After weeks of anti-India rhetoric, Maldives' President Mohammad Muizzu has shifted to a distinctly reconciliatory tone for New Delhi. The reasons are not difficult to find as the Maldives owes India some $49 million and Male seeks debt relief from New Delhi.

Maldives seeks hefty debt relief from India

The IMF has reached a staff-level agreement with cash-strapped Pakistan on the final review of a USD 3 billion bailout, paving the way for the release of the last USD 1.1 billion tranche from the lender.

The release of the final tranche is subject to the approval of the IMF's Executive Board, the global lender said.

An International Monetary Fund (IMF) team, led by Nathan Porter, visited Islamabad from March 14-19 to hold discussions on the second review of Pakistan's economic programme supported by an IMF.

The IMF Executive Board approved the USD 3 billion Stand-By Arrangement for Pakistan last year.

The agreement recognises the strong programme implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government's intentions for ongoing policy and reform efforts to move Pakistan from stabilisation to a strong and sustainable recovery," the IMF said in a statement.

Given the timing of the Second Review mission, immediately following the formation of the new cabinet, we expect the review to be considered by the IMF's Board in late April, the Fund said.

Given the timing of the Second Review mission, immediately following the formation of the new cabinet, we expect the review to be considered by the IMF's Board in late April, the Fund said.

The IMF has reached a staff-level agreement with cash-strapped Pakistan on the final review of a USD 3 billion bailout, paving the way for the release of the last USD 1.

The IMF has reached a staff-level agreement with cash-strapped Pakistan on the final review of a USD 3 billion bailout, paving the way for the release of the last USD 1.1 billion tranche from the lender. The release of the final tranche is subject to the approval of the IMF's Executive Board, the global lender said. An International Monetary Fund (IMF) team, led by Nathan Porter, visited Islamabad from March 14-19 to hold discussions on the second review of Pakistan's economic programme supported by an IMF. The IMF Executive Board approved the USD 3 billion Stand-By Arrangement for Pakistan last year. The agreement recognises the strong programme implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government's intentions for ongoing policy and reform efforts to move Pakistan from stabilisation to a strong and sustainable recovery," the IMF said in a statement. Given the timing of the Second Review mission, immediately following the formation of the new cabinet, we expect the review to be considered by the IMF's Board in late April, the Fund said. Given the timing of the Second Review mission, immediately following the formation of the new cabinet, we expect the review to be considered by the IMF's Board in late April, the Fund said.

IMF reaches staff-level agreement with Pakistan on releasing last tranche of $3 billion bailout

European startups are facing a funding crunch. Venture capital funding in the region has plummeted by over 50% in the past two years, dropping from $130 billion in 2021 to $62 billion in 2023. This funding shortfall is forcing many young companies to get creative with their financing strategies.

European startups turn to complex convertible debt deals

Pakistan is bracing for a crucial Economic Evaluation as the IMF Mission arrives in Islamabad to assess the nation's Financial standing with talks scheduled from March 14 to 18th.

Pakistan: IMF mission to arrive in Islamabad for economic review

Pakistan is reportedly planning to seek a new loan of at least $6 billion from the International Monetary Fund (IMF) to assist the incoming government in repaying billions of dollars in debt due this year. According to Bloomberg News, a Pakistani official revealed this development, highlighting the country's efforts to manage its financial obligations.

The country aims to negotiate an Extended Fund Facility (EFF) with the IMF, with talks expected to commence in March or April.&nbsp;

Last summer, Pakistan narrowly avoided defaulting on its financial obligations, owing&nbsp;to a short-term bailout package from the IMF. However, as the programme is set to expire next month, the incoming government must negotiate a comprehensive, long-term arrangement to ensure the stability of the $350-billion economy.

<a href="https://www.wionews.com/south-asia/ex-pakistani-bureaucrat-retracts-poll-rigging-allegations-cites-lucrative-positions-promised-by-pti-693006">Also read |&nbsp;Ex-Pakistani bureaucrat retracts poll rigging allegations, cites 'lucrative positions' promised by PTI</a>

<h2>IMF's conditions and prior measures</h2>

In preparation for the bailout, Pakistan had to implement various measures as per the IMF's requirements. These included revising its budget, raising its benchmark interest rate, and implementing hikes in electricity and natural gas prices. Such measures were necessary to meet the IMF's conditions and stabilise the country's financial situation.

<a href="https://www.wionews.com/south-asia/pakistan-elections-2024-can-nawaz-sharif-put-pakistans-economy-back-on-track-687444">Also read |&nbsp;Data lab | Pak economy has been in the red for decades. Can Nawaz Sharif engineer a turnaround?</a>

Neither the IMF nor Pakistan's caretaker finance minister provided an immediate response to Reuters' request for comment on the Bloomberg report. However, ratings agency Fitch emphasised the critical importance of securing financing from multilateral and bilateral partners for Pakistan's external position. Failure to secure a new deal could exacerbate external liquidity stress and increase the risk of default.

Also watch |&nbsp;Pakistan: PPP Chairman announces coalition government with PML-N

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Securing a new IMF loan is imperative for Pakistan's financial stability and credit profile. The next government faces the urgent task of negotiating a comprehensive, long-term arrangement with the IMF to address the country's debt repayment needs and ensure economic stability in the face of external challenges.

(With inputs from agencies)

Pakistan is reportedly planning to seek a new loan of at least $6 billion from the International Monetary Fund (IMF) to assist the incoming government in repaying billions of dollars in debt due this year.

