In the latest episode of its seven-year debt crisis, Greece on Monday agreed to compromise on new bailout reforms in a bid to break a deadlock between its eurozone and IMF creditors.

Europe and the Washington-based International Monetary Fund have been at loggerheads for months over whether Greece can meet budget targets, sparking fears of a new &quot;Grexit&quot; crisis.&nbsp;

Here are the main points in Greece&#39;s financial troubles:

A year-and-a-half after the 2008 banking crisis, the Greek public deficit is revised sharply upwards to 15 per cent, causing Greek debt ratings to worsen. In April 2010, the country is excluded from capital markets and in danger of defaulting.

The term &quot;Grexit&quot; begins to circulate. Faced with the risk of the euro collapsing, the eurozone club of 19 countries resolves to help Greece by accepting the participation of the IMF in the rescue plan.

In May 2010, Greece becomes the first country in the eurozone to receive an international aid loan, of 110 billion euros, at the price of strict austerity. Athens is shaken by violent demonstrations.

In 2011, the country&#39;s economic situation deteriorates, debt continues to swell and recession sets in.&nbsp;

In 2012, the eurozone and the IMF grant a second loan of 130 billion euros, and the debt of banks and insurance companies is restructured in the spring: 107 billion euros out of 206 are erased.

The demonstrations continue. The country is plunged into the deepest depression of its recent history.

A coalition of right-wingers and socialists is formed in June 2012. In the face of calls for more austerity from its creditors, especially from Germany, the Greek government tries to resist.

Poul Thomsen, then the IMF representative in Greece, confesses in 2012 to &quot;errors&quot; in the two bailouts.

An IMF report in 2013 says the impact of austerity on rising unemployment and falling consumption has been underestimated. A restructuring of public debt is the suggested solution, but the eurozone, especially Germany, does not want to hear about it.

In April 2014, Greece is able to tap into the markets briefly and successfully.

But in early 2015, leftist Prime Minister Alexis Tsipras comes to power on an anti-austerity platform.

After months of harsh discussions, creditors threaten to cut off loans and the country misses a payment deadline to the IMF at the end of June.

Despite a referendum in early July confirming Greek opposition to the demands of creditors, Tsipras signs a third loan of 86 billion euros over three years.

The IMF is reluctant to participate. Athens must accept new cuts in public spending, tax increases and social security reforms.

In May 2016, the first review of the third loan gets the green light from Brussels against the backdrop of a slightly improving Greek economy, but negotiations over the second review run into disagreements between European and IMF experts.&nbsp;

An IMF report in January 2017 warns that Greece&#39;s debt &quot;is highly unsustainable&quot; and &quot;will become explosive in the long run&quot; without significant debt relief, which Europe is reluctant to provide.

The IMF disputes that Greece can reach the positive targets forecast by Europe without further reforms, leaving Athens caught between its creditors.

&quot;People have learnt to live on autopilot,&quot; says Christos Tsougaris, a renewable energy entrepreneur in Athens.A meeting in Brussels on Monday appears to show progress towards ending the standoff.

Greek Finance Minister Euclid Tsakalotos approves reforms that will be automatically triggered if Athens fails to meet budget targets, according to European sources.

Officials representing the lenders are due to return to Athens shortly for talks on new measures.

(AFP)

Europe and the?IMF have been at loggerheads for months over whether Greece can meet budget targets, sparking fears of a new 'Grexit'?crisis

In the latest episode of its seven-year debt crisis, Greece on Monday agreed to compromise on new bailout reforms in a bid to break a deadlock between its eurozone and IMF creditors. Europe and the Washington-based International Monetary Fund have been at loggerheads for months over whether Greece can meet budget targets, sparking fears of a new "Grexit" crisis. Here are the main points in Greece's financial troubles: A year-and-a-half after the 2008 banking crisis, the Greek public deficit is revised sharply upwards to 15 per cent, causing Greek debt ratings to worsen. In April 2010, the country is excluded from capital markets and in danger of defaulting. The term "Grexit" begins to circulate. Faced with the risk of the euro collapsing, the eurozone club of 19 countries resolves to help Greece by accepting the participation of the IMF in the rescue plan. In May 2010, Greece becomes the first country in the eurozone to receive an international aid loan, of 110 billion euros, at the price of strict austerity. Athens is shaken by violent demonstrations. In 2011, the country's economic situation deteriorates, debt continues to swell and recession sets in. In 2012, the eurozone and the IMF grant a second loan of 130 billion euros, and the debt of banks and insurance companies is restructured in the spring: 107 billion euros out of 206 are erased. The demonstrations continue. The country is plunged into the deepest depression of its recent history. A coalition of right-wingers and socialists is formed in June 2012. In the face of calls for more austerity from its creditors, especially from Germany, the Greek government tries to resist. Poul Thomsen, then the IMF representative in Greece, confesses in 2012 to "errors" in the two bailouts. An IMF report in 2013 says the impact of austerity on rising unemployment and falling consumption has been underestimated. A restructuring of public debt is the suggested solution, but the eurozone, especially Germany, does not want to hear about it. In April 2014, Greece is able to tap into the markets briefly and successfully. But in early 2015, leftist Prime Minister Alexis Tsipras comes to power on an anti-austerity platform. After months of harsh discussions, creditors threaten to cut off loans and the country misses a payment deadline to the IMF at the end of June. Despite a referendum in early July confirming Greek opposition to the demands of creditors, Tsipras signs a third loan of 86 billion euros over three years. The IMF is reluctant to participate. Athens must accept new cuts in public spending, tax increases and social security reforms. In May 2016, the first review of the third loan gets the green light from Brussels against the backdrop of a slightly improving Greek economy, but negotiations over the second review run into disagreements between European and IMF experts. An IMF report in January 2017 warns that Greece's debt "is highly unsustainable" and "will become explosive in the long run" without significant debt relief, which Europe is reluctant to provide. The IMF disputes that Greece can reach the positive targets forecast by Europe without further reforms, leaving Athens caught between its creditors. "People have learnt to live on autopilot," says Christos Tsougaris, a renewable energy entrepreneur in Athens.A meeting in Brussels on Monday appears to show progress towards ending the standoff. Greek Finance Minister Euclid Tsakalotos approves reforms that will be automatically triggered if Athens fails to meet budget targets, according to European sources. Officials representing the lenders are due to return to Athens shortly for talks on new measures. (AFP)

Greece debt crisis: 7 years old and not over

Countries with higher public debt levels like India should continue to implement their medium-term plans to reduce debt and deficits, an IMF official has said.

