Last week, the International Monetary Fund’s executive board convened “an informal meeting” in anticipation of what Managing Director Christine Lagarde called “the Argentine authorities’ intention to request an exceptional Stand-By Arrangement.” The May 18 gathering to discuss significant financial assistance for the South American country’s economic reforms and to restore market confidence was an unusual step for the Fund, which has gone through its share of complicated rescues. This atypical meeting didn’t come about because of today’s Argentine case. Instead, it was the result of the country’s historical relations with ...

European economic growth is strong, mainly thanks to domestic demand, but governments are not taking sufficient advantage of the good times to reduce their debt and implement reforms, the International Monetary Fund said in a forecast on Tuesday. The IMF forecast that growth in advanced European economies, mainly the euro zone, would slow to 2.3 percent this year from 2.4 percent in 2017 and then decelerate to 2.0 percent in 2019. The European Commission forecasts the same growth slow-down. “Amid the good times, however, fiscal adjustment and structural reform efforts ...

Argentina requested a “high access stand-by arrangement” from the IMF last week after the peso depreciated rapidly, prompting the central bank to sell reserves and hike interest rates to 40 percent in a bid to contain one of the world’s highest inflation rates and stop the peso’s slide. The bank sold $408 million (£300.8 million) in reserves on Monday as part of its effort to shore up the peso. During all of last week, the currency weakened 6.30 percent, and for the first 11 days of May it weakened 12.03 ...

The International Monetary Fund on Monday stepped up pressure on Chancellor Angela Merkel’s government to reduce Germany’s persistently large current account surplus by hiking public investment. The IMF and the European Commission have long urged Germany to boost domestic demand by lifting wages and investment to help cut its large trade surplus. But the debate has heated up since the election of U.S. President Donald Trump, who has repeatedly criticised Germany’s export strength. The IMF said boosting productivity growth and investment would raise the German economy’s long-term growth potential and ...

The International Monetary Fund’s Christine Lagarde said the lender is seeking a rapid resolution for talks with Argentina over the establishment of a credit line that will help restore confidence in the country’s economy. Argentina wants a high-access stand-by arrangement, the fund said on Thursday after meetings between Managing Director Lagarde and a team of Argentine officials led by Treasury Minister Nicolas Dujovne. Dujovne also met with officials from the Fund’s Western Hemisphere unit and with David Malpass, the U.S. Treasury undersecretary for international affairs. “Our meeting was a timely ...

The International Monetary Fund raised its forecast for economic growth on the Chinese mainland in 2018 to 6.6 percent from 6.5 percent, but warned that the simmering Sino-US trade dispute would negatively affect global economic growth and investment. ‘The Chinese mainland economy is transiting from an export-oriented economy to domestic consumption. Growth of the new digital economy and new service sector are quite higher,’ said Changyong Rhee, director of the IMF’s Asia-Pacific Department at a media briefing on May 9. He added the IMF has seen many new growth engines ...

Economies of Asia, including India, have witnessed strong growth and low inflation. While headline inflation was lowered by relatively low commodity prices, core inflation remained moderate despite strong demand conditions. But why has inflation been so low? And how long will it last? The International Monetary Fund in its most recent regional economic outlook report tries to understand the dynamics in Asia and derives lessons for policymakers. Here are some key takeaways from the IMF study. Is the recent low inflation driven by temporary factors? The IMF study finds that ...

The growth outlook for Asian economies remains strong, but the region is vulnerable to sudden tightening in global financial conditions, further market corrections and a shift towards protectionist policies, the International Monetary Fund (IMF) said. In its regional economic outlook update, the IMF projected Asia to grow 5.6 percent this year and next, up 0.1 percentage point from its last update in October and accounting for about two thirds of global growth. The slight improvement in near-term prospects reflects “strong and broad-based” global growth and trade, reinforced by fiscal stimulus ...

Argentina turned to the International Monetary Fund for financial backing to help stem the peso’s depreciation and rising discontent over high inflation and reduced government spending. In a televised address on Tuesday, President Mauricio Macri said the move is aimed at avoiding a crisis like those that Argentina suffered in the past. It will be the IMF’s first financial support package for the country since 2003. Argentina has had a rocky relationship with the IMF since the country defaulted on its foreign debt in 2001, sparking a yearslong period of ...

Sub-Saharan African nations are at growing risk of debt distress because of heavy borrowing and gaping deficits, despite an overall uptick in economic growth, the International Monetary Fund warned on Tuesday. The sober assessment comes as African countries continue to tap international debt markets and issue record levels of debt in foreign currencies, spurred on by insatiable investor demand for yields. In its economic outlook for the region released in Accra Ghana, the Fund projected the rate of economic expansion would rise to 3.4 percent this year, up from 2.8 ...

Saudi Arabia would need oil prices to average $85-$87 a barrel this year to balance its state budget, an International Monetary Fund (IMF) official said. The kingdom’s gross domestic product (GDP) contracted last year for the first time since 2009, but the IMF is forecasting growth of 1.8 percent this year, partly because the impact of oil output cuts under a global deal among producers will fade. Higher oil prices, with Brent crude LCOc1 near multi-year highs at about $74 a barrel, are also expected to help the economy. “The ...

Iran’s government will need to accelerate economic reforms, including plans to overhaul its banking system, should President Donald Trump decide to quit the 2015 nuclear accord with the Islamic Republic, according to a senior International Monetary Fund official. “The possibility that the U.S. walks out of the nuclear deal would increase uncertainty and uncertainty would require some measures to stabilize the market,” Jihad Azour, head of the IMF’s Middle East and Central Asia department, said in an interview in Dubai on Monday. Trump will decide whether to leave the deal, ...

After significant reforms, Greece’s recovery from deep economic depression is finally gaining traction, according to the OECD. Economic growth is picking up led by exports. Labour market reforms have improved competitiveness and are helping to create long-awaited jobs. GDP growth is projected to strengthen, remaining above 2 percent in 2018 and 2019. In its latest Economic Survey of Greece, the OECD recognises the remarkable reform effort of the past two years. The study highlights that the credibility of public finances has markedly strengthened, after an unprecedented fiscal consolidation, boosting investors’ ...

Workers in OECD countries paid just over a quarter of their gross wages in tax on average in 2017, with just over half of countries seeing small increases in the personal average tax rate, according to a new OECD report. Taxing Wages 2018 shows that the “net personal average tax rate” – income tax and social security contributions paid by employees, minus any family benefits received, as a share of gross wages – was 25.5% across the OECD. This OECD-wide average rate, calculated for a single person with no children ...

The European Central Bank should continue to provide ample stimulus but some nations in the emerging part of Europe will have to normalise monetary policy quicker, Poul Thomsen, the head of the IMF’s European Department, said. “With some exception, inflation is running well below target in most of Europe,” Thomsen said in a press conference. “In view of this, we support the continuation of very accommodative monetary policy, not least by the ECB.” “In emerging Europe, the somewhat stronger but still-below-target inflationary pressures suggest a somewhat more advanced cyclical position,” ...