Pakistan is reportedly planning to seek a new loan of at least $6 billion from the International Monetary Fund (IMF) to assist the incoming government in repaying billions of dollars in debt due this year. According to Bloomberg News, a Pakistani official revealed this development, highlighting the country's efforts to manage its financial obligations. The country aims to negotiate an Extended Fund Facility (EFF) with the IMF, with talks expected to commence in March or April. Last summer, Pakistan narrowly avoided defaulting on its financial obligations, owing to a short-term bailout package from the IMF. However, as the programme is set to expire next month, the incoming government must negotiate a comprehensive, long-term arrangement to ensure the stability of the $350-billion economy. Also read | Ex-Pakistani bureaucrat retracts poll rigging allegations, cites 'lucrative positions' promised by PTI IMF's conditions and prior measures In preparation for the bailout, Pakistan had to implement various measures as per the IMF's requirements. These included revising its budget, raising its benchmark interest rate, and implementing hikes in electricity and natural gas prices. Such measures were necessary to meet the IMF's conditions and stabilise the country's financial situation. Also read | Data lab | Pak economy has been in the red for decades. Can Nawaz Sharif engineer a turnaround? Neither the IMF nor Pakistan's caretaker finance minister provided an immediate response to Reuters' request for comment on the Bloomberg report. However, ratings agency Fitch emphasised the critical importance of securing financing from multilateral and bilateral partners for Pakistan's external position. Failure to secure a new deal could exacerbate external liquidity stress and increase the risk of default. Also watch | Pakistan: PPP Chairman announces coalition government with PML-N Securing a new IMF loan is imperative for Pakistan's financial stability and credit profile. The next government faces the urgent task of negotiating a comprehensive, long-term arrangement with the IMF to address the country's debt repayment needs and ensure economic stability in the face of external challenges. (With inputs from agencies)

Pakistan eyes $6bn IMF loan programme to tackle debt burden: Report

Sri Lanka, on Wednesday (Feb 21) said that it exported $20 million worth of tea to Iran to partially pay its $251 million oil debt. The first instalment of the tea-for-oil deal was sent years after it was agreed upon in 2021.

Sri Lanka repays $20m Iranian oil debt with tea

The global debt pile has hit $313 trillion, driven by rising interest rates and government spending. This means higher borrowing costs for everyone, from businesses to countries, and it could have serious consequences.

Global debt soars to $313 tn, driven by rising borrowing costs

The federal cabinet approves a 67% increase in the natural gas tariff. The decision came into effect from Feb 1, apparently to meet the revenue requirement of the gas utilities targeted for the current year. The question remains does the new government have a plan to bring the economy back on track. To know more watch this interview Foreign Affairs expert, Adnan Qaiser.

Pakistan: Economic headache for new government

The federal cabinet approves a 67% increase in the natural gas tariff. The decision came into effect from Feb 1, apparently to meet the revenue requirement of the gas utilities targeted for the current year. The question remains does the new government have a plan to bring the economy back on track.

How bad is Pakistan's debt crisis and can the IMF save it?

The IMF has issued a warning of debt distress in Maldives. Male borrows heavily from Beijing. Is China trying to debt-trap yet another poor nation?

Gravitas | Is China trying to debt-trap Maldives?

Sri Lanka eyes $5 billion in foreign funds. Colombo expects to raise $5 billion in foreign funds over next two years. Sri Lanka anticipates injection of money after debt restructuring. Watch to know more!

Sri Lanka: Colombo expects to raise $5 billion in foreign funds over next two years

Hong Kong court ordered the liquidation of property giant China Evergrande Group. The decision to liquidate the world's most indebted developer was made by Hong Kong Justice Linda Chan. China's Evergrande has more than $300 billion in total liabilities

China's Evergrande ordered to liquidate after plan for $300B debt fails

In the fast-paced world of investing, safe havens often take a backseat for their perceived modest gains. However, if there's one asset that consistently outshines the rest, it's undoubtedly gold. Our next report delves into why gold remains an invaluable asset poised for continued growth in 2024.

Gold shines bright as Global Debt continues to soar

The head of President Joe Biden's Council of Economic advisors said U.S. Consumer debt is just about returning to normal levels. Jared Bernstein said that pressures on U.S. Consumer spending, such as growing credit card delinquency rates, mostly suggest that Americans' debt is returning to pre-pandemic levels.

U.S. Consumer debt returning to normal levels?

No big debt relief for government in 2023. Watch the video to know more.

2023 Rewind: Debt threat to countries

The International Monetary Fund (IMF) has issued a cautionary note, warning that India's general government debt could surpass 100 per cent of the gross domestic product (GDP) in the medium term, the Business Standard reported.&nbsp;

This alert, highlighted in the annual Article IV consultation report, emphasises the need for new financing sources, greater private sector investment, and climate-resilience measures. The IMF points out that substantial investment is required to enhance India's capacity to withstand climate stresses and natural disasters.&nbsp;

Government's Response and Disagreement &nbsp;

In response, the Indian government has asserted that sovereign debt risks are limited as it is primarily denominated in domestic currency. K.V. Subramanian, India's executive director at the IMF, challenged the IMF's claim, stating that despite historical shocks, India's public debt-to-GDP ratio has shown minimal fluctuations. The disagreement centres on the IMF's reclassification of India's exchange rate regime to a "stabilised arrangement".