&quot;Countries with higher public debt levels, like India, should continue to implement their medium-term plans to reduce debt and deficits. Japan and Malaysia should develop plans in these areas,&quot; IMF deputy managing director Zhang Tao said in his address at the Asian Financial Forum, Hong Kong.

&quot;Asia continues to lead global growth. We expect the economies in the region to grow above 5 per cent both in 2017 and 2018, compared with around three-and-a-half per cent for the world in the next two years,&quot; an IMF statement quoted Tao as saying.

Noting that Asia overall managed well the market surprises in 2016, and Asian financial markets were resilient for most of the year, Tao said Asia is expected to continue to make the largest contribution to growth in the world, by generating around two thirds of global growth.

Yesterday, IMF cut India&#39;s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the &quot;temporary negative consumption shock&quot; of demonetisation, days after the World Bank also decelerated India&#39;s growth estimates.&nbsp;

(PTI)

The IMF official said that countries like India with higher public debt should continue with their plans to reduce debt and deficits

Countries with higher public debt levels like India should continue to implement their medium-term plans to reduce debt and deficits, an IMF official has said. "Countries with higher public debt levels, like India, should continue to implement their medium-term plans to reduce debt and deficits. Japan and Malaysia should develop plans in these areas," IMF deputy managing director Zhang Tao said in his address at the Asian Financial Forum, Hong Kong. "Asia continues to lead global growth. We expect the economies in the region to grow above 5 per cent both in 2017 and 2018, compared with around three-and-a-half per cent for the world in the next two years," an IMF statement quoted Tao as saying. Noting that Asia overall managed well the market surprises in 2016, and Asian financial markets were resilient for most of the year, Tao said Asia is expected to continue to make the largest contribution to growth in the world, by generating around two thirds of global growth. Yesterday, IMF cut India's growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the "temporary negative consumption shock" of demonetisation, days after the World Bank also decelerated India's growth estimates. (PTI)

Countries with higher public debt levels should bring it down, says IMF deputy managing director

The IMF has cut India&#39;s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the &quot;temporary negative consumption shock&quot; of demonetisation, days after the World Bank also decelerated India&#39;s growth estimates.

&quot;In India, the growth forecast for the current (2016-17) and next fiscal year were trimmed by one percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative,&quot; the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) update released today.

Despite IMF&#39;s downward revision of India&#39;s growth rate and a slight upward revision of China&#39;s growth projections, India continues to be the fastest-growing country among emerging economies. In 2016, China with 6.7 per cent edged past India (6.6) by 0.1 percentage point. In 2018, China&#39;s growth rate is projected to be 6 per cent against India&#39;s 7.7 per cent.

The growth forecast for 2017 was revised up for China (to 6.5 per cent, 0.3 percentage point above the October forecast) on expectations of continued policy support, the IMF said. India&#39;s growth rate in 2017 as per the latest IMG projections is 7.2 per cent.

The IMF said that after a lacklustre out turn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies. In 2018, China&#39;s growth rate is projected to be 6 per cent against India&#39;s 7.7 per cent.

The global growth for 2016 is now estimated at 3.1 per cent, in line with the October 2016 forecast. Economic activity in both advanced economies and emerging market and developing economies (EMDEs) is forecast to accelerate in 2017-18, with global growth projected to be 3.4 per cent and 3.6 per cent, respectively, again unchanged from the October forecasts, it said. As per new IMF projections, India&#39;s growth in 2016 is now estimated to be 6.6 per cent as against 7.6 per cent earlier forecast.

In 2017, IMF has projected a growth rate of 7.2 per cent as against its previous forecast of 7.6 per cent.The Indian economy is likely to revive to go back to its previously estimated growth rate of 7.7 per cent in 2018, according to the WEO update.

The cut in India&#39;s growth rates comes days after the World Bank decelerated India&#39;s GDP growth for 2016-17 fiscal to 7 per cent from its previous estimate of 7.6 per cent citing the impact of demonetisation. But forecast issued on January 11 said that India would regain momentum in the following years with a growth of 7.6 per cent and 7.8 per cent due to a reform initiatives.

(PTI)

The reason given was the 'temporary negative consumption shock' of demonetisation

The IMF has cut India's growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the "temporary negative consumption shock" of demonetisation, days after the World Bank also decelerated India's growth estimates. "In India, the growth forecast for the current (2016-17) and next fiscal year were trimmed by one percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative," the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) update released today. Despite IMF's downward revision of India's growth rate and a slight upward revision of China's growth projections, India continues to be the fastest-growing country among emerging economies. In 2016, China with 6.7 per cent edged past India (6.6) by 0.1 percentage point. In 2018, China's growth rate is projected to be 6 per cent against India's 7.7 per cent. The growth forecast for 2017 was revised up for China (to 6.5 per cent, 0.3 percentage point above the October forecast) on expectations of continued policy support, the IMF said. India's growth rate in 2017 as per the latest IMG projections is 7.2 per cent. The IMF said that after a lacklustre out turn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies. In 2018, China's growth rate is projected to be 6 per cent against India's 7.7 per cent. The global growth for 2016 is now estimated at 3.1 per cent, in line with the October 2016 forecast. Economic activity in both advanced economies and emerging market and developing economies (EMDEs) is forecast to accelerate in 2017-18, with global growth projected to be 3.4 per cent and 3.6 per cent, respectively, again unchanged from the October forecasts, it said. As per new IMF projections, India's growth in 2016 is now estimated to be 6.6 per cent as against 7.6 per cent earlier forecast. In 2017, IMF has projected a growth rate of 7.2 per cent as against its previous forecast of 7.6 per cent.The Indian economy is likely to revive to go back to its previously estimated growth rate of 7.7 per cent in 2018, according to the WEO update. The cut in India's growth rates comes days after the World Bank decelerated India's GDP growth for 2016-17 fiscal to 7 per cent from its previous estimate of 7.6 per cent citing the impact of demonetisation. But forecast issued on January 11 said that India would regain momentum in the following years with a growth of 7.6 per cent and 7.8 per cent due to a reform initiatives. (PTI)

