Tag: IMF

Urgent action needed to strengthen international financial architecture: IMF MD to G20

[ad_1]
Bengaluru: IMF Managing Director Kristalina Georgieva on Saturday said there is an urgent need to strengthen the international financial architecture, especially in the area of debt resolution and Global Financial Safety Net at a time when global growth is set to slow in 2023.
Terming India a relative bright spot, she said, it is an important engine of growth for the world economy, representing about 15 per cent of global growth in 2023.
India’s remarkable progress on Digital Public Infrastructure provides a strong basis to secure robust and inclusive growth over the medium term, she said at the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under India Presidency here.
“With global growth set to slow in 2023 and remain below its historical average, too many people in too many countries are struggling to make ends meet a point that I highlighted in my recent blog on policy priorities for G20. The international community, therefore, has a responsibility to come together to find solutions for the most vulnerable members of our global family,” she said.
This calls for urgent action to strengthen the international financial architecture, especially in the area of debt resolution and strengthening Global Financial Safety Net, she added.
Global Financial Safety Net is a set of institutions and mechanisms that provide insurance against crises and financing to mitigate their impact.
In light of rising debt vulnerabilities in many countries, she said, there is a need to strengthen the debt architecture and improve the speed and effectiveness of debt resolution.
Sovereign debt vulnerabilities, already elevated before the pandemic, have been exacerbated by the shocks stemming from Covid-19 and Russia’s war against Ukraine, she said, adding, this is particularly the case for developing and low-income countries with very limited policy space and huge development needs.

It is therefore imperative for G20 to strengthen the debt architecture and G20 did so in 2020 with Debt Service Suspension Initiative (DSSI) and by establishing Common Framework (CF) for debt resolution, she said.
“Since then, the CF delivered a debt operation for Chad. It is now critical to complete Zambia’s debt restructuring, establish a Creditor Committee for Ghana, and advance work with Ethiopia. Nonetheless, more predictable, timely, and orderly processes are needed both for countries under the CF and for those not covered by it, including Sri Lanka and Suriname,” she said.
“This means that we must enhance dialogue and collaboration on debt issues. This is the goal of the new Global Sovereign Debt Roundtable (GSDR): to bring together creditors official, old and new, and private and debtor countries to discuss key issues that can facilitate the debt resolution process.
“We launched the GSDR under the auspices of India’s G20 Presidency last week at the deputies’ level, followed by an engaged and constructive principals meeting earlier today. We will further build on this discussion during the World Bank-IMF Spring Meetings in April,” she said.
Being the centre of Global Financial Safety Net, she said IMF has been scaling up lending as members confront the significant economic challenges that the past few years have brought.
In a world of great uncertainty and repeated turbulence, it is critical to further bolster IMF’s capacity to support its members, she said.
“This applies most urgently to our concessional financing for low-income countries through our Poverty Reduction and Growth Facility (PRGT). Demand for PRGT support has reached unprecedented levels and can only be met if matched by an increase in PRGT loan and subsidy resources,” she said.
In addition, she said, a successful quota review which IMF’s membership has committed to complete by December 2023 is critical for a strong Global Financial Safety Net.
“The latter has always been important for global stability and is even more important in today’s challenging global environment, especially for the most vulnerable countries and people. Our common interest is to secure a well-functioning and integrated global economy, for the sake of a more secure and prosperous world,” she said.
[ad_2]
#Urgent #action #needed #strengthen #international #financial #architecture #IMF #G20
( With inputs from www.siasat.com )

February 25, 2023
Sri Lanka’s only solution to economic crisis is turning to IMF, says Wickremesinghe