IMF's Optimistic Outlook and Fiscal Consolidation&nbsp;

Despite the debt concerns, the IMF offers an optimistic outlook for India's economy in its Article IV report, projecting the potential for faster growth if key structural reforms are implemented. The report stresses the necessity for "ambitious" fiscal consolidation to curb public debt. It also outlines potential challenges, including global growth slowdown, commodity price volatility, and domestic weather shocks. The IMF underscored the impact of consumer demand and private investment on growth.&nbsp;

Steps to Tackle Public Debt&nbsp;

In October 2023, Finance Minister Nirmala Sitharaman revealed the government's commitment to exploring measures to reduce government debt. According to a report by Mint, the central government's debt, as of March 2023, stood at Rs 155.6 trillion, constituting 57.1 per cent of GDP. India faces challenges in enhancing credit ratings due to elevated debt levels and the heavy cost associated with servicing that debt. Despite being considered a 'bright spot' in the global economy, India grapples with challenges affecting sovereign investment ratings.&nbsp;

Challenges and the Rating Agencies' Perspective&nbsp;

The Economic Times reported that global rating agencies, including Fitch, S&amp;P, and Moody's, have accorded India the lowest investment-grade rating, citing concerns over weak fiscal performance, burdensome debt stock, and low GDP per capita. The 'K-shaped' growth phenomenon, exacerbated by the Covid-19 pandemic, has contributed to uneven income distribution, impacting India's sovereign rating. Experts contend that the quality of government expenditure improvement could positively influence economic growth.&nbsp;

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The International Monetary Fund (IMF) has issued a cautionary note, warning that India's general government debt could surpass 100 per cent of the gross domestic product (GDP) in the medium term, the Business Standard reported.

The International Monetary Fund (IMF) has issued a cautionary note, warning that India's general government debt could surpass 100 per cent of the gross domestic product (GDP) in the medium term, the Business Standard reported. This alert, highlighted in the annual Article IV consultation report, emphasises the need for new financing sources, greater private sector investment, and climate-resilience measures. The IMF points out that substantial investment is required to enhance India's capacity to withstand climate stresses and natural disasters. Government's Response and Disagreement In response, the Indian government has asserted that sovereign debt risks are limited as it is primarily denominated in domestic currency. K.V. Subramanian, India's executive director at the IMF, challenged the IMF's claim, stating that despite historical shocks, India's public debt-to-GDP ratio has shown minimal fluctuations. The disagreement centres on the IMF's reclassification of India's exchange rate regime to a "stabilised arrangement". IMF's Optimistic Outlook and Fiscal Consolidation Despite the debt concerns, the IMF offers an optimistic outlook for India's economy in its Article IV report, projecting the potential for faster growth if key structural reforms are implemented. The report stresses the necessity for "ambitious" fiscal consolidation to curb public debt. It also outlines potential challenges, including global growth slowdown, commodity price volatility, and domestic weather shocks. The IMF underscored the impact of consumer demand and private investment on growth. Steps to Tackle Public Debt In October 2023, Finance Minister Nirmala Sitharaman revealed the government's commitment to exploring measures to reduce government debt. According to a report by Mint, the central government's debt, as of March 2023, stood at Rs 155.6 trillion, constituting 57.1 per cent of GDP. India faces challenges in enhancing credit ratings due to elevated debt levels and the heavy cost associated with servicing that debt. Despite being considered a 'bright spot' in the global economy, India grapples with challenges affecting sovereign investment ratings. Challenges and the Rating Agencies' Perspective The Economic Times reported that global rating agencies, including Fitch, S&P, and Moody's, have accorded India the lowest investment-grade rating, citing concerns over weak fiscal performance, burdensome debt stock, and low GDP per capita. The 'K-shaped' growth phenomenon, exacerbated by the Covid-19 pandemic, has contributed to uneven income distribution, impacting India's sovereign rating. Experts contend that the quality of government expenditure improvement could positively influence economic growth. WATCH WION LIVE HERE

IMF sounds alarm on India's rising debt, warns of exceeding 100pc of GDP 

Beijing has intensified efforts to curb the unchecked growth of informal backchannel borrowing, known as hidden debt, which poses a risk to China's financial stability. However, despite these efforts, Ministry of Finance audits reveal that such hidden debt has continued to rise.

Hidden debt in China, off-the-books borrowing by local governments and state-owned enterprises, remains a major problem.&nbsp;

<h2>Naming and shaming misconduct</h2>

In a recent move, the Ministry of Finance has singled out local authorities and state banks across seven provinces and flagged eight cases of misconduct related to hidden debt, reported the South China Morning Post.

One case in Hubei province saw local authorities borrowing money from provincial-owned companies to fund construction projects, which contravenes national regulations.

<a href="https://www.wionews.com/world/first-italy-now-philippines-jumps-off-the-belt-and-road-bandwagon-is-xi-jinpings-bri-exploitative-655395">Also read |&nbsp;First Italy, now Philippines jumps off the Belt and Road bandwagon: Is Xi Jinping's BRI exploitative?</a>

This contributed to a hidden debt of 21.48 billion yuan&nbsp;(US$2.95 billion) from August 2018 to June 2021. In another case, the Shaanxi branch of the Agricultural Development Bank of China offered loans and related services to local governments in violation of rules and regulations, resulting in a hidden debt of 1.276 billion yuan (US$17.5 million)&nbsp;as of June 2021.

In response to the violations, the ministry fined the bank branch 500,000 yuan (US$69K) and reprimanded relevant employees. Finance authorities said that these eight cases reveal deviations in the performance of officials and units, citing weak discipline as a hindrance to debt-reduction efforts.

Also watch |&nbsp;IMF praises China's post-Covid rebound, applauds its economic resurgence

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To address the growing debt pressure facing local governments, the central government made significant changes to the national budget. China also plans to accelerate the issuance and use of government bonds to support the economy.

China aims to establish a long-term mechanism for managing local debt risks, optimising both central and local government debt structures. The Ministry of Finance remains committed to implementing a proactive fiscal policy, improving efficiency, and supporting local governments facing financial burdens&nbsp;due to natural disasters.&nbsp;

(With inputs from agencies)

&nbsp;

Beijing has intensified efforts to curb the unchecked growth of informal backchannel borrowing, known as hidden debt, which poses a risk to China's financial stability.

