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IMF says Mideast, North Africa economies resilient in 2022

The economies of Middle Eastern and North African countries were resilient this year, but double-digit inflation is expected to slow growth in 2023, the International Monetary Fund said Monday. The IMF forecast GDP growth at 5% in 2022 for countries in the region. For oil-exporting nations, growth was projected at 5.2%, mainly due to high oil prices and robust GDP growth in other countries, which offset the impact of high food prices. But the rate of growth is expected to slow in 2023, due in part to inflation driven by ...

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MENA, Central Asia economies show resilience but global headwinds loom -IMF

Economic activity in the Middle East and Central Asia was resilient with recovery continuing in 2022 but the region must guard against growing global headwinds and push ahead with reforms, the International Monetary Fund said on Monday. While crude exporters benefit from an oil windfall projected to accrue a cumulative $1 trillion over 2022-2026, emerging market and middle-income states face deep terms-of-trade shock and curtailed access to market financing. Countries should be on alert as “headwinds are growing, vulnerabilities are growing” with a global economic slowdown, volatile food and energy ...

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China’s policies contribute 0.6 percentage points to GDP growth: IMF official

China’s policy stance in 2022 made a positive contribution of 0.6 percentage points to the country’s economic development amid the COVID-19 pandemic and weakening external demand, a representative of the IMF in China said on Thursday, as the institution warned that the “worst is yet to come” for the global economy. As many economies are troubled by the US’ aggressive monetary tightening, historically high inflation and growing geopolitical tensions, China will continue to serve as a stabilizer for the global economic recovery, experts said. Strong and effective monetary and fiscal ...

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IMF cuts Asia’s economic forecasts as China’s slowdown bites

The International Monetary Fund cut Asia’s economic forecasts as global monetary tightening, rising inflation blamed on the war in Ukraine, and China’s sharp slowdown dampened the region’s recovery prospects. While inflation in Asia remains subdued compared with other regions, most central banks must continue raising interest rates to ensure inflation expectations do not become de-anchored, the IMF said in its Asia-Pacific regional economic outlook report. “Asia’s strong economic rebound early this year is losing momentum, with a weaker-than expected second quarter,” said Krishna Srinivasan, director of the IMF’s Asia and ...

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Ukraine external financing needs could reach $5 bln a month, IMF’s Georgieva says

Ukraine’s external financing needs will be around $3 billion a month through 2023 in a best-case scenario, but could rise as high as $5 billion if Russian bombing becomes “even more dramatic,” IMF Managing Director Kristalina Georgieva said. The International Monetary Fund is working with Ukrainian authorities to help define and implement the country’s macroeconomic policies and what will be required to become a member of the European Union, as well as produce reliable financial projections, Georgieva told a conference in Berlin on Tuesday. She said IMF staff had met ...

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IMF chief wants central banks to keep raising rates to hit ‘neutral’ level

International Monetary Fund chief Kristalina Georgieva said that central banks should keep raising interest rates further to fight inflation until they hit a “neutral” level, though in most cases they have not reached this point. Speaking to Reuters in Berlin a day before the European Central Bank is widely expected to raise rates by 75 basis points, the fund’s managing director said it would take until 2024 for the positive effect of central banks raising rates globally to be felt. The ECB had for months said that its first step ...

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IMF chief expects UK PM Sunak’s government to stick to fiscal discipline

IMF chief Kristalina Georgieva said on Wednesday she expects new Prime Minister Rishi Sunak to steer Britain towards fiscal sustainability and said he was right to warn the public of difficult decisions ahead. Speaking to Reuters in Berlin, Georgieva welcomed what she said was Sunak’s clarity and constructive attitude that she knew from his time as finance minister. She expects to speak to the recently appointed finance minister Jeremy Hunt in coming days. “The new prime minister comes with a platform that he has shaped during his days as a ...

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IMF concludes mission on Ukraine, urges authorities to avoid eroding tax revenues

An International Monetary Fund team held productive discussions with Ukrainian authorities in Vienna this week and will continue work in coming weeks on Ukraine’s request for enhanced program monitoring, IMF mission chief Gavin Gray said on Friday. Gray said IMF staff met with Ukrainian authorities, and discussed its findings with Finance Minister Serhiy Marchenko and Governor of the National Bank of Ukraine Andriy Pyshnyi. He said Russia’s invasion had caused tremendous human suffering and had a severe economic impact, with the fiscal deficit rising to unprecedented levels. But IMF officials ...