[ad_1]
Colombo: Sri Lankan President Ranil Wickremesinghe on Tuesday emphasised that seeking the IMF bailout package was the only option available to the debt-ridden country to overcome the ongoing economic crisis.
“When a country goes bankrupt, it has to go to the International Monetary Fund. Apart from that, there is no other organisation in the world that provides aid when a country goes bankrupt,” Wickremesinghe said.
Addressing a gathering in the central town of Kandy, he said that each nation that experienced an economic catastrophe recovered after engaging in talks with the IMF and cited the example of Greece which took 13 years to recover from the collapsed economy.
“I have no hope of being President for 13 years,” Wickremesinghe said, amidst opposition to his hard economic reforms which had triggered utility rate hikes and increased personal taxes.
“There is only one way to rebuild this collapsed economy. That is the International Monetary Fund. Different political parties are presenting different stories. I suggested to them to let me know if there is another way to resurrect the collapsed economy.
“The IMF indicates that our tax revenue should be 15 per cent of the GDP as it was in 2019. So far it has gone down to 09 per cent,” he added.
He said the IMF had assigned Sri Lanka 15 tasks to complete.
“The IMF gave us until December 31 to implement it. But we couldn’t do it on that particular day. Then we made plans to get time until January 31. Even at that time, we were unable to complete those 15 points. Finally, the deadline was pushed back to February 15… All 15 tasks assigned to us have been completed. Now it is up to the IMF,” he added.

Wickremesinghe acknowledged that delays over Chinese willingness to restructure Sri Lanka debt had caused problems.
“This is being discussed further. The IMF also suggested that everyone should get on one platform and discuss. However as China is a world power, their procedure is different,” he said.
He said he would meet the Chinese finance minister on February 23 in Bengaluru at the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting this week.
“There, I hope to discuss the debt restructuring method of Sri Lanka with the Chinese Finance Minister,” he added.
Wickremesinghe said if the IMF did not provide assistance, the island nation would have to return to its last year situation of unavailability of fuel and 12-hour power cuts.
Sri Lanka was hit by an unprecedented financial crisis in 2022, the worst since its independence from Britain in 1948, due to a severe paucity of foreign exchange reserves, sparking political turmoil in the country which led to the ouster of the all-powerful Rajapaksa family.
The IMF in September last year approved Sri Lanka a 2.9 billion dollar bailout package over 4 years pending Sri Lanka’s ability to restructure its debt with creditors — both bilateral and sovereign bond holders.
With assurances from creditors, the 2.9 billion dollar facility could get the IMF board approval in March.
The IMF facility would enable the island nation to obtain bridging finance from markets and other lending institutions such as the ADB and the World Bank.
[ad_2]
#Sri #Lankas #solution #economic #crisis #turning #IMF #Wickremesinghe
( With inputs from www.siasat.com )

February 21, 2023
Former Pak Finance Minister to be arrested for derailing IMF deal

[ad_1]
Islamabad: The Pak Federal Investigation Agency (FIA) has sought permission from the Interior Ministry to arrest former Finance Minister Shaukat Tarin in a case pertaining to his alleged role in the derailment of the deal with the International Monetary Fund (IMF), a media outlet reported.
The FIA completed a preliminary inquiry into Tarin’s audio leaks and saw his leaked conversations as an ‘attempt to disrupt’ the IMF loan programme and funds, thereby ‘causing harm’ to the national interest, Dawn reported.
The probe agency sought approval of the Interior Ministry to initiate legal proceedings against Tarin, leading to his arrest, the media outlet reported, citing sources.
Two audio leaks had surfaced in August 2022 in which a man purportedly former minister Tarin can be heard guiding Khyber Pakhtunkhwa (KP) and Punjab finance ministers, belonging to the PTI, to tell the PDM coalition government in the Centre and the IMF that they would not be able to commit to a provincial budget surplus in light of the monsoon floods that wrought havoc across Pakistan.
In a notice issued to Tarin in September 2022, the FIA said that an inquiry had been initiated against his alleged role on the basis of the audio leak. “In it, you are provoking him (Taimur Saleem Khan Jhagra, Finance Minister of KP) to write a letter to the federal government on behalf of the KP government that it will not return extra money of the fiscal budget so that interruption may be created between IMF and the Government of Pakistan.”
Subscribe us on
[ad_2]
#Pak #Finance #Minister #arrested #derailing #IMF #deal

( With inputs from www.siasat.com )