Beijing has intensified efforts to curb the unchecked growth of informal backchannel borrowing, known as hidden debt, which poses a risk to China's financial stability. However, despite these efforts, Ministry of Finance audits reveal that such hidden debt has continued to rise. Hidden debt in China, off-the-books borrowing by local governments and state-owned enterprises, remains a major problem. Naming and shaming misconduct In a recent move, the Ministry of Finance has singled out local authorities and state banks across seven provinces and flagged eight cases of misconduct related to hidden debt, reported the South China Morning Post. One case in Hubei province saw local authorities borrowing money from provincial-owned companies to fund construction projects, which contravenes national regulations. Also read | First Italy, now Philippines jumps off the Belt and Road bandwagon: Is Xi Jinping's BRI exploitative? This contributed to a hidden debt of 21.48 billion yuan (US$2.95 billion) from August 2018 to June 2021. In another case, the Shaanxi branch of the Agricultural Development Bank of China offered loans and related services to local governments in violation of rules and regulations, resulting in a hidden debt of 1.276 billion yuan (US$17.5 million) as of June 2021. In response to the violations, the ministry fined the bank branch 500,000 yuan (US$69K) and reprimanded relevant employees. Finance authorities said that these eight cases reveal deviations in the performance of officials and units, citing weak discipline as a hindrance to debt-reduction efforts. Also watch | IMF praises China's post-Covid rebound, applauds its economic resurgence To address the growing debt pressure facing local governments, the central government made significant changes to the national budget. China also plans to accelerate the issuance and use of government bonds to support the economy. China aims to establish a long-term mechanism for managing local debt risks, optimising both central and local government debt structures. The Ministry of Finance remains committed to implementing a proactive fiscal policy, improving efficiency, and supporting local governments facing financial burdens due to natural disasters. (With inputs from agencies)

China targets local governments, banks for hidden debt violations by naming and shaming them

The embattled flexible workspace provider, WeWork, is reportedly on the verge of filing for bankruptcy in the coming week, as per a Reuters reported. This revelation triggered a sharp decline in the company's stock, with shares plummeting 32 per cent in after-hours trading. In the last one year, its shares have slide by almost 96 per cent.

While the specific details of the bankruptcy filing remain undisclosed, reports suggest that WeWork is actively considering submitting a Chapter 11 petition in New Jersey, based on insider information cited by a Wall Street Journal report. &nbsp;

WeWork's financial turmoil has been brewing for some time, marked by its recent agreement with creditors to temporarily postpone payments on a portion of its substantial debt. This grace period is rapidly drawing to a close, increasing the pressure on the company.

At the heart of WeWork's financial difficulties lie its formidable long-term debt, which stood at $2.9 billion as of the end of June, and a staggering $13 billion tied up in long-term leases. These financial obligations have become increasingly burdensome as borrowing costs continue to rise, which in turn, has taken a toll on the entire commercial real estate sector.

In 2019, the company was privately valued at an astounding $47 billion. However, the company's plans to go public in the same year unravelled due to investor scepticism about its business model, which involved securing long-term leases and then renting them out for shorter periods, along with concerns about its financial losses. &nbsp;

WeWork eventually did go public in 2021 but at a much-reduced valuation. Throughout this time, WeWork's primary supporter, Japanese conglomerate SoftBank, continued to provide billions to the start-up, despite its ongoing financial struggles and losses.

In August, WeWork took the unprecedented step of casting "substantial doubt" on its ability to continue operations. Since then, the company's problems have only intensified, with several key executives, including CEO Sandeep Mathrani, departing this year.

(With inputs from Reuters)

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The embattled flexible workspace provider, WeWork, is reportedly on the verge of filing for bankruptcy in the coming week, as per a Reuters reported. This revelation triggered a sharp decline in the company's stock, with shares plummeting 32 per cent in after-hours trading.

The embattled flexible workspace provider, WeWork, is reportedly on the verge of filing for bankruptcy in the coming week, as per a Reuters reported. This revelation triggered a sharp decline in the company's stock, with shares plummeting 32 per cent in after-hours trading. In the last one year, its shares have slide by almost 96 per cent. While the specific details of the bankruptcy filing remain undisclosed, reports suggest that WeWork is actively considering submitting a Chapter 11 petition in New Jersey, based on insider information cited by a Wall Street Journal report. WeWork's financial turmoil has been brewing for some time, marked by its recent agreement with creditors to temporarily postpone payments on a portion of its substantial debt. This grace period is rapidly drawing to a close, increasing the pressure on the company. At the heart of WeWork's financial difficulties lie its formidable long-term debt, which stood at $2.9 billion as of the end of June, and a staggering $13 billion tied up in long-term leases. These financial obligations have become increasingly burdensome as borrowing costs continue to rise, which in turn, has taken a toll on the entire commercial real estate sector. In 2019, the company was privately valued at an astounding $47 billion. However, the company's plans to go public in the same year unravelled due to investor scepticism about its business model, which involved securing long-term leases and then renting them out for shorter periods, along with concerns about its financial losses. WeWork eventually did go public in 2021 but at a much-reduced valuation. Throughout this time, WeWork's primary supporter, Japanese conglomerate SoftBank, continued to provide billions to the start-up, despite its ongoing financial struggles and losses. In August, WeWork took the unprecedented step of casting "substantial doubt" on its ability to continue operations. Since then, the company's problems have only intensified, with several key executives, including CEO Sandeep Mathrani, departing this year. (With inputs from Reuters) WATCH WION LIVE HERE

WeWork nears bankruptcy amidst crushing debt and plummeting value

Brazilian retailers are grappling with a challenging landscape as they contend with mounting debt and increasing competition from online giants like Amazon. A complex combination of factors, including high debt levels for both retailers and consumers, rising yields, and a recent accounting scandal at Americanas SA, has created a challenging environment for the retail sector in Brazil, Bloomberg reported.&nbsp;

The retail industry in Brazil is already exhibiting cracks, with established retailers facing significant hurdles.

