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India’s chief economic advisor hits back at IMF downgrade, says it’s ‘significantly off the mark’

India’s chief economic advisor Krishnamurthy Subramanian hit back at the International Monetary Fund for downgrading the country’s growth projection, saying it’s “significantly off the mark.” The IMF last week cut India’s growth outlook to 9.5% for the fiscal year ending in March 2022 — that’s 3% lower than its April forecast of 12.5%. In an accompanying report, the IMF said India’s prospects were downgraded following a severe second wave of Covid-19 outbreak and an “expected slow recovery in confidence from that setback.” Speaking to CNBC’s “Street Signs Asia” on Monday, ...

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Drawing Further Apart: Widening Gaps in the Global Recovery

The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies. Our latest global growth forecast of 6 percent for 2021 is unchanged from the previous outlook, but the composition has changed. Growth prospects for advanced economies this year have improved by 0.5 percentage point, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia. For 2022, we project global growth of 4.9 percent, up from our previous ...

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IMF skims over non-viral risks to global economy

When there’s an elephant in the room, it’s hard to think about much else. That’s the problem for the International Monetary Fund, whose latest economic update focuses on huge risks that Covid-19 still poses to the global economy and consequently pays less attention to some of the other potential pitfalls that may also lie ahead. IMF Chief Economist Gita Gopinath said on Tuesday that the emergence of new highly infectious variants of Covid-19 could wipe about $4.5 trillion off global GDP by 2025. That would unfold either if a new ...

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IMF raises growth forecasts for rich nations, dims outlook for developing world

The International Monetary Fund on Tuesday maintained its 6% global growth forecast for 2021, upgrading its outlook for the United States and other wealthy economies but cutting estimates for developing countries struggling with surging COVID-19 infections. The divergence is based largely on better access to COVID-19 vaccines and continued fiscal support in advanced economies, while emerging markets face difficulties on both fronts, the IMF said in an update to its World Economic Outlook. “Close to 40 percent of the population in advanced economies has been fully vaccinated, compared with 11 ...

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OECD area employment rate rose to 66.8% in the first quarter of 2021, but wide disparities across countries are visible

The OECD area employment rate – the share of the working-age population with jobs – rose to 66.8% in the first quarter of 2021, from 66.7% in the previous quarter. Some care is needed in interpreting the latest developments in the OECD employment rate, as methodological changes to the EU Labour Force Survey blur the comparison between the fourth quarter of 2020 and the first quarter of 2021 for EU countries. In addition, a large part of the increase in the third and, to a lesser extent, fourth quarter of ...

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IMF says Fed ‘highly effective,’ must carefully communicate withdrawal plans

The International Monetary Fund’s Executive Board said the U.S. Federal Reserve has been “highly effective” at managing the COVID-19 crisis and supporting recovery with its commitment to overshoot a 2% inflation target in the near term. The board, releasing its full report here on its annual assessment of U.S. economic policies, said the Fed must carefully communicate its thinking to ensure that the eventual withdrawal of monetary accommodation and asset purchases is orderly and transparent. The IMF has raised concerns that higher U.S. interest rates will drain capital flows from ...

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IMF to keep 2021 global growth forecast at 6%-Georgieva

The International Monetary Fund is estimating this month that global growth for 2021 will be about 6%, the same as forecast in April, but with some countries growing faster and others more slowly, IMF Managing Director Kristalina Georgieva said on Wednesday. Georgieva, speaking at an online event sponsored by the Peterson Institute for International Economics, said that economic recovery will be held back unless the pace of COVID-19 vaccination picks up, adding that a goal of ending the pandemic by the end of 2022 will not be reached at the ...

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IMF urges countries to shift from economic rescue to reforms

The International Monetary Fund’s No. 2 official on Tuesday called on countries to pivot from saving their economies from collapse to reviving growth-oriented policy reforms to boost their recovery prospects and make them more sustainable. IMF First Deputy Managing Director Geoffrey Okamoto said in a blog posting on the IMF website that the COVID-19 pandemic delayed and reversed some pro-growth reforms and restoring these can help make up for output lost during the pandemic. Reforms that allow for faster restructurings and resolution of unviable businesses and labor policies to help ...

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IMF Executive Board Concludes 2021 Article IV Consultation with Greece

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with Greece and endorsed the staff appraisal on July 9 without a meeting on a lapse-of-time basis. Greece entered the pandemic with an unfinished recovery, but the country has demonstrated resilience in facing COVID-19. The economy contracted by 8.2 percent in 2020, better than expected given Greece’s high dependence on tourism and pre-existing vulnerabilities. The government provided among the largest on-budget fiscal stimuli in the euro zone and supervisory and ECB accommodation shielded ...

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IMF: How social unrest can inspire changes in policy

Protests driven by the pandemic’s economic fallout are on the rise, with potentially long-lasting economic consequences. Protests can be catalysts for political reform and social change. But what impact do they have on the economy? According to the latest Global Peace Index, the number of riots, general strikes and anti-government demonstrations around the world have increased by a staggering 244 percent in the last decade. Lockdowns and fears of contagion forced a temporary lull. But in virtually every region of the world, demonstrators are making a comeback. Causes range from ...

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CLIs continue to expand steadily

The OECD Composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend, continue to expand steadily in the OECD area as a whole and in some large emerging-market economies. Among major OECD economies, the CLIs remain above trend and continue to expand at a steady pace in the United States, Japan and Canada as well as in the euro area as a whole, including Germany and Italy. The CLI for the United Kingdom is still expanding and has now reached above trend levels. In France, ...

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IMF board backs $650 bln reserves distribution, targets end-August completion

The International Monetary Fund said on Friday its executive board has backed a $650 billion allocation of IMF Special Drawing Rights, advancing the distribution of currency reserves to the IMF’s 190 member countries towards a targeted completion by the end of August. IMF Managing Director Kristalina Georgieva said she will now present the SDR allocation proposal, the largest in the Fund’s 77-year history, to its Board of Governors, with representatives from every IMF country. “This is a shot in the arm for the world,” Georgieva said in a statement released ...

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Rich nations should put $30 bln of IMF cash towards Africa investments – African ministers

Rich countries should reallocate at least $30 billion of new money from the International Monetary Fund towards investments in Africa to help countries battling the effects of coronavirus and climate change, four African finance ministers said. In an open letter to the leaders of the Group of 20 leading economies, finance ministers from Ghana, the Democratic Republic of Congo, Ivory Coast and Nigeria also urged the rich nations to increase support for poorer countries’ COVID vaccination drive. The IMF has taken steps to implement a new $650 billion allocation – ...

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IMF chief upbeat on growth prospects in central and eastern Europe

The economies of countries in central and eastern Europe will grow at a faster rate than those in western Europe in the next few years, International Monetary Fund Managing Director Kristalina Georgieva said on Thursday. She told a summit of the Three Seas Initiative, which brings together 12 European Union member states that are mainly in central and eastern Europe and the Baltics, that the countries’ combined GDP should this year return to the level seen before the COVID-19 pandemic. “We expect that the year 2021 would be when the ...

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IMF chief sees risk of sustained rise in U.S. inflation

The International Monetary Fund on Wednesday said further fiscal support in the United States could fuel inflationary pressures and warned that the risk of a sustained rise in prices could require raising interest rates earlier-than-expected. Higher U.S. interest rates, in turn, could lead to a sharp tightening of global financial conditions and significant capital outflows from emerging and developing economies, IMF Managing Director Kristalina Georgieva said in a blog published Wednesday with the IMF’s surveillance note for G20 countries. The IMF’s assessment of U.S. inflation risks comes amid sharp criticism ...

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