kingdom appreciated the invitation but would first study the details before the proposed Jan. 1 joining date and take “the appropriate decision.”
  • BRICS currently represents around 40% of the world’s population and more than a quarter of the world’s GDP, with that set to increase. The potential new members include three of the world’s biggest oil producers: Saudi Arabia, the UAE and Iran.
  • “This membership expansion is historic,” Chinese leader Xi said. “It shows the determination of BRICS countries for unity and development.”
  • BRICS has a stated aim to amplify the voice of the Global South. All five current members and dozens of other developing countries represented at the summit repeatedly called this week for a fairer world order and the reform of international institutions like the United Nations, the IMF and the World Bank.

Read the original article by clicking here.

IMF announces launch of an International Central Bank Digital Currency

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • The Digital Currency Monetary Authority (DCMA) Launches an International Central Bank Digital Currency (CBDC)
  • Today, at the International Monetary Fund (IMF) Spring Meetings 2023, the Digital Currency Monetary Authority (DCMA) announced their official launch of an international central bank digital currency (CBDC) that strengthens the monetary sovereignty of participating central banks and complies with the recent crypto assets policy recommendations proposed by the IMF.
  • Universal Monetary Unit (UMU), symbolized as ANSI Character, Ü, is legally a money commodity, can transact in any legal tender settlement currency, and functions like a CBDC to enforce banking regulations and to protect the financial integrity of the international banking system.
  • The DCMA is a world leader in the advocacy of digital currency and monetary policy innovations for governments and central banks. Membership within the DCMA consists of sovereign states, central banks, commercial and retail banks, and other financial institutions.

Read the original article by clicking here.

G20 to show united front on support for global economic recovery, cash for IMF

By Michael Nienaber and Andrea Shalal

BERLIN/WASHINGTON/ROME (Reuters) – The world’s financial leaders are expected on Friday to agree to continue supportive measures for the global economy and look to boost the International Monetary Fund’s resources so it can help poorer countries fight off the effects of the pandemic.

Finance ministers and central bank governors of the world’s top 20 economies, called the G20, held a video-conference on Friday. The global response to the economic havoc wreaked by the coronavirus was at top of the agenda.

In the first comments by a participating policymaker, the European Union’s economics commissioner Paolo Gentiloni said the meeting had been “good,” with consensus on the need for a common effort on global COVID vaccinations.

“Avoid premature withdrawal of supportive fiscal policy” and “progress towards agreement on digital and minimal taxation” he said in a Tweet, signaling other areas of apparent accord.

A news conference by Italy, which holds the annual G20 presidency, is scheduled for 17.15  (1615 GMT).

The meeting comes as the United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies going despite COVID-19 lockdowns.

But despite the large sums, problems with the global rollout of vaccines and the emergence of new variants of the coronavirus mean the future of the recovery remains uncertain.

German Finance Minister Olaf Scholz warned earlier on Friday that recovery was taking longer than expected and it was too early to roll back support.

“Contrary to what had been hoped for, we cannot speak of a full recovery yet. For us in the G20 talks, the central task remains to lead our countries through the severe crisis,” Scholz told reporters ahead of the virtual meeting.

“We must not scale back the support programs too early and too quickly. That’s what I’m also going to campaign for among my G20 colleagues today,” he said.

BIDEN DEBUT

Hopes for constructive discussions at the meeting are high among G20 countries because it is the first since Joe Biden, who vowed to rebuild cooperation in international bodies, became U.S. president.

While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.

The recovery is fragile elsewhere too – factory activity in China grew at the slowest pace in five months in January, hit by a wave of domestic coronavirus infections, and in Japan fourth quarter growth slowed from the previous quarter with new lockdowns clouding the outlook.

“The initially hoped-for V-shaped recovery is now increasingly looking rather more like a long U-shaped recovery. That is why the stabilization measures in almost all G20 states have to be maintained in order to continue supporting the economy,” a G20 official said.