Casas Bahia, a well-known retail chain, had to issue equity at a substantial discount to manage its debt load. Similarly, Tok&amp;Stok, a furniture retailer, announced a debt restructuring of around 350 million reais and received a capital addition of 100 million reais after failing to meet some obligations. Other retailers, such as Magazine Luiza and C&amp;A Modas, have seen risk premiums on their local bonds increase.&nbsp;

Bloomberg quoted Thiago Macruz, retail analyst and head of Brazil equity research at Itau BBA SA, as saying, "We're talking about maybe the worst moment for Brazil retail since I started covering the sector a decade ago. It has been super-challenging for retailers, especially those that cater to lower-income customers."&nbsp;

Brazil's central bank has attempted to alleviate some of the pressure on borrowers by reducing interest rates, and further cuts are anticipated. However, it might not provide immediate relief to retailers who are burdened by debt.

Brazilian retailers had ramped up their debt levels prior to the pandemic, driven by falling interest rates and strong local demand for bonds. Retailers also extended credit to customers, expanding their in-house lending, often taking on the risks associated with defaults. In the near term, this facilitated revenue growth, but it is&nbsp;now raising concerns as customers face mounting debt levels.&nbsp;

Amidst these challenges, retailers are now scaling back on lending to consumers. Bloomberg quoted Alexandre Muller, a credit fund manager at JGP Asset Management, as saying, "Companies realised it's not a good business to deliver revenue growth at the expense of seeing a spike in bad loans. Otherwise, they're putting money in one pocket by stealing from the other."&nbsp;

Despite these pressures, some investors see opportunities in the retail sector, particularly in local notes of companies with tangible assets like Guararapes Confeccoes SA, which owns the fashion retailer Riachuelo. While traditional brick-and-mortar retailers struggle, the e-commerce landscape is also facing intense competition. Recent federal initiatives in Brazil have allowed online retailers to sell products up to $50 with full federal import tax exemption, further intensifying the competition.&nbsp;

While the retail sector continues to face headwinds, some investors believe that the worst may be over, with the potential for macroeconomic improvements and government programs aimed at easing the burden on indebted consumers.

(With inputs from Bloomberg)&nbsp;

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Brazilian retailers are grappling with a challenging landscape as they contend with mounting debt and increasing competition from online giants like Amazon. A complex combination of factors, including high debt levels for both retailers and consumers, rising yields, and a recent accounting scandal at Americanas SA, has created a challenging environment for the retail sector in Brazil, Bloomberg reported.

Brazilian retailers are grappling with a challenging landscape as they contend with mounting debt and increasing competition from online giants like Amazon. A complex combination of factors, including high debt levels for both retailers and consumers, rising yields, and a recent accounting scandal at Americanas SA, has created a challenging environment for the retail sector in Brazil, Bloomberg reported. The retail industry in Brazil is already exhibiting cracks, with established retailers facing significant hurdles. Casas Bahia, a well-known retail chain, had to issue equity at a substantial discount to manage its debt load. Similarly, Tok&Stok, a furniture retailer, announced a debt restructuring of around 350 million reais and received a capital addition of 100 million reais after failing to meet some obligations. Other retailers, such as Magazine Luiza and C&A Modas, have seen risk premiums on their local bonds increase. Bloomberg quoted Thiago Macruz, retail analyst and head of Brazil equity research at Itau BBA SA, as saying, "We're talking about maybe the worst moment for Brazil retail since I started covering the sector a decade ago. It has been super-challenging for retailers, especially those that cater to lower-income customers." Brazil's central bank has attempted to alleviate some of the pressure on borrowers by reducing interest rates, and further cuts are anticipated. However, it might not provide immediate relief to retailers who are burdened by debt. Brazilian retailers had ramped up their debt levels prior to the pandemic, driven by falling interest rates and strong local demand for bonds. Retailers also extended credit to customers, expanding their in-house lending, often taking on the risks associated with defaults. In the near term, this facilitated revenue growth, but it is now raising concerns as customers face mounting debt levels. Amidst these challenges, retailers are now scaling back on lending to consumers. Bloomberg quoted Alexandre Muller, a credit fund manager at JGP Asset Management, as saying, "Companies realised it's not a good business to deliver revenue growth at the expense of seeing a spike in bad loans. Otherwise, they're putting money in one pocket by stealing from the other." Despite these pressures, some investors see opportunities in the retail sector, particularly in local notes of companies with tangible assets like Guararapes Confeccoes SA, which owns the fashion retailer Riachuelo. While traditional brick-and-mortar retailers struggle, the e-commerce landscape is also facing intense competition. Recent federal initiatives in Brazil have allowed online retailers to sell products up to $50 with full federal import tax exemption, further intensifying the competition. While the retail sector continues to face headwinds, some investors believe that the worst may be over, with the potential for macroeconomic improvements and government programs aimed at easing the burden on indebted consumers. (With inputs from Bloomberg) WATCH WION LIVE HERE

Brazilian retail sector faces challenges amidst rising debt and online competition 

China's cabinet has restricted the ability of local governments in 12 heavily indebted regions to take on new debt and placed limits on what new state-funded projects they can launch, three sources with knowledge of the matter said.

The 12 regions, which cover a wide swathe of the nation, will only be allowed to take on specified projects, such as those approved by the central government, the sources said. Other projects, such new railway stations and power plants, will not be permitted.

The sources were citing a cabinet document dated late September that was delivered to local governments and state lenders this month.

The order also specifies that debt growth of local government financing vehicles (LGFVs) should not be higher than average loan growth rates of the corporate sector in the province where the LGFVs are located, two of the sources said.

The move by China's cabinet, or the State Council, to contain local government debt has not been previously reported.

The State Council did not reply to a Reuters' request for comment.

The measures reflect an effort by China's government to balance the need to defuse local government debt risks while pumping money into major infrastructure projects to stimulate the country's flagging economy.