February 12, 2023
Tough times ahead for Pakistan as talks with IMF fails

[ad_1]
Islamabad: Tough times are ahead for Pakistan as Islamabad and the International Monetary Fund (IMF) have failed to reach a staff-level agreement on a much-needed USD 1.1 billion bailout package aimed at preventing the country from going bankrupt.
Analysts believe that the current economic crisis in Pakistan is a culmination of decades of faulty policies, reported The Al Arabiya Post.
Pakistan is seeking a USD 7 billion bailout package from the IMF to prevent the collapse of the economy. While the visiting IMF delegation is asking for several reforms and compliance with its conditionality.
The IMF mission, led by Nathan Porter, began talks on January 31 with the Pakistan government represented by Finance Minister Ishaq Dar for the ninth review of the assistance package.
PM Sharif, while addressing an apex committee meeting in Peshawar following Monday’s mosque bombing that killed over 100 people, said, “As I speak, the IMF delegation is in Islamabad and they are giving Finance Minister Ishaq Dar and his team a tough time.”
Notably, the resource allocation pattern in Pakistan from one budget to another puts a disproportionate focus on populism and militarization. This has put an additional burden on its exchequer leading to an unsustainable fiscal gap, reported Al Arabiya Post.
Pakistan Prime Minister Shehbaz Sharif said on February 3 that the International Monetary Fund (IMF) was giving a “tough time” to his country over the restoration of stalled bailout package at a time of “unimaginable” crisis.
Shehbaz Sharif admitted that the country has no option but to accept the IMF conditionality. “You all know we are running short of resources,” Sharif said, adding the country was “facing an acute economic crisis”.

Moreover, the Pakistani rupee, which has been in a steep slide since last week, hit a record low against the US dollar. The Pakistani rupee fell by 1.9 per cent to a record low of 276.58 per dollar in the inter-bank market the same day, according to the Central Bank, reported Al Arabiya Post.
As the IMF bailout package is conditional on Pakistan implementing IMF suggested measures, its release would require Islamabad to take tough decisions.
After the first round of technical talks between the IMF team and the government concluded on February 4, Pak Prime Minister observed that the lender was imposing conditions that were “beyond our wildest dreams”.
The discussions covered details of expenditure and revenue performance to identify the policy measures- both revenue and non-revenue- that would have to be taken over the next four months of the current fiscal year. The Pak Prime Ministered, despite calling the IMF conditionality unimaginable acknowledged that the country had no choice but to implement the conditions.
It has been seen that Islamabad has a policy obduracy and inertia that prohibit it to shun its populist policies and take reform measures on debt, fiscal, trade and structural fronts to address its economic woes, reported Al Arabiya Post.
Analysts opine that the rocky road Pakistan is passing through is its own creation. In the first instance, a debt-dependent growth strategy is itself a sure recipe to fall into a debt trap, especially when industrial growth and diversification are limited and the export basket is primarily made up of primary goods.
The debt dependence has also eroded the sovereignty of Pakistan and the country’s economic and foreign policies are dictated by those who provide funds. Such dependence on external funding has impeded the structural transformation of the Pak economy and its indigenous growth impetus.
Secondly, an artificially designed threat perception in Pakistan created by the vested interests in Islamabad’s establishment has totally distorted the allocation of resources in the country giving undue emphasis on militarisation in the name of preparing for a threat that does not exist.
The third most remarkable flaw in Pakistan’s economic policy is a deliberate and foolhardy choice of missing the development opportunities generated by free trade, reported Al Arabiya Post.
While Pakistan has a good location to leverage the presence of two giant economies in its neighbourhood, it has opted to isolate one of them and sided with the other at the cost of huge losses in trade creation.
Not giving the Most Favoured Nation status to India and keeping the trade routes closed for direct trade is a self-defeating proposition.
Islamabad could no more avoid taking hard decisions. The situation continues to deteriorate. With only around USD 3.10 billion in foreign exchange reserves, which can only cover 18 days’ worth of imports, and a shortage of basic goods including food and medicine and ever-spiralling inflation, the choice to comply with the IMF conditionality would not be easy for Pakistan.
[ad_2]
#Tough #times #ahead #Pakistan #talks #IMF #fails
( With inputs from www.siasat.com )