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IMF’s Gopinath: Fed and ECB right to tighten policy – Handelsblatt

Inflation in the United States is “very stubborn” and the Federal Reserve should “stay the course” and tighten monetary policy or else lose credibility, said Gita Gopinath, the International Monetary Fund’s first deputy managing director. The Fed has raised interest rates faster this year than any time since the early 1980s, when inflation was even higher and so entrenched in day-to-day American life that it took pushing short-term borrowing costs – and the unemployment rate – into double digits before price pressures finally receded. “Inflation continues to be very stubborn,” ...

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Asia Sails Into Headwinds From Rate Hikes, War, and China Slowdown

Asia’s strong economic rebound early this year is losing momentum, with a weaker-than-expected second quarter. We have cut growth forecasts for Asia and the Pacific to 4 percent this year and 4.3 percent next year, which are well below the 5.5 percent average over the last two decades. Despite this, Asia remains a relative bright spot in an increasingly dimming global economy. Waning momentum reflects three formidable headwinds, which may prove to be persistent: A sharp tightening of financial conditions, which is raising government borrowing costs and is likely to ...

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Global inflation causing ‘horrifying’ food insecurity, says IMF Africa head

Africa’s central banks are walking a tightrope trying to curb inflation that is mostly out of their control and causing “horrifying” food insecurity, the International Monetary Fund’s Africa head warned. The IMF’s twice-yearly Regional Economic Outlook released on Friday warned that 123 million people, or 12% of sub-Saharan Africa’s population, face acute food insecurity – where the lack of access to adequate food puts someone’s life or livelihood in immediate danger – by the end of the year. That compares to around 82 million people affected before the COVID-19 pandemic, ...

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Latin America Faces a Third Shock as Global Financial Conditions Tighten

As Latin American countries continue to grapple with the effects of two previous shocks, the pandemic and Russia’s invasion of Ukraine, they face a third shock: the tightening of global financial conditions. Growth momentum is currently positive, reflecting the return of service sectors and employment to pre-pandemic levels, and the overall support of favorable external conditions—high commodity prices, strong external demand and remittances , and rebounding tourism. This has led to several upward revisions to growth this year. But financing is becoming scarcer and costlier as major central banks raise ...

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IMF urges most Asian central banks to tighten policy further

Most Asian central banks must tighten monetary policy further as rising commodity prices and their currencies’ depreciation, driven by steady U.S. interest rate hikes, push inflation above their targets, the International Monetary Fund said. China and Japan are exceptions, where the economic recovery has been weaker, slack remains substantial and inflation has not risen as sharply as elsewhere, said Krishna Srinivasan, director of the IMF’s Asia and Pacific Department. Many Asian currencies depreciated “quite sharply” as U.S. monetary tightening led to widening interest rate differentials, helping push up import costs ...

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IMF sees Japan’s currency intervention as ‘signaling’ move with short-term impact

Japan’s currency intervention last month to stop a sharp slide in the yen was likely a “signaling action” to smooth volatility, though the impact of such moves tend to be short-lived, a senior International Monetary Fund official said on Thursday. Recent volatile market moves heighten the need for the Bank of Japan to maintain ultra-low interest rates and avoid making tweaks to yield curve control (YCC), Sanjaya Panth, deputy director for the IMF’s Asia and Pacific Department, told Reuters in an interview. “We think this is not a good time ...

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IMF’s Georgieva says 28 countries have expressed interest in new IMF support

International Monetary Fund Managing Director Kristalina Georgieva on Thursday said that the Washington-based lender has provided $90 billion on 18 new and augments programs since Russia’s invasion of Ukraine in February, and 28 countries have expressed interest in receiving new IMF support. Georgieva said during the IMF and World Bank annual meetings in Washington that the Fund’s lending is “aligned with our counter-cyclical role,” and since the pandemic began it has provided $260 billion in financial support to 93 countries. “And we now have 28 additional countries expressing interest in ...

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