In practice, that means increasing debt at the national level while attempting to lower debt at the local level. On Tuesday, China approved an additional 1 trillion yuan ($137 billion) sovereign bond issue to support the economy.

According to the new order from the State Council, local governments will only be permitted to take on debt to fund major projects approved by the state council as well as a few types of projects in key areas. Those projects include the redevelopment of urban neighbourhoods and building affordable housing, two of the sources said.

HIGH-RISK REGIONS

The 12 regions were previously identified as areas with "high risks" of defaulting on debt obligations. They were 7 provinces, including Liaoning and Jilin on the border with North Korea as well as Guizhou and Yunnan in the southwest, three autonomous regions and Tianjin and Chongqing cities.

Watch | China announces removal of Defence Minister Li Shang Fu without explanation

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Repayment of debt due this year and 2024 by the regions will be prioritised, and debt extensions and new bank loans to replace existing loans will be allowed, the document said, according to two of the sources.

All three sources declined to be identified as the policies were confidential.

Debt-laden municipalities represent a major risk to the world's second-largest economy and its financial stability, amid a deepening property crisis, years of over-investment in infrastructure and huge bills to contain the COVID-19 pandemic.

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The crash in property prices and a cash crunch have left developers in no shape to buy more land, traditionally a key source of local government revenue. Land sales in January-September were down almost 20 percent from the year-ago period.

Local government debt loads are far higher than at the central government level.

While central government debt is only 21% OF GDP, local debt reached 92 trillion yuan ($12.58 trillion), or 76% of the country's economic output in 2022, up from 62.2% in 2019. The massive piles of debt highlights local governments' financial stress, fuelling concerns of a systemic financial crisis.

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Part of that is debt issued by LGFVs, which cities use to raise money for infrastructure projects, often at the urging of the central government when it needs to boost economic growth.

China's Politburo, a top decision-making body of the ruling Communist Party, said in late July said it would announce a basket of measures to reduce local government debt risks, but no detailed plans have been officially unveiled yet.

China has told state-owned banks to roll over existing local government debt with longer-term loans at lower interest rates, Reuters reported last week.

In addition, a slew of local governments - mostly debt-ridden ones such as Yunnan and Guizhou - have started selling so-called refinancing bonds this month in a special, one-time programme to replace other forms of borrowing. The bond issuance is widely believed to be part of Beijing's measures to defuse debt risks of LGFVs.

China's cabinet has restricted the ability of local governments in 12 heavily indebted regions to take on new debt and placed limits on what new state-funded projects they can launch, three sources with knowledge of the matter said.

China's cabinet has restricted the ability of local governments in 12 heavily indebted regions to take on new debt and placed limits on what new state-funded projects they can launch, three sources with knowledge of the matter said. The 12 regions, which cover a wide swathe of the nation, will only be allowed to take on specified projects, such as those approved by the central government, the sources said. Other projects, such new railway stations and power plants, will not be permitted. The sources were citing a cabinet document dated late September that was delivered to local governments and state lenders this month. The order also specifies that debt growth of local government financing vehicles (LGFVs) should not be higher than average loan growth rates of the corporate sector in the province where the LGFVs are located, two of the sources said. The move by China's cabinet, or the State Council, to contain local government debt has not been previously reported. The State Council did not reply to a Reuters' request for comment. The measures reflect an effort by China's government to balance the need to defuse local government debt risks while pumping money into major infrastructure projects to stimulate the country's flagging economy. In practice, that means increasing debt at the national level while attempting to lower debt at the local level. On Tuesday, China approved an additional 1 trillion yuan ($137 billion) sovereign bond issue to support the economy. According to the new order from the State Council, local governments will only be permitted to take on debt to fund major projects approved by the state council as well as a few types of projects in key areas. Those projects include the redevelopment of urban neighbourhoods and building affordable housing, two of the sources said. HIGH-RISK REGIONS The 12 regions were previously identified as areas with "high risks" of defaulting on debt obligations. They were 7 provinces, including Liaoning and Jilin on the border with North Korea as well as Guizhou and Yunnan in the southwest, three autonomous regions and Tianjin and Chongqing cities. Watch | China announces removal of Defence Minister Li Shang Fu without explanation × Repayment of debt due this year and 2024 by the regions will be prioritised, and debt extensions and new bank loans to replace existing loans will be allowed, the document said, according to two of the sources. All three sources declined to be identified as the policies were confidential. Debt-laden municipalities represent a major risk to the world's second-largest economy and its financial stability, amid a deepening property crisis, years of over-investment in infrastructure and huge bills to contain the COVID-19 pandemic. Also Read | ‘Ready to cooperate,’ China’s Xi tells US ahead of key visit by Foreign Minister Wang Yi The crash in property prices and a cash crunch have left developers in no shape to buy more land, traditionally a key source of local government revenue. Land sales in January-September were down almost 20 percent from the year-ago period. Local government debt loads are far higher than at the central government level. While central government debt is only 21% OF GDP, local debt reached 92 trillion yuan ($12.58 trillion), or 76% of the country's economic output in 2022, up from 62.2% in 2019. The massive piles of debt highlights local governments' financial stress, fuelling concerns of a systemic financial crisis. Also Read | Albanese-Biden meet: Critical minerals, China and pacific infrastructure on agenda Part of that is debt issued by LGFVs, which cities use to raise money for infrastructure projects, often at the urging of the central government when it needs to boost economic growth. China's Politburo, a top decision-making body of the ruling Communist Party, said in late July said it would announce a basket of measures to reduce local government debt risks, but no detailed plans have been officially unveiled yet. China has told state-owned banks to roll over existing local government debt with longer-term loans at lower interest rates, Reuters reported last week. In addition, a slew of local governments - mostly debt-ridden ones such as Yunnan and Guizhou - have started selling so-called refinancing bonds this month in a special, one-time programme to replace other forms of borrowing. The bond issuance is widely believed to be part of Beijing's measures to defuse debt risks of LGFVs.