February 11, 2023
IMF, Pakistan fail to strike deal on bailout package

[ad_1]
Washington: Cash-strapped Pakistan and the IMF have failed to reach a staff-level agreement on a much-needed USD 1.1 billion bailout package aimed at preventing the country from going bankrupt.
After 10 days of talks here, discussions between the two sides remained inclusive, with the Washington-based global lender saying that discussions will continue virtually in the coming days.
Pakistan, whose foreign exchange has dropped below USD 3 billion, is in desperate need of financial assistance and a bailout package from the International Monetary Fund in order to avoid an economic collapse.
The 9th review is currently pending and its successful completion will bring USD 1.1 billion in the form of the next tranche.
An IMF mission led by Nathan Porter visited Islamabad from January 31 to February 9 to hold discussions under the ninth review of the authorities’ programme supported by the IMF Extended Fund Facility (EFF) arrangement.
The Pakistan side was led by Finance Minister Ishaq Dar.
In a statement Porter said, the IMF team welcomes Pakistan Prime Minister Shehbaz Sharif’s commitment to implementing policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions.
“Considerable progress was made during the mission on policy measures to address domestic and external imbalances,” he said.

“Virtual discussions will continue in the coming days to finalise the implementation details of these policies,” he added.
Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies while scaling up social protection to help the most vulnerable and those affected by the floods, he said.
Among other priorities include allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector.
“The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development,” Porter said.
Pakistan Finance Minister Dar said in a press conference on Friday the government has received a memorandum on the terms and conditions from the IMF for the completion of a USD 7 billion loan programme, but acknowledged that both sides are yet to clinch a staff-level agreement.
“We insisted that they (the Fund delegation) give us the MEFP before leaving so we could look at it over the weekend,” he said, adding that the government and the IMF officials would hold a virtual meeting on it on Monday.
“I am confirming that the MEFP draft has been received by us at 9 am today (Friday). We will completely go through the [MEFP] over the weekend and will hold a virtual meeting with [Fund officials]. It will obviously take a few days,” he said.
The finance minister acknowledged that reforms in certain sectors required by the IMF were in Pakistan’s interest, criticising the previous Pakistan Tehreek-e-Insaf-led government for “economic destruction and misgovernance”.
“It is necessary to fix those things. These reforms are painful but necessary,” Dar added.
He made the statement after the IMF delegation left Pakistan on Thursday night after 10 days of talks with the government.
“It is a standard process which can neither be shortened and hopefully they won’t extend it unnecessarily,” Dar said. The finance minister shared that the country would receive a USD 1.2 billion disbursement in the form of Special Drawing Rights (SDR) after the review’s completion.
SDRs are international reserve assets created by the IMF in 1969 and are allocated to member states to supplement existing official reserves.
Outlining the policy measures agreed upon between the government and the IMF, Dar said taxes amounting to Rs 170 billion would be imposed.
He, however, added that the government would try to ensure that the taxes did not directly burden the common man.
To impose the taxes, the government would introduce a finance bill or ordinance, depending on the situation at the time, Dar said.
“Secondly, we will implement the agreed-upon energy reforms through the federal cabinet,” he said, adding that the primary focus would be on minimising untargeted subsidies and reducing the “flow” in the gas sector to zero so there was no addition to the circular debt.
The Pakistan government initially conveyed to the media at the conclusion of talks on Thursday evening that everything thing was settled and Dar would announce the details at a press conference.
But the conference was postponed and instead Finance Secretary Hamed Yaqoob Shaikh told the media that the two sides agreed on a set of prior actions but a staff-level agreement (SLA) on the Memorandum of Economic and Financial Policies (MEFP) was not signed yet.
“All issues have been settled and prior actions agreed upon,” said Shaikh, adding that the SLA would be finalised in the days to come.
The IMF mission is going to share the details of talks with the top IMF officials in Washington and then issue a statement.
The finance secretary rejected the impression that there was any disagreement by saying that “all things have been settled”.
He, however, refused to divulge the details of the prior actions. He said the finance minister would address a press conference after the fund had issued its statement.
The IMF mission came to Pakistan after Islamabad agreed to take tough decisions, including restoring the market-based exchange rate and increasing petroleum prices.
In the first phase, Pakistan’s technical discussion with the IMF went on till February 3. It was followed by the second phase of policy negotiations that concluded on February 9 to finalise a memorandum of economic and financial policies.
Pakistan inked a USD 6 billion IMF programme in 2019, which last year expanded to USD 7 billion.
Earlier, talks on the review were originally scheduled to be held in October but were delayed after Dar refused to implement some of the conditions of the fund after taking the finance ministry from Miftah Ismail.
Pakistan’s reserves have fallen below USD 3 billion and the country is feared to default on its external liabilities unless the IMF unlocks its funds for it. The availability of IMF money will avoid the default but it is feared to bring a tsunami of price hikes.
[ad_2]
#IMF #Pakistan #fail #strike #deal #bailout #package
( With inputs from www.siasat.com )