Demonetisation: IMF cuts India's growth forecast from 7.6 to 6.6%

French judges found IMF chief Christine Lagarde guilty of negligence on Monday for failing to challenge a state arbitration payout to a business tycoon in 2008 when she was French finance minister, but they did not punish her.

&quot;The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account,&quot; said Martine Ract Madoux, the main judge, in explaining the absence of any sentence.

She also cited Lagarde&#39;s good reputation and international standing as reasons why the court did not hand down a punishment in a case that could have carried a sentence of up to a year in prison.

In their ruling, the judges did not see negligence in Lagarde&#39;s decision to seek an out-of-court settlement with businessman Bernard Tapie, but they said her failure to contest the award to him of 400 million euros ($417 million) was negligent, and led to a misuse of public funds.

Lagarde&#39;s lawyer said immediately after the ruling that his team would look into appealing the decision.

The ruling risks triggering a new leadership crisis at the International Monetary Fund after Lagarde&#39;s predecessor Dominique Strauss Khan resigned in 2011 over a sex assault scandal.

The Washington-based institution&#39;s executive board was expected to meet shortly to consider the implications of the verdict, IMF spokesman Gerry Rice said.

(Reuters)

'The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account,' the main judge said

French judges found IMF chief Christine Lagarde guilty of negligence on Monday for failing to challenge a state arbitration payout to a business tycoon in 2008 when she was French finance minister, but they did not punish her. "The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account," said Martine Ract Madoux, the main judge, in explaining the absence of any sentence. She also cited Lagarde's good reputation and international standing as reasons why the court did not hand down a punishment in a case that could have carried a sentence of up to a year in prison. In their ruling, the judges did not see negligence in Lagarde's decision to seek an out-of-court settlement with businessman Bernard Tapie, but they said her failure to contest the award to him of 400 million euros ($417 million) was negligent, and led to a misuse of public funds. Lagarde's lawyer said immediately after the ruling that his team would look into appealing the decision. The ruling risks triggering a new leadership crisis at the International Monetary Fund after Lagarde's predecessor Dominique Strauss Khan resigned in 2011 over a sex assault scandal. The Washington-based institution's executive board was expected to meet shortly to consider the implications of the verdict, IMF spokesman Gerry Rice said. (Reuters)

IMF's Lagarde found guilty, but not punished, in French negligence trial

International Monetary Fund chief Christine Lagarde goes on trial Monday over a &euro;405 million state payout to a flamboyant tycoon wile she was French finance minister, news agency AFP reports.

If found guilty, Lagarde could receive a one-year prison sentence and a 15,000 Euro ($15,900) fine.

Lagarde denies the charges of &ldquo;negligence&rdquo;. She argues that she was acting &ldquo;in the state&rsquo;s interest&rdquo; in making the payment to Bernard Tapie, a close associate of Nicolas Sarkozy, who was then president.

The case threatens to dent the IMF&#39;s credibility -- Lagarde is the third IMF chief to face trial.

Her predecessor, Dominique Strauss-Kahn, was forced to resign after being accused of sexually assaulting a maid in 2011.

The IMF board has backed Ms Lagarde since France began legal proceedings over the payout in 2011.&nbsp;

She will be tried by the Court of Justice of the Republic, a tribunal that hears cases against ministers accused of wrongdoing in the discharge of their duties, AFP reports.

The accusations stem from Lagarde&#39;s handling of a dispute with Tapie, who claimed a state bank had defrauded him when he sold Adidas in 1993 to a group of investors. After a year, Adidas was sold for more than double the amount he was paid, The Telegraph UK reports.&nbsp;

Initially, the state resisted his claims but when Lagarde became finance minister in 2007, she ordered that Tapie&#39;s long-running battle with the state be resolved by arbitration, AFP said in its report.&nbsp;

In 2008, Tapie was awarded compensation of 404 million euros ($427 million).

Investigators suspect the arbitration process was rigged in favour of Tapie, who had supported Sarkozy during his election campaign in 2007.

Although she is not accused of personally profiting from the payment, Lagarde has been criticised for failing to challenge the award.

She maintains the case is &ldquo;politically motivated&rdquo;.