But while the richest economies can afford to stimulate an economic recovery by borrowing more on the market, poorer ones would benefit from being able to tap credit lines from the IMF — the global lender of last resort.

To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by then U.S. President Donald Trump.

Scholz said the change of administration in Washington on Jan. 20 improved the prospects for more IMF resources. He pointed to a letter sent by U.S. Treasury Secretary Janet Yellen to G20 colleagues on Thursday, which he described as a positive sign also for efforts to reform global tax rules.

Civil society groups, religious leaders and some Democratic lawmakers in the U.S. Congress have called for a much larger allocation of IMF resources, of $3 trillion, but sources familiar with the matter said they viewed such a large move as unlikely for now.

The G20 may also agree to extend a suspension of debt servicing for poorest countries by another six months.

($1 = 0.8254 euros)

(Reporting by Michael Nienaber in Berlin, Jan Strupczewski in Brussels and Gavin Jones in Rome; Andrea Shalal and David Lawder in Washington; Editing by Daniel Wallis, Susan Fenton and Crispian Balmer)

IMF tells G20 countries to “keep spending” on COVID-19 crisis

By Andrea Shalal

WASHINGTON (Reuters) – The International Monetary Fund on Monday warned Group of 20 major economies that the coronavirus crisis is not over and called on the United States, Britain and other countries to increase the amount of fiscal spending currently planned.

Premature withdrawal of fiscal support at a time of continued high rates of unemployment would “impose further harm on livelihoods and heighten the likelihood of widespread bankruptcies, which in turn could jeopardize the recovery,” senior IMF officials warned in a blog published Monday.

The blog, entitled, “The Crisis is Not Over, Keep Spending (Wisely),” said swift and unprecedented action by G20 and emerging market economies had averted an even deeper crisis, with G20 countries alone providing $11 trillion in support.

The IMF last month forecast a 2020 global contraction of 4.4% and a return to growth of 5.2% in 2021, but warned that the situation remained dire and governments should not withdraw stimulus prematurely.

On Monday, it said COVID infections were continuing to spread, but much of the fiscal support provided was now winding down, with cash transfers to households, deferred tax payments and temporary loans to businesses either having expired or being set to do so by year-end.

In economies where deficits dropped by 10% of gross domestic product this year, fiscal balances are expected to narrow by more than 5% of GDP in 2021, largely due to a sharp withdrawal of relief measures, they said.

“Larger support than currently projected is desirable next year in some economies,” the IMF said in a longer report to G20 countries also published Monday. It singled out Brazil, Mexico, Britain and the United States, citing large drops in employment in these economies and projected fiscal contractions.

Democratic lawmakers and Republican President Donald Trump have been unable to reach agreement on a new stimulus package for the United States, the world’s largest economy. New spending may not be agreed until early 2021, depending on the outcome of the presidential election on Tuesday.

The IMF said countries should maintain support for poor and vulnerable groups hit disproportionately hard by the crisis, as well as targeted support for viable firms to maintain employment relationships. It listed India, Mexico, Russia, Saudi Arabia, Turkey and the United States as examples.

However it warned against providing support for firms that hindered a transfer of resources from sectors that may permanently shrink to those sectors that will be expanding.

(Reporting by Andrea Shalal; Editing by Chizu Nomiyama and Nick Macfie)

More synchronized action needed to tackle COVID economic crisis, IMF’s Georgieva says

By Andrea Shalal and Marc Jones

WASHINGTON/LONDON (Reuters) – The international community must do more to tackle the economic fallout of the COVID-19 crisis, the head of the International Monetary Fund said on Monday, publicly calling on the World Bank to accelerate its lending to hard-hit African countries.

Some of the key events of the virtual and elongated annual meetings of the IMF and World Bank take place this week, with the most pressing issue how to support struggling countries.

“We are going to continue to push to do even more,” IMF Managing Director Kristalina Georgieva said during an online FT Africa summit.