February 10, 2023
IMF expresses concern over possibility of Pak opposition creating hurdles in govt’s hard economic decisions

[ad_1]
Islamabad: The IMF has expressed concern that Pakistan’s opposition parties might create hurdles in the way of implementing the tough economic decisions of the cash-strapped Shehbaz Sharif-led government, media reports said on Wednesday.
The views of the global lender came as a high-level delegation led by the International Monetary Fund (IMF) Mission Chief Nathan Porter on Tuesday met Finance Minister Ishaq Dar and other officials as part of the opening session of 10-day long talks for the completion of the much-delayed programme review for a bailout package.
Porter raised the question about the implication of the opposition’s role in difficult decisions that Pakistan would have to take to avoid the default, The Express Tribune newspaper reported.
“The fund had concerns that the opposition might create some problems in the way of rolling out additional taxation measures that the government was planning to impose to revive the talks,” it quoted Porter as saying.
However, Finance Minister Dar assured the IMF mission head that the government believed in political dialogue and there was nothing to worry about.
Dar stated that the government would try to enforce additional taxes in a manner that would avoid any untoward legal and political challenges, the report said, citing sources.
The government was planning to promulgate a presidential ordinance but in case the IMF concerns remained, it might bring an act of parliament. Parliament route would take at least 14 days before the new taxes were implemented, the report said.
Pakistan signed a USD 6 billion IMF programme during Imran Khan’s government in 2019, which was increased to USD 7 billion last year.

The programme’s ninth review is currently pending with talks being held between IMF officials and the government for the release of USD 1.18 billion.
But the IMF suspended disbursements in November last year due to Pakistan’s failure to make more progress on fiscal consolidation amidst the political turmoil in the country.
As part of the tough decisions, the Pakistani government on Tuesday hiked the price of Liquefied Petroleum Gas (LPG) by 30 per cent and finalised a minimum of Rs 6 per unit average increase in electricity rates between now and August, according to a report in the Dawn newspaper.
During the talks, Dar assured the IMF team that Pakistan would soon roll out a plan to reduce the gas sector’s circular debt by half to around Rs700 billion.
Dar, according to the finance ministry, said that reforms were being introduced in the power sector and a high-level committee had been formed for devising modalities to offset the menace of circular debt in the gas sector.
[ad_2]
#IMF #expresses #concern #possibility #Pak #opposition #creating #hurdles #govts #hard #economic #decisions
( With inputs from www.siasat.com )

February 1, 2023
Downing Street defends UK economy after dire IMF forecast

[ad_1]
London: British Prime Minister Rishi Sunak’s office has been forced to defend the country’s economic performance on Tuesday after a dire International Monetary Fund (IMF) forecast that the UK is set to fare worse than any other country in the developed world.
In the latest update of its economic forecasts, the IMF said that it expected the UK’s gross domestic product (GDP) to contract by 0.6 percent in 2023, a downgrade from its previous assessment.
Downing Street insisted that the UK’s economy is strong despite the IMF warning that Britain’s economy will go into reverse this year.
“The IMF itself said that UK economic policy is now on the right track,” Sunak’s official spokesperson told reporters.
The spokesperson added that the UK outperformed many forecasts last year and was “predicted to grow faster than Germany and Japan over the coming years”.
The Opposition Labour Party raised an urgent question in the House of Commons on the IMF forecast and blamed it on 13 years of a Conservative Party led government’s “failure”.
“Today’s IMF assessment holds a mirror up to the wasted opportunities and it is not a pretty sight,” said Rachel Reeves, the shadow chancellor.
“The UK is the only major economy forecast to shrink this year. Weaker growth compared to our competitors for both of the next two years. The world upgraded, Britain downgraded. Growth even worse than sanctions-hit Russia,” said Reeves.