(WION with inputs from AFP) 
&nbsp;

If found guilty, Lagarde could receive a one-year prison sentence and a Euro 15,000 fine

International Monetary Fund chief Christine Lagarde goes on trial Monday over a €405 million state payout to a flamboyant tycoon wile she was French finance minister, news agency AFP reports. If found guilty, Lagarde could receive a one-year prison sentence and a 15,000 Euro ($15,900) fine. Lagarde denies the charges of “negligence”. She argues that she was acting “in the state’s interest” in making the payment to Bernard Tapie, a close associate of Nicolas Sarkozy, who was then president. The case threatens to dent the IMF's credibility -- Lagarde is the third IMF chief to face trial. Her predecessor, Dominique Strauss-Kahn, was forced to resign after being accused of sexually assaulting a maid in 2011. The IMF board has backed Ms Lagarde since France began legal proceedings over the payout in 2011. She will be tried by the Court of Justice of the Republic, a tribunal that hears cases against ministers accused of wrongdoing in the discharge of their duties, AFP reports. The accusations stem from Lagarde's handling of a dispute with Tapie, who claimed a state bank had defrauded him when he sold Adidas in 1993 to a group of investors. After a year, Adidas was sold for more than double the amount he was paid, The Telegraph UK reports. Initially, the state resisted his claims but when Lagarde became finance minister in 2007, she ordered that Tapie's long-running battle with the state be resolved by arbitration, AFP said in its report. In 2008, Tapie was awarded compensation of 404 million euros ($427 million). Investigators suspect the arbitration process was rigged in favour of Tapie, who had supported Sarkozy during his election campaign in 2007. Although she is not accused of personally profiting from the payment, Lagarde has been criticised for failing to challenge the award. She maintains the case is “politically motivated”. (WION with inputs from AFP)

IMF chief Lagarde on trial in France over tycoon case

The International Monetary Fund on Friday approved a three-year, $12 billion loan for Egypt to help the country recover from its economic crisis amid soaring inflation and deficits.

The IMF executive board said it would release $2.75 billion to Egypt immediately, while further disbursements will depend on the country&#39;s economic performance and agreed milestones in implementing the reforms.

The program &quot;will help Egypt restore macroeconomic stability and promote inclusive growth,&quot; the board said in a statement.

&quot;Policies supported by the program aim to correct external imbalances and restore competitiveness, place the budget deficit and public debt on a declining path, boost growth and create jobs while protecting vulnerable groups.&quot;

The move comes after Cairo took crucial preliminary reform steps in recent weeks to meet IMF requirements, including cutting fuel subsidies and floating the Egyptian pound, which subsequently lost 45 percent of its value against the US dollar.

Egypt is reeling after six years of political and economic turmoil involving the ousters of two presidents. Police had to put down some small protests Friday against rising prices, and analysts warn the government will continue to face challenges.

Cairo governments had avoided implementing the economic reforms for years fearing unrest, but President Abdel Fattah al-Sisi said Egypt no longer has the luxury of postponing them.

The IMF said Egypt&#39;s economic program will be subject to five reviews over the life of the loan. The reviews are traditionally held every quarter, after which another tranche of the loan is released.

The IMF last month forecast the country&#39;s economy will grow 3.8 percent this year and 4 percent next year, but inflation is approaching 14 percent and was expected to surge above 17 percent in 2017. This is amid a budget deficit of 12 percent.

The loan approval came hours after Standard and Poor&#39;s announced it was upgrading the outlook on Egyptian sovereign debt to stable from negative, while keeping the rating at B-.

&quot;A more competitive exchange rate could benefit Egypt&#39;s export of goods and services, particularly the depressed tourism sector, if the security environment stabilizes further,&quot; S&amp;P said.

The Egyptian central bank&#39;s move last week to sharply increase the key interest rates was aimed at to containing further inflation pressures, the ratings agency said.

However, S&amp;P cautioned that floating the currency will increase inflation in the short term and &quot;subsidy cuts on top of recent interest rate hikes will weigh on domestic consumption and may raise social tensions.&quot;

The IMF is fully aware of the potential for unrest, and has said repeatedly that social protection measures in the Egypt loan deal &quot;are a cornerstone of the program, not an add-on or afterthought,&quot; and include providing for increases in food subsidies even while advocating budget cuts.

&quot;Even if the IMF has changed and is no longer imposing the same austerity measures, the reality in the ground is that it&#39;s a very difficult agreement to implement,&quot; Bessma Momani, expert on the Arab world at the Centre for International Governance Innovation, told AFP.

Loans from Saudi Arabia and China will help Egypt gather the $5-$6 billion in additional financing required to complement the IMF loan.

&nbsp;

(AFP)

The programme 'will help Egypt restore macroeconomic stability and promote inclusive growth,' IMF's executive board said

The International Monetary Fund on Friday approved a three-year, $12 billion loan for Egypt to help the country recover from its economic crisis amid soaring inflation and deficits. The IMF executive board said it would release $2.75 billion to Egypt immediately, while further disbursements will depend on the country's economic performance and agreed milestones in implementing the reforms. The program "will help Egypt restore macroeconomic stability and promote inclusive growth," the board said in a statement. "Policies supported by the program aim to correct external imbalances and restore competitiveness, place the budget deficit and public debt on a declining path, boost growth and create jobs while protecting vulnerable groups." The move comes after Cairo took crucial preliminary reform steps in recent weeks to meet IMF requirements, including cutting fuel subsidies and floating the Egyptian pound, which subsequently lost 45 percent of its value against the US dollar. Egypt is reeling after six years of political and economic turmoil involving the ousters of two presidents. Police had to put down some small protests Friday against rising prices, and analysts warn the government will continue to face challenges. Cairo governments had avoided implementing the economic reforms for years fearing unrest, but President Abdel Fattah al-Sisi said Egypt no longer has the luxury of postponing them. The IMF said Egypt's economic program will be subject to five reviews over the life of the loan. The reviews are traditionally held every quarter, after which another tranche of the loan is released. The IMF last month forecast the country's economy will grow 3.8 percent this year and 4 percent next year, but inflation is approaching 14 percent and was expected to surge above 17 percent in 2017. This is amid a budget deficit of 12 percent. The loan approval came hours after Standard and Poor's announced it was upgrading the outlook on Egyptian sovereign debt to stable from negative, while keeping the rating at B-. "A more competitive exchange rate could benefit Egypt's export of goods and services, particularly the depressed tourism sector, if the security environment stabilizes further," S&P said. The Egyptian central bank's move last week to sharply increase the key interest rates was aimed at to containing further inflation pressures, the ratings agency said. However, S&P cautioned that floating the currency will increase inflation in the short term and "subsidy cuts on top of recent interest rate hikes will weigh on domestic consumption and may raise social tensions." The IMF is fully aware of the potential for unrest, and has said repeatedly that social protection measures in the Egypt loan deal "are a cornerstone of the program, not an add-on or afterthought," and include providing for increases in food subsidies even while advocating budget cuts. "Even if the IMF has changed and is no longer imposing the same austerity measures, the reality in the ground is that it's a very difficult agreement to implement," Bessma Momani, expert on the Arab world at the Centre for International Governance Innovation, told AFP. Loans from Saudi Arabia and China will help Egypt gather the $5-$6 billion in additional financing required to complement the IMF loan. (AFP)