China's cabinet curbs debt growth, limits state-funded projects in 12 'high risk' regions

More debt defaults are looming in China, as troubled developers grapple with a weak outlook for home sales and continue to face challenges in raising funds. According to Creditsights, 124.5 billion dollars of bonds have already defaulted in the 175 billion property dollar bond sector, including China's once-leading developer, Country Garden. 60.5 billion dollars in Chinese property bonds are due in the next six months, with offshore bonds comprising a significant portion.

China: $124.5 BN of bonds have already defaulted

Troubled developers grapple with a weak outlook for home sales and continue to face challenges in raising funds.

China's property developers in crossfire

As China’s private developers struggle to meet their debt repayments, concerns are growing over the potential ripple effects on local-level government finances. Country Garden, the country's largest developer, has sounded the alarm, stating it may not be able to meet its offshore debt obligations.

Debt crisis in China's real estate sector

The Institute of International Finance (IIF) said on September 19 that markets like the United States and Japan were driving the hike in global debt, which reached a record high of $307 trillion in the second quarter of the year despite rising interest rates restricting bank credit, Moneycontrol reported.

According to a research by the trade association for financial services, the amount of global debt in dollars increased by $10 trillion in the first half of 2023 and by $100 trillion over the previous ten years.

It claimed that the most recent increase has increased the global debt-to-GDP ratio to 336 per cent for the second consecutive quarter. The debt ratio had been decreasing up until 2023 for seven quarters.

The research indicated that, the increase in debt ratio was caused by slower growth combined with a slowdown in price rises.

The IIF stated that “the sudden rise in inflation was the main factor behind the sharp decline in debt ratio over the past two years,” and that they anticipate the debt to output ratio to surpass 337 per cent by year's end due to wage and price pressures lessening, even if not to their targets.

With the United States, Japan, Britain, and France seeing the greatest rises, the developed world accounted for more than 80 per cent of the most recent debt accumulation. The biggest increases in developing markets were seen in the world's three biggest economies: China, India, and Brazil.

According to the analysis, China, Korea, and Thailand are mostly to blame for the fact that household debt-to-GDP in emerging markets is still higher than it was before COVID-19. However, in the first half of the year, the same ratio in mature markets fell to its lowest point in twenty years.

“Should inflationary pressures persist in mature markets, the health of household balance sheets, particularly in the U.S., would provide a cushion against further rate hikes,” Moneycontrol quoted the report.

The target rate of between 5.25 per cent and 5.5 per cent is now anticipated to stay in place until May of next year, according to the CME FedWatch tool, but markets are not currently pricing in a rate increase by the U.S. Federal Reserve in the near future.

Rates in the United States are anticipated to stay high for a considerable amount of time, which might put pressure on emerging countries as necessary investment is directed to the less-risky developed world.

At the conclusion of its meeting on Wednesday, the Federal Reserve is anticipated to hold rates steady but may hint that it is open to additional rate increases.

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The Institute of International Finance (IIF) said on September 19 that markets like the United States and Japan were driving the hike in global debt, which reached a record high of $307 trillion in the second quarter of the year despite rising interest rates restricting bank credit, Moneycontrol reported.

The Institute of International Finance (IIF) said on September 19 that markets like the United States and Japan were driving the hike in global debt, which reached a record high of $307 trillion in the second quarter of the year despite rising interest rates restricting bank credit, Moneycontrol reported. According to a research by the trade association for financial services, the amount of global debt in dollars increased by $10 trillion in the first half of 2023 and by $100 trillion over the previous ten years. It claimed that the most recent increase has increased the global debt-to-GDP ratio to 336 per cent for the second consecutive quarter. The debt ratio had been decreasing up until 2023 for seven quarters. The research indicated that, the increase in debt ratio was caused by slower growth combined with a slowdown in price rises. The IIF stated that “the sudden rise in inflation was the main factor behind the sharp decline in debt ratio over the past two years,” and that they anticipate the debt to output ratio to surpass 337 per cent by year's end due to wage and price pressures lessening, even if not to their targets. With the United States, Japan, Britain, and France seeing the greatest rises, the developed world accounted for more than 80 per cent of the most recent debt accumulation. The biggest increases in developing markets were seen in the world's three biggest economies: China, India, and Brazil. According to the analysis, China, Korea, and Thailand are mostly to blame for the fact that household debt-to-GDP in emerging markets is still higher than it was before COVID-19. However, in the first half of the year, the same ratio in mature markets fell to its lowest point in twenty years. “Should inflationary pressures persist in mature markets, the health of household balance sheets, particularly in the U.S., would provide a cushion against further rate hikes,” Moneycontrol quoted the report. The target rate of between 5.25 per cent and 5.5 per cent is now anticipated to stay in place until May of next year, according to the CME FedWatch tool, but markets are not currently pricing in a rate increase by the U.S. Federal Reserve in the near future. Rates in the United States are anticipated to stay high for a considerable amount of time, which might put pressure on emerging countries as necessary investment is directed to the less-risky developed world. At the conclusion of its meeting on Wednesday, the Federal Reserve is anticipated to hold rates steady but may hint that it is open to additional rate increases. WATCH WION LIVE HERE

Global debt reaches record high of $307 trillion, as debt ratios are rising: IIF

Global debt hit a record $307 trillion in the second quarter of the year despite rising interest rates curbing bank credit, with markets such as the United States and Japan driving the rise, the Institute of International Finance (IIF) said on Tuesday.

Global debt hits record $307 trillion, debt ratios climb

In a bid to assuage the concerns of lenders, Indian edtech giant Byjus has&nbsp;proposed&nbsp;to pay back its whole $1.2 billion term loan in less than six months, sources familiar with the matter told Bloomberg.&nbsp;

According to those&nbsp;sources, who requested anonymity, the corporation is willing to return $300 million of the distressed debt within three months if the amendment proposal is approved, and the remaining amount within the following three months. The sources added that the lenders are studying the idea and are looking for further information regarding how the payback will be funded.

For nearly a year, Byju’s and its lenders have been at odds while attempts to renegotiate the terms of their loan deal have fallen through. One of the largest term loans taken out by a startup in the world, the company decided to skip an interest payment, escalating the conflict that is the root of its growing hardship.

The five-year loan was raised by the company in 2021 to support its expansion outside of India; its parent company is officially known as Think &amp; Learn Pvt.

According to data gathered by Bloomberg, the loan is currently valued at 49.8 cents on the dollar. Generally, a rating below 70 is seen as distressed.

(With inputs from Bloomberg)

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In a bid to assuage the concerns of lenders, Indian edtech giant Byjus has proposed to pay back its whole $1.2 billion term loan in less than six months, sources familiar with the matter told Bloomberg.

In a bid to assuage the concerns of lenders, Indian edtech giant Byjus has proposed to pay back its whole $1.2 billion term loan in less than six months, sources familiar with the matter told Bloomberg. According to those sources, who requested anonymity, the corporation is willing to return $300 million of the distressed debt within three months if the amendment proposal is approved, and the remaining amount within the following three months. The sources added that the lenders are studying the idea and are looking for further information regarding how the payback will be funded. For nearly a year, Byju’s and its lenders have been at odds while attempts to renegotiate the terms of their loan deal have fallen through. One of the largest term loans taken out by a startup in the world, the company decided to skip an interest payment, escalating the conflict that is the root of its growing hardship. The five-year loan was raised by the company in 2021 to support its expansion outside of India; its parent company is officially known as Think & Learn Pvt. According to data gathered by Bloomberg, the loan is currently valued at 49.8 cents on the dollar. Generally, a rating below 70 is seen as distressed. (With inputs from Bloomberg) WATCH WION LIVE HERE

Byju’s surprises lenders with a $1.2 billion repayment offer

China’s property crisis has deepened with two major developers facing severe financial difficulties that threaten to send shock waves through the country’s economy and beyond.

China: Property crisis deepens with developer Country Garden at risk of default

China plans to allow local governments to sell $205.9 billion of special financing bonds to help 12 regions repay debt, Caixin reported. China’s central bank and financial regulators met with bank executives and told lenders again to boost loans to support a recovery, adding to signs of heightened concern from policymakers about the deteriorating economic outlook.

China local governments to sell $206 billion of financing debt

China is in discussion to allow local governments to sell 1.5 trillion yuan ($295.9 billion) of special financing bonds to help with debt repayment for 12 regions, according to a report by Caixin.

The regions involved, including Tianjin, Guizhou, Yunnan, Shaanxi, and Chongqing, are under increased pressure to pay off local government debt. Caixin published a report on Saturday without citing the source of the data.

According to the report, the Chinese central bank may establish a special purpose unit alongside banks to offer long-term, low-cost liquidity to local government finance units. According to the statement, the anticipated actions should assist local government financial vehicles (LGFVs) in lowering liquidity risks.

China requests more loans and the reduction of debt risk as its problems worsen.&nbsp;

One of the biggest dangers to the stability of the Chinese economy and its financial system is the debt of LGFVs and other off-balance sheet issuers. The problem has previously been referred to as one of China's “major economic and financial risks” by President Xi Jinping.

As another indication of how authorities were attempting to address financial threats, the government started a round of nationwide inspections to determine how much money local governments owed, according to a June article by Bloomberg News.

China’s top decision-making body, the Politburo of the ruling Communist Party, announced in July that it will take a series of steps to address local government debt.

(With inputs from agencies)

&nbsp;

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China is in discussion to allow local governments to sell 1.5 trillion yuan ($295.9 billion) of special financing bonds to help with debt repayment for 12 regions, according to a report by Caixin.

China is in discussion to allow local governments to sell 1.5 trillion yuan ($295.9 billion) of special financing bonds to help with debt repayment for 12 regions, according to a report by Caixin. The regions involved, including Tianjin, Guizhou, Yunnan, Shaanxi, and Chongqing, are under increased pressure to pay off local government debt. Caixin published a report on Saturday without citing the source of the data. According to the report, the Chinese central bank may establish a special purpose unit alongside banks to offer long-term, low-cost liquidity to local government finance units. According to the statement, the anticipated actions should assist local government financial vehicles (LGFVs) in lowering liquidity risks. China requests more loans and the reduction of debt risk as its problems worsen. One of the biggest dangers to the stability of the Chinese economy and its financial system is the debt of LGFVs and other off-balance sheet issuers. The problem has previously been referred to as one of China's “major economic and financial risks” by President Xi Jinping. As another indication of how authorities were attempting to address financial threats, the government started a round of nationwide inspections to determine how much money local governments owed, according to a June article by Bloomberg News. China’s top decision-making body, the Politburo of the ruling Communist Party, announced in July that it will take a series of steps to address local government debt. (With inputs from agencies) WATCH WION LIVE HERE

China’s local governments will sell $206 billion to repay financing debt 

The UK's public debt load has soared by more than 40% to almost £2.6 trillion (US$3.4 trillion or RM15.8 trillion)) since the pandemic struck, leaving the country owing more than its entire annual economic output for the first time since 1961.

UK faces reckoning over US $3 trillion debt pile

The relationship between China and Sri Lanka has been going strong as Beijing seeks to increase its footprint in the Indian Ocean region in Sri Lanka.

China pledges help for Sri Lanka's debt crisis

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