IMF said in its latest analysis that while the broader global economy was doing better than expected, with inflation having peaked and investment beginning to turn around, the UK economy would face a downgrade “reflecting tighter fiscal and monetary policies and financial conditions and still-high energy retail prices weighing on household budgets”.
UK Chancellor Jeremy Hunt said of the forecast: “The governor of the Bank of England recently said that any UK recession this year is likely to be shallower than previously predicted, however these figures confirm we are not immune to the pressures hitting nearly all advanced economies.
“Short-term challenges should not obscure our long-term prospects the UK outperformed many forecasts last year, and if we stick to our plan to halve inflation, the UK is still predicted to grow faster than Germany and Japan over the coming years.”
[ad_2]
#Downing #Street #defends #economy #dire #IMF #forecast
( With inputs from www.siasat.com )

January 31, 2023
Indian economy remains a ‘bright spot’: IMF

[ad_1]
Washington: India’s economy has retained the crown of “a bright spot” in the International Monetary Fund’s latest World Economic Outlook report released on Monday and it is slated to account for half of the global growth in 2023, compared to just a tenth coming from the combined might of the US, the world’s largest economy, and Europe, which comprises some of the largest economies.
The Indian economy is expected to grow by 6.1 per cent in 2023, which is 0.7 percentage points lower than 6.8 per cent in 2022, which was earlier projected by the fund in its October forecast. The growth rate will be back at the 2022 level of 6.8 per cent in 2024, the fund has further projected, based on “resilient domestic demand despite external headwinds”.
“India remains a bright spot,” Pierre-Olivier Gourinchas, an IMF official, wrote in a blog accompanying the World Economic Outlook update, a quarterly report.
“Together with China, it will account for half of global growth this year, versus just a tenth for the US and euro area combined.”
The phrase “a bright spot” has been used for India’s economic growth for years now by the IMF, the World Bank and other similar bodies, in a nod to its inner resilience against external headwinds and bucking the trend either on the global stage or in the shrunken confine of Asia and South Asia.
India’s projected growth rate of 6.1 per cent for 2023 is 0.8 percentage points better than the IMF expectation of 5.3 per cent for a category of countries the fund describes as Emerging and Developing Asia. The 2024 match-up is even better, with India expected to got to 6.8 per cent while the Asian entity will see a decline to 5.2 per cent.
The global economy, however, is in a much better shape than how the fund saw it in October. It is projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, then rise to 3.1 per cent in 2024.
In October, the IMF projected global growth is forecast to slow from 6 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023, and had called it the “weakest growth profile since 2001 except for the global financial crisis and the acute phase of the Covid-19 pandemic and reflects significant slowdowns for the largest economies: a US GDP contraction in the first half of 2022, a euro area contraction in the second half of 2022, and prolonged Covid-19 outbreaks and lockdowns in China with a growing property sector crisis”.

The headwinds for 2023 global economic growth were, as projected by the IMF, “central bank rates to fight inflation and Russia’s war in Ukraine”.
Additionally, the rapid spread of Covid-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery. Global inflation is expected to fall from 8.8 per cent in 2022 to 6.6 per cent in 2023 and 4.3 per cent in 2024, still above pre-pandemic (2017-19).
[ad_2]
#Indian #economy #remains #bright #spot #IMF
( With inputs from www.siasat.com )

January 31, 2023
IMF: Global growth to slow less than expected

[ad_1]

Global growth is slowing down less than previously expected, the International Monetary Fund said Tuesday in its updated World Economic Outlook.
World output is set to grow by 2.9 percent this year, down from 3.4 percent in 2022, weighed down by tightening monetary policy and the war in Ukraine.
That’s an increase of 0.2 percentage points compared with the 2.7 percent and 3.2 percent figures forecasted in October, thanks to stronger-than-expected growth in the third quarter of 2022.
Growth will resume in 2024 at 3.1 percent.
“This time around, the global economic outlook hasn’t worsened,” Pierre-Olivier Gourinchas, IMF chief economist and research director, wrote in a blog post. “That’s good news, but not enough.”
Eurozone growth is expected to reach 0.7 percent this year—a 0.2 percentage-point upgrade — and 1.6 percent next. In 2022, the IMF reviewed eurozone growth upward to 3.5 percent from 3.1 percent previously because of lower energy prices and additional demand-side support measures.
Global headline inflation has peaked in the third quarter of last year, the Fund said, pushed down by a decline in commodity prices. But so-called core inflation, which excludes volatile energy and food prices, has yet to peak, spurred on by tight labor markets which generate strong wage growth.
The IMF expects global inflation to fall this year to 6.6 percent and to 4.3 percent in 2024, down from 8.8 percent in 2022 on average. Both headline and peak inflation are expected to remain higher than pre-pandemic levels in 2024.

[ad_2]
#IMF #Global #growth #slow #expected
( With inputs from : www.politico.eu )

January 30, 2023
IMF delegation to visit Pakistan next week for talks on 9th review: official

[ad_1]
Islamabad: An international Monetary Fund (IMF) delegation will visit Pakistan next week to discuss the ninth review of the USD 7 billion Extended Fund Facility, Dawn reported citing the official.
According to the statement released by the IMF, the international fund organization Resident Representative for Pakistan Esther Perez Ruiz said: “At the request of the authorities, an in-person Fund mission is scheduled to visit Islamabad [from] January 31 – February 9 to continue the discussions under the ninth EFF review.”
The Pakistani rupee has dived to a historic low against the United States dollar after an exchange cap was lifted as the cash-strapped country seeks the help from IMF. Earlier, Pakistan entered a USD 6 billion programme in 2019 but later on, it increased to USD 7 billion.
If everything goes well then the international organization would release USD 1.8 billion, which is still pending, according to Dawn.
It had earlier been put off for two months due to the Pakistan Muslim League-N-led government’s unwillingness to accept certain conditions placed before it by the IMF, and the disagreements have yet to be resolved.
However, it is pertinent to mention that Pakistan Prime Minister Shehbaz Sharif has indicated that the government is finally ready to swallow the bitter pill of the IMF’s “stringent” conditions to revive the loan programme.
In the statement, Ruiz said that the mission would focus on policies to restore domestic and external sustainability, including strengthening the fiscal position with durable and high-quality measures while supporting the vulnerable and those affected by the floods; restoring the viability of the power sector and reverse the continued accumulation of circular debt; and re-establish the proper functioning of the foreign exchange market, allowing the exchange rate to clear the forex shortage.
“Stronger policy efforts and reforms are critical to reduce the current elevated uncertainty that weighs on the outlook, strengthen Pakistan’s resilience, and obtain financing support from official partners and the markets that is vital for Pakistan’s sustainable development,” Dawn quoted her as saying.

The Financial Post recently reported that with Pakistan Finance Ministry being unable to furnish tenable answers for the IMF to commence formal negotiations on the 9th review, it may delay the release of funds from the IMF.
The IMF visit to Pakistan scheduled for October has been delayed amidst differences between Pakistan’s commitment to the IMF on fiscal consolidation.
“Pakistan and the global lender continued talks virtually but differences still persisted over tax collection targets, and non-starter energy reforms including hiking of gas tariff, rising circular debt, and expenditure overrun, making consensus harder to strike on a staff-level agreement for completion of the review,” according to the Financial Post report.
Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan has said that the government knows that it has no other option but to go to the International Monetary Fund (IMF) and face humiliation and that their legs start shaking at the name of elections, reported The Express Tribune.
[ad_2]
#IMF #delegation #visit #Pakistan #week #talks #9th #review #official
( With inputs from www.siasat.com )

January 27, 2023