IMF approves $12 bn loan to support Egypt's economy

At the annual fall meeting of the International Monetary Fund and the World Bank, Indian finance minister Arun Jaitley warned about the risks of low and negative interest rates and &quot;significant loan impairments&quot; in the banking system to the global financial stability.

In an effort to guard against these risks, Jaitley said policy frameworks will need to be strengthened. He advocated &quot;deleveraging&quot; balance sheets and accumulating buffers to spur growth.&nbsp;

&quot;Gains from product and labour market reforms and strengthening of risk management practices to address balance sheet vulnerabilities would be helpful in further enhancing resilience,&quot; he said.

The minister said prolonged accommodative monetary policies in advanced economies will have serious implications for the emerging market and developing economies (EMDEs), including spillovers.&nbsp;

Voicing concerns that normalisation of the US monetary policy could have adverse effects globally, he said the central banks in major advanced economies should be mindful of financial stability risks arising out of monetary policy normalisation.

&quot;However, risks to global financial stability persist because of low and negative interest rates, the&nbsp;overhang of private debt and significant loan impairments in the banking system,&quot; he said.

Jaitley said though the global financial stability appeared to have improved with easing financing conditions, he warned that the risks to global stability would have deeper implications for the IMF and the World Bank too. In all likelihood, the bodies could be pressed with larger demands on their resources.&nbsp;

Both the global financial institutions need to be adequately resourced, specifically to meet a wider canvas of development aspirations arising out of the Sustainable Development Goals, he said.&nbsp;

(WION with inputs from PTI) 
&nbsp;

Indian finance minister said accommodative monetary policies in advanced economies could adversely affect emerging market

At the annual fall meeting of the International Monetary Fund and the World Bank, Indian finance minister Arun Jaitley warned about the risks of low and negative interest rates and "significant loan impairments" in the banking system to the global financial stability. In an effort to guard against these risks, Jaitley said policy frameworks will need to be strengthened. He advocated "deleveraging" balance sheets and accumulating buffers to spur growth. "Gains from product and labour market reforms and strengthening of risk management practices to address balance sheet vulnerabilities would be helpful in further enhancing resilience," he said. The minister said prolonged accommodative monetary policies in advanced economies will have serious implications for the emerging market and developing economies (EMDEs), including spillovers. Voicing concerns that normalisation of the US monetary policy could have adverse effects globally, he said the central banks in major advanced economies should be mindful of financial stability risks arising out of monetary policy normalisation. "However, risks to global financial stability persist because of low and negative interest rates, the overhang of private debt and significant loan impairments in the banking system," he said. Jaitley said though the global financial stability appeared to have improved with easing financing conditions, he warned that the risks to global stability would have deeper implications for the IMF and the World Bank too. In all likelihood, the bodies could be pressed with larger demands on their resources. Both the global financial institutions need to be adequately resourced, specifically to meet a wider canvas of development aspirations arising out of the Sustainable Development Goals, he said. (WION with inputs from PTI)

India warns against risks of low, negative interest rates on global economy

The International Monetary Fund will not join the Greek bailout programme but will likely accept a special advisory status with limited powers that keeps it at the table, two senior sources with direct knowledge of the proposals said.

The IMF has been holding out for more than a year over the terms under which it would participate in any new program, arguing that the financial targets set in the European bailout are unrealistic without major debt relief.&nbsp;

But the Fund is increasingly resigned to European resistance to debt relief for Greece and it is now in talks to accept a newly created role that would let it play a part with limited formality, the sources said.&nbsp;

&quot;It will be more than an advisor but the role will not have the strict conditionality, like the compliance and economic health checks every three months,&quot; one of the sources told Reuters.&nbsp;

Talks between Greece, its European creditors and the IMF have been at an impasse since German finance minister Wolfgang Schaeuble insisted on the IMF taking part but rejected calls from IMF Managing Director Christine Lagarde for a big debt restructuring.

&quot;This way Lagarde can go to the board and say, hey, &#39;I&#39;m not violating our rules&#39;&nbsp;and Schaeuble, whose government is facing an election next fall, can say, &#39;see, I have the IMF on board`&quot; the source said.&nbsp;

The exact nature of the IMF`s role has not been decided but it would have more powers than a simple advisor and would&nbsp;for example, be responsible for drawing up certain proposed agreements and negotiating documents, coordinating with the Greek and European Union sides.&quot;

They won&#39;t put money into the programme but it won&#39;t be just technical assistance; they will probably take a special advisory role to be created especially for the Greek bailout,&quot; the second source said.&nbsp;

&quot;Talks this week just made it clear that the IMF just can`t come on board formally.&quot;

&quot;They will remain part of the troika and be at all the talks,&quot; the source added.

Greek and IMF officials held talks at the Funds&#39;&nbsp;fall meetings in Washington this week, discussing this special status, which was supported by the Greek side. Despite the change in the IMF`s role, Greek officials believe it will aid them having a body that supports debt restructuring at the table.

The IMF was not immediately available for comment on the what the sources said.&nbsp;

Poul Thomsen, director of the IMF&#39;s European Department, said on Friday that the IMF is still &quot;fully engaged&quot; on Greece but is insisting on debt relief, although this need not come in the form of principal reduction, Reuters reported.&nbsp;

&quot;We have not changed our mind on this. This discussion we will have in the coming months,&quot; Thomsen said.