“I would beg for also more grants for African countries. The World Bank has grant-giving capacity. Perhaps you can do even more… and bilateral donors can do more in that regard,” Georgieva said in an unusual public display of discord between the two major international financial institutions.

No immediate comment was available from the Bank.

Georgieva last week said the IMF had provided $26 billion in fast-track support to African states since the start of the crisis, but a dearth of private lending meant the region faced a financing gap of $345 billion through 2023.

The pandemic, a collapse in commodity prices and a plague of locusts have hit Africa particularly hard, putting 43 million more people at risk of extreme poverty, according to World Bank estimates. African states have reported more than 1 million coronavirus cases and some 23,000 deaths.

G20 governments are expected to extend for six months their Debt Service Suspension Initiative (DSSI) which has so far frozen around $5 billion of poorer countries’ debt payments, but pressure is on the main development banks and private creditors to provide relief too.

HOLDING ONTO GOLD RESERVES

Georgieva said the Fund was also pushing richer member countries to loan more of their existing Special Drawing Rights (SDR), the IMF’s currency, to countries that needed support most, and was “very committed” to finding a way forward for countries like Zambia now needing to restructure their debts.

The United States has blocked Georgieva’s early call for issuance of more SDRs, arguing that it would benefit mostly richer nations, not the developing countries that need it most.

Pledges to the Fund’s Poverty Reduction and Growth Trust, which supports low-income countries, have totaled $21 billion to date, including $14 billion in existing SDR holdings, but more resources were urgently needed, an IMF spokeswoman said.

The IMF chief dodged calls by civil society groups for the IMF to sell off some of its extensive gold reserves, saying the Fund viewed them as an important “financial buffer.”

Profit from selling less than 7% of the IMF’s gold could fund cancellation of all debt payments by the poorest countries to the IMF and World Bank for the next 15 months, the UK-based Jubilee Debt Campaign said in a new report issued Monday.

The IMF said its gold reserve of about 90.5 million ounces (2,814.1 metric tons) was worth about $137.8 billion at the end of December, compared to its historical cost of $4.4 billion.

Georgieva said countries in serious trouble must restructure their debts as soon as possible.

“This is the message for all countries in debt distress… If debt is not sustainable, please move towards restructuring, the sooner the better,” she said.

Georgieva said transparency in lending was critical for all parties, and welcomed what she called “encouraging” statements by China to move toward a more consolidated view of the debts held by the Chinese government and other institutions.

“I believe that now is the moment in this crisis, to make … transparency paramount and mandated to the extent possible everywhere,” she said.

(Reporting by Marc Jones in London, and Andrea Shalal and David Lawder in Washington; Editing by Tom Arnold, Ed Osmond and Andrea Ricci)

Global economic outlook ‘somewhat less dire’ than expected: IMF

By Andrea Shalal

WASHINGTON (Reuters) – The global economic outlook is not quite as dark as expected even just three months ago, a top International Monetary Fund official said on Thursday, citing better-than-anticipated economic data from China and other advanced economies.

However, IMF spokesman Gerry Rice told reporters the overall global outlook remained challenging as a result of the coronavirus pandemic and its impact on many economic sectors.

The situation remained “precarious” in many developing countries and emerging markets other than China, he said, noting that the IMF was also concerned about rising debt levels.

The IMF is due to release its latest World Economic Outlook on Oct. 13. In June, it slashed its 2020 global output forecasts further, forecasting the global economy would shrink by 4.9%, compared with a 3.0% contraction predicted in April.

Rice gave no fresh numbers, but said recent data from China and other advanced economies was better than expected.

“Recent incoming data suggests that the outlook may be somewhat less dire than at the time of the WEO update on June 24, with parts of the global economy beginning to turn the corner,” he told a regular briefing.

There were also signs that global trade was slowly beginning to recover after widespread lockdowns aimed at containing the spread of the virus, Rice said.

“But I would emphasize that we are not out of the woods, and the outlook remains very challenging, especially for many emerging markets and developing countries, other than China,” he said, noting that many of those countries faced continued weakness in domestic demand, lower export demand, shrinking remittances and declines in tourism.

“Taken together, we are very concerned that this crisis will reverse the gains in poverty reduction that have been made in recent years, and roll back progress that has been made toward the Sustainable Development Goals,” he said, referring to ambitious goals set out by the United Nations five years ago to end poverty and inequality.

(Reporting by Andrea Shalal in Washington; Editing by Matthew Lewis)

Pandemic could trigger social unrest in some countries: IMF

Pandemic could trigger social unrest in some countries: IMF
By Andrea Shalal

WASHINGTON (Reuters) – New waves of social unrest could erupt in some countries if government measures to mitigate the coronavirus pandemic are seen as insufficient or unfairly favoring the wealthy, the IMF (International Monetary Fund) said in a new report on Wednesday.

Governments had already spent nearly $8 trillion to combat the pandemic and mitigate the economic fallout, but more fiscal stimulus would be needed once the crisis abated, the global lender said in its semi-annual Fiscal Monitor.

The spike in spending would sharply widen fiscal deficits, with global public debt set to rise 13 percentage points to more than 96% of gross domestic product in 2020, it said.

On Tuesday, the IMF forecast the global economy to shrink 3.0% during 2020 as a result of the pandemic, but warned that its forecasts were marked by “extreme uncertainty” and outcomes could be far worse.

Efforts to halt the disease have shut down large swaths of the global economy, with emerging market and developing countries likely to be hardest hit.

While mass protests are unlikely with strict lockdowns in place, unrest could spike when the crisis appeared to be under control, Vitor Gaspar, director of the IMF’s fiscal affairs department, told Reuters in an interview.

To avert further unrest following numerous protests in many parts of the world over the past year, policymakers must communicate with affected communities to build support for measures to tackle the virus, he said.

“This is something we have emphasized: it is crucial to provide support to households and firms that are made vulnerable by the crisis,” he said. “The goal is to support and protect people and firms that have been affected by shutdowns.”

Tensions are already becoming evident as lockdowns leave day laborers and many in the informal economy without jobs or food.

In India’s commercial capital of Mumbai, thousands of jobless migrant workers protested on Tuesday at a railway station, demanding to be allowed to return to their homes in the countryside, after Prime Minister Narendra Modi extended a lockdown of the population of 1.3 billion.

Unemployment has almost doubled to around 14.5% in India since the lockdown began in late March, according to the Centre for Monitoring Indian Economy, a private think-tank.

In India and elsewhere, shutdowns have sparked an exodus of millions of workers from city jobs in small industries and service jobs back to their home villages.

Daily wage earners are particularly vulnerable, and many are already having to skip meals, say World Bank officials.

IMF chief economist Gita Gopinath said previous crises and disasters had fostered solidarity, but there could be a different outcome this time.

“If the crisis is badly managed and it’s viewed as having been insufficient to help people, you could end up with social unrest,” she told Reuters.

To avoid future protests, she said it was critical for the international community to play a supportive role for poorer countries through concessional financing and debt relief.

The report said government spending to date included direct fiscal costs of $3.3 trillion, public sector loans and equity injections of $1.8 trillion, plus $2.7 billion in guarantees and other contingent liabilities of $2.7 trillion.

It forecast lower output and said government revenue was now forecast to be 2.5% of global GDP, lower than was projected in October.

Gaspar said it was hard to predict how much more spending would be needed, but broad-based fiscal stimulus would be an important tool to foster recovery once the outbreak abated.

(Reporting by Andrea Shalal; Editing by Clarence Fernandez)

Too early for accurate figures on coronavirus impact on global growth: IMF

RABAT (Reuters) – It is premature to give precise projections of economic growth in China and the World in 2020 following the outbreak of coronavirus, IMF Managing Director Kristalina Georgieva said on Thursday.

The IMF is still reviewing its projections for growth in China while looking at the impact of the epidemic on the global economy, Georgieva told a news conference in Morocco’s capital Rabat, where she discussed preparations for IMF and World Bank Group meetings to be held in October 2021 in Marrakech.

The IMF said last month global growth is projected to rise from an estimated 2.9% in 2019 to 3.3% in 2020 and 3.4% in 2021.

“We are still hoping that the impact will be a V shaped curve” with a sharp decline in China and sharp rebound after the containment of the virus, she said. “But we are not excluding that it might turn to be a different scenario like a U curve where the impact is somewhat longer.”

The IMF chief also said Argentina’s debt was unsustainable and that she would meet Argentinian Economy Minister Martin Guzman in two days to discuss “how the IMF can be of help”.

The IMF is willing to help Argentina stabilize its economy, support its most vulnerable people and address poverty “in a responsible manner”, Georgieva added.

The Buenos Aires government must carry out negotiations with creditors, she said, adding, “The government already announced its commitment to a collaborative process with its creditors”.

(Reporting by Ahmed Eljechtimi; Editing by Mark Heinrich)

Greek Finance Minister Resigns Ahead of Bailout Vote

Greece’s Finance Minister, Nadia Valavani, has resigned her position after telling Prime Minister Alexis Tsipras that she couldn’t support the bailout measures.

“Alexis, I am ready to serve in any capacity to the end during challenges. However, when our delegation returned with liabilities that are ‘stillborn measures’ and at such a price [by the creditors in fulfilling the reforms program], once again when the dilemma appears of retreating or Grexit, it will be impossible for me to remain a member of the government,” reads Valavani’s letter of resignation.

This ‘capitulation’ is so overwhelming that it will not allow a regrouping of forces. With your signature there will be a deterioration in the status of an already suffering population, and this will be a tombstone around their necks for many years with little potential of redemption,” she wrote.

Valavani was in charge of taxation and overseeing privatization in the nation.

The International Monetary Fund (IMF) expanded on initial criticisms offered Tuesday of the deal between Tsipras and EU officials, saying that Greece’s debts now exceed $300 billion and that creditors will have to write off some of the debt if there is any hope of Greece repaying what it owes.

The European Commission has been critical of giving more money to Greece than what is already being offered.

“Greece has already received more international financing than all of Europe did from the U.S. Marshall Plan after the Second World War,” Commission President Jean-Claude Juncker said.

Greece’s energy minister, Panagiotis Lafazanis, said Wednesday that even if the deal passes the Parliament, the country’s people will never accept it and unite against it.

Major Rallies Scheduled Before Confusing Greek Vote

Major rallies are being scheduled in Greece today ahead of a referendum Sunday on a proposal for the country’s debt that is not even on the table.

The country has already defaulted on a loan from the International Monetary Fund (IMF) and European Union (EU) officials are warning that a no vote from the Greek citizens on Sunday could mean the country’s exit from the Euro.  Economists say such a result would cause ripple effects throughout the world economy.

Greek voters, however, are very confused by the referendum.

“No one is really telling us what it means,” said Erika Papamichalopoulou, 27, a resident of Athens, told the New York Times. “No one is saying what will happen to us if we say yes, or what will happen to us if we say no.”

Banks in the nation remain closed ahead of the Sunday vote.

Prime Minister Alexis Tsipras appeared to take steps Wednesday to accept many of the demands of the nation’s creditors but has also been telling citizens to vote down the referendum on the deal.

European leaders are pointing out that Sunday’s vote is revolving around a deal that is no longer on the table because the framework was built around a bailout package that was revoked on Tuesday.

The IMF surprised many on Thursday when it called for more aid and debt relief for Greece.  The IMF says the Greek situation has significantly deteriorated because of conflict with creditors and calls for European leaders to be more generous financially toward Greece.