The Greek economy has suffered from a deep recession with demand weighed down by fiscal cutbacks, a heavy tax burden, capital controls and a lack of investment.&nbsp;

The sources added that while the IMF is officially expecting the economy to grow by 0.1 per cent, the actual figure is still likely to be in negative territory. That is far short of the IMF`s 2.8 per cent target for next year in the Fund`s latest economic projections.

The sources said that an agreement over Greek debt relief was still possible but the window of opportunity was very narrow and depended on the quick conclusion of the next bailout review.

If the review drags on, then talks would be put off until after German elections next fall as any discussion on restructuring debt will irk German voters, the sources said.

The Greek side argues that it does not need a haircut but could manage its debt if its repayments were smoothed out, maturities were extended and more expensive IMF debt was swapped for cheaper European funding.

Some of these measures are not acceptable for the EU, however, so talks have moved only slowly.&nbsp;

The Greek economy would also get a major boost from being included in the European Central Bank`s sovereign debt buying programme but that is not likely to happen until the end of the first quarter of 2017, at the earliest, one of the sources said.

The ECB could buy just under 3 billion Euros of Greek debt, a relatively small amount for the economy, but potentially a major confidence booster.&nbsp;

(Reuters)

Two senior sources said IMF will accept a special advisory status with limited powers that keeps it at the table

The International Monetary Fund will not join the Greek bailout programme but will likely accept a special advisory status with limited powers that keeps it at the table, two senior sources with direct knowledge of the proposals said. The IMF has been holding out for more than a year over the terms under which it would participate in any new program, arguing that the financial targets set in the European bailout are unrealistic without major debt relief. But the Fund is increasingly resigned to European resistance to debt relief for Greece and it is now in talks to accept a newly created role that would let it play a part with limited formality, the sources said. "It will be more than an advisor but the role will not have the strict conditionality, like the compliance and economic health checks every three months," one of the sources told Reuters. Talks between Greece, its European creditors and the IMF have been at an impasse since German finance minister Wolfgang Schaeuble insisted on the IMF taking part but rejected calls from IMF Managing Director Christine Lagarde for a big debt restructuring. "This way Lagarde can go to the board and say, hey, 'I'm not violating our rules' and Schaeuble, whose government is facing an election next fall, can say, 'see, I have the IMF on board`" the source said. The exact nature of the IMF`s role has not been decided but it would have more powers than a simple advisor and would for example, be responsible for drawing up certain proposed agreements and negotiating documents, coordinating with the Greek and European Union sides." They won't put money into the programme but it won't be just technical assistance; they will probably take a special advisory role to be created especially for the Greek bailout," the second source said. "Talks this week just made it clear that the IMF just can`t come on board formally." "They will remain part of the troika and be at all the talks," the source added. Greek and IMF officials held talks at the Funds' fall meetings in Washington this week, discussing this special status, which was supported by the Greek side. Despite the change in the IMF`s role, Greek officials believe it will aid them having a body that supports debt restructuring at the table. The IMF was not immediately available for comment on the what the sources said. Poul Thomsen, director of the IMF's European Department, said on Friday that the IMF is still "fully engaged" on Greece but is insisting on debt relief, although this need not come in the form of principal reduction, Reuters reported. "We have not changed our mind on this. This discussion we will have in the coming months," Thomsen said. The Greek economy has suffered from a deep recession with demand weighed down by fiscal cutbacks, a heavy tax burden, capital controls and a lack of investment. The sources added that while the IMF is officially expecting the economy to grow by 0.1 per cent, the actual figure is still likely to be in negative territory. That is far short of the IMF`s 2.8 per cent target for next year in the Fund`s latest economic projections. The sources said that an agreement over Greek debt relief was still possible but the window of opportunity was very narrow and depended on the quick conclusion of the next bailout review. If the review drags on, then talks would be put off until after German elections next fall as any discussion on restructuring debt will irk German voters, the sources said. The Greek side argues that it does not need a haircut but could manage its debt if its repayments were smoothed out, maturities were extended and more expensive IMF debt was swapped for cheaper European funding. Some of these measures are not acceptable for the EU, however, so talks have moved only slowly. The Greek economy would also get a major boost from being included in the European Central Bank`s sovereign debt buying programme but that is not likely to happen until the end of the first quarter of 2017, at the earliest, one of the sources said. The ECB could buy just under 3 billion Euros of Greek debt, a relatively small amount for the economy, but potentially a major confidence booster. (Reuters)

IMF to stay out of Greek bailout: Report

Former International Monetary Fund (IMF) chief Rodrigo Rato will face trial on Monday over &#39;overseeing a corrupt system that allowed 65 former executives and board members at Spanish banks Caja Madrid and Bankia to misuse funds during Rato&#39;s tenure as their bank head&#39;, AFP reported today.&nbsp; 
 
Prosecutors want Rato to get a prison sentence of four-and-a-half years and a 2.6-million-euro fine for allegedly spending 12 million Euros between 2003 and 2012, leading to Spain&#39;s near financial collapse.&nbsp; 
 
Rato took over as the head of Caja Madrid in 2010 where he indulged in the corrupt practices. He reportedly continued with &#39;similar practices&#39; later in Bankia, the group born in 2011 following the merger of Caja Madrid with six other savings banks.&nbsp; 
 
The Bankia scandal 
 
Rato&#39;s short tenure as a&nbsp;banker in Spain between 2010 and 2012 saw the unfolding of the Bankia scandal, AFP observes.&nbsp; 
 
Thousands of small-scale investors, after being goaded into converting their savings to shares when Bankia was born, lost huge sums of money.&nbsp; 
 
The losses escalated to an extent that the country plunged into a financial crisis. It had to ask the European Union for a bailout for the banking sector. Out of the 41 billion euros, Bankia has paid 1.2 billion euros.&nbsp; 
 
As the head of Caja Madrid Rato is accused of spending 436,000 euros between 2003 and 2010, including more than 100,000 euros in restaurant bills. 
 
Rato, however, has denied any wrongdoing saying that the expenses were for &ldquo;discretionary spending as a part of the pay deal for executives.&quot; 
 
(WION with inputs from AFP) 
 
 
&nbsp;

Rato allowed 65 other top executives to misuse bank Caja Madrid and Bankia's funds during his tenure as the bank head

Former International Monetary Fund (IMF) chief Rodrigo Rato will face trial on Monday over 'overseeing a corrupt system that allowed 65 former executives and board members at Spanish banks Caja Madrid and Bankia to misuse funds during Rato's tenure as their bank head', AFP reported today. Prosecutors want Rato to get a prison sentence of four-and-a-half years and a 2.6-million-euro fine for allegedly spending 12 million Euros between 2003 and 2012, leading to Spain's near financial collapse. Rato took over as the head of Caja Madrid in 2010 where he indulged in the corrupt practices. He reportedly continued with 'similar practices' later in Bankia, the group born in 2011 following the merger of Caja Madrid with six other savings banks. The Bankia scandal Rato's short tenure as a banker in Spain between 2010 and 2012 saw the unfolding of the Bankia scandal, AFP observes. Thousands of small-scale investors, after being goaded into converting their savings to shares when Bankia was born, lost huge sums of money. The losses escalated to an extent that the country plunged into a financial crisis. It had to ask the European Union for a bailout for the banking sector. Out of the 41 billion euros, Bankia has paid 1.2 billion euros. As the head of Caja Madrid Rato is accused of spending 436,000 euros between 2003 and 2010, including more than 100,000 euros in restaurant bills. Rato, however, has denied any wrongdoing saying that the expenses were for “discretionary spending as a part of the pay deal for executives." (WION with inputs from AFP)

Former IMF boss Rodrigo Rato to face trial over corruption charges

Argentina&#39;s ministry of finance has said that International Monetary Fund (IMF) economists will be arriving in the country on Monday to &quot;gather information and exchange opinions with government officials, members of the private sector and members of Congress and civil organisations.&quot; 
 
IMF will resume its Article IV missions in Argentina after a 10-year hiatus. During this mission, IMF is likely to assess the strengths and weaknesses of the country, AFP reported today.&nbsp; 
 
The checkups were stopped during former president Nestor Kirchner&#39;s tenure.&nbsp; 
 
&quot;Article IV represents a new step for Argentina in its international reintegration,&quot; said the ministry. 
 
Relations were strained after the country&#39;s default on $100 billion in debt in 2001, but ties were further affected when IMF censured Buenos Aires in 2013 for not meeting an IMF requirement that members must provide reliable, basic economic statistics. 
 
The move marks a repairing of relations, brought by economic policy changes of President Mauricio Macri, who moved to repay defaulted debt and implement market-friendly reforms. 
 
(WION with inputs from AFP) 
 
 
&nbsp;

According to Argentina's ministry of finance, Article IV represents a new step for the country in its international reintegration

Argentina's ministry of finance has said that International Monetary Fund (IMF) economists will be arriving in the country on Monday to "gather information and exchange opinions with government officials, members of the private sector and members of Congress and civil organisations." IMF will resume its Article IV missions in Argentina after a 10-year hiatus. During this mission, IMF is likely to assess the strengths and weaknesses of the country, AFP reported today. The checkups were stopped during former president Nestor Kirchner's tenure. "Article IV represents a new step for Argentina in its international reintegration," said the ministry. Relations were strained after the country's default on $100 billion in debt in 2001, but ties were further affected when IMF censured Buenos Aires in 2013 for not meeting an IMF requirement that members must provide reliable, basic economic statistics. The move marks a repairing of relations, brought by economic policy changes of President Mauricio Macri, who moved to repay defaulted debt and implement market-friendly reforms. (WION with inputs from AFP)

IMF to resume Article IV missions in Argentina after 10-year hiatus

Egypt has asked the International Monetary Fund for financial support as it struggles to strengthen its economy, the IMF said on Tuesday. 
 
The Fund plans to send a staff team to the country at the end of this month to review the situation and begin consultations, it said. 
 
According to some media reports, Egypt is seeking a loan program of $7 billion. 
 
&quot;The Egyptian authorities have asked the IMF to provide financial support for their economic program,&quot; said Masood Ahmed, director of the IMF middle-east and central-Asia department, said in a statement. 
 
&quot;We welcome this request, and look forward to discussing policies which can help Egypt meet its economic challenges. Our goals are to help Egypt return to economic stability and to support strong, sustainable and job-rich growth.&quot; 
 
In late 2012 Egypt, under former president Mohamed Morsi, had reached a tentative deal to borrow $4.8 billion from the IMF to buoy the country&#39;s sagging finances after the revolution that brought him to power. 
 
However, negotiations were stymied in part by Egypts resistance to reforms and political instability, which eventually led to Morsi&#39;s overthrow by the military in July 2013. 
 
The subsequent government of President Abdel Fattah al-Sisi turned to the wealthy governments of the Gulf for billions of Dollars to stabilise the country. 
 
But it continues to struggle, and the central bank devalued the Egyptian Pound by nearly 15 per cent in March. 
 
(AFP)

IMF plans to send a team to the country at the end of this month to review the situation and begin consultations

Egypt has asked the International Monetary Fund for financial support as it struggles to strengthen its economy, the IMF said on Tuesday. The Fund plans to send a staff team to the country at the end of this month to review the situation and begin consultations, it said. According to some media reports, Egypt is seeking a loan program of $7 billion. "The Egyptian authorities have asked the IMF to provide financial support for their economic program," said Masood Ahmed, director of the IMF middle-east and central-Asia department, said in a statement. "We welcome this request, and look forward to discussing policies which can help Egypt meet its economic challenges. Our goals are to help Egypt return to economic stability and to support strong, sustainable and job-rich growth." In late 2012 Egypt, under former president Mohamed Morsi, had reached a tentative deal to borrow $4.8 billion from the IMF to buoy the country's sagging finances after the revolution that brought him to power. However, negotiations were stymied in part by Egypts resistance to reforms and political instability, which eventually led to Morsi's overthrow by the military in July 2013. The subsequent government of President Abdel Fattah al-Sisi turned to the wealthy governments of the Gulf for billions of Dollars to stabilise the country. But it continues to struggle, and the central bank devalued the Egyptian Pound by nearly 15 per cent in March. (AFP)

Egypt seeks financial support from International Monetary Fund

The International Monetary Fund (IMF) has warned risks to the global economy are growing, as it called on some G20 nations to boost government spending.

Central bank chiefs and finance ministers from the world&#39;s top 20 economies gathered in the southwestern Chinese city of Chengdu on Saturday to tackle a slowing global economy facing new uncertainties with Britain voting to leave the European Union (EU).

&quot;Global growth remains weak, and downside risks have become more salient,&quot; the IMF said in a report released ahead of the G20 meeting.

&quot;Growth could be even lower if the current increases in economic and political uncertainty in the wake of the &#39;Brexit&#39; vote continue.&quot;

In an update to its April forecast, the IMF lowered its forecasts for global growth this year and next by 0.1 per cent, to 3.1 per cent and 3.5 per cent respectively.

Britain&#39;s new finance minister Philip Hammond is among those attending to deliver a message that his country is still &quot;open for business&quot;, according to a statement from the British treasury.

The IMF wants advanced economies like Germany and the United States to channel more public spending into infrastructure investment to help boost global growth, an issue that has sparked divisions among G20 members.

&quot;Reforms that facilitate the scaling up of infrastructure investment would help raise productive capacity, boost short-term demand directly, and catalyse private investment,&quot; it said.
Terrorism, Turkey, Trump 
 
But other challenges loom besides Brexit, including what one official attending referred to as the &quot;Three Ts&quot; -&nbsp;terrorism, Turkey and Trump.

The recent attack in the French city of Nice which killed 84 people, the third major incident in the European country over the past 18 months, has rattled financial markets, and a gunman in the German city of Munich killed nine people on Friday.

A failed coup in Turkey which had aimed at unseating President Recep Tayyip Erdogan, and his huge subsequent crackdown on opponents, has alarmed Ankara&#39;s Western allies.

Speaking at a G20-linked tax seminar on Saturday, Turkey&#39;s deputy prime minister Mehmet Simsek sought to reassure other countries.

&quot;Despite what has happened a week ago in Turkey,&nbsp;we will continue to strongly adhere to democratic principles and apply rule of law, and not much really has changed,&quot; he said.

Tycoon Donald Trump sealing the Republican party nomination in the US presidential race, where he will face Democrat Hillary Clinton, could add uncertainty if the contest is close.

At an earlier G20 meeting in February, finance ministers vowed to use &quot;all policy tools&quot; -- monetary, fiscal and structural -- to support economic growth.

&quot;The G20 process has given us greater ability to focus globally on how to use the different tools at our disposal to promote growth,&quot; US treasury secretary Jacob Lew told the tax seminar.

But with the use of monetary policy reaching its limits in some countries, analysts see more room for using fiscal measures.

&quot;As to stimulus, we actually do not expect much monetary stimulus ahead in the major advanced economies other than in Japan,&quot; Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong, said ahead of the G20 meeting.

&quot;But I do think that the likelihood of fiscal policy easing is rising globally.&quot; 
 
(AFP)

The International Monetary Fund has warned of risks to global growth in the wake of Britain leaving the European Union

The International Monetary Fund (IMF) has warned risks to the global economy are growing, as it called on some G20 nations to boost government spending. Central bank chiefs and finance ministers from the world's top 20 economies gathered in the southwestern Chinese city of Chengdu on Saturday to tackle a slowing global economy facing new uncertainties with Britain voting to leave the European Union (EU). "Global growth remains weak, and downside risks have become more salient," the IMF said in a report released ahead of the G20 meeting. "Growth could be even lower if the current increases in economic and political uncertainty in the wake of the 'Brexit' vote continue." In an update to its April forecast, the IMF lowered its forecasts for global growth this year and next by 0.1 per cent, to 3.1 per cent and 3.5 per cent respectively. Britain's new finance minister Philip Hammond is among those attending to deliver a message that his country is still "open for business", according to a statement from the British treasury. The IMF wants advanced economies like Germany and the United States to channel more public spending into infrastructure investment to help boost global growth, an issue that has sparked divisions among G20 members. "Reforms that facilitate the scaling up of infrastructure investment would help raise productive capacity, boost short-term demand directly, and catalyse private investment," it said. Terrorism, Turkey, Trump But other challenges loom besides Brexit, including what one official attending referred to as the "Three Ts" - terrorism, Turkey and Trump. The recent attack in the French city of Nice which killed 84 people, the third major incident in the European country over the past 18 months, has rattled financial markets, and a gunman in the German city of Munich killed nine people on Friday. A failed coup in Turkey which had aimed at unseating President Recep Tayyip Erdogan, and his huge subsequent crackdown on opponents, has alarmed Ankara's Western allies. Speaking at a G20-linked tax seminar on Saturday, Turkey's deputy prime minister Mehmet Simsek sought to reassure other countries. "Despite what has happened a week ago in Turkey, we will continue to strongly adhere to democratic principles and apply rule of law, and not much really has changed," he said. Tycoon Donald Trump sealing the Republican party nomination in the US presidential race, where he will face Democrat Hillary Clinton, could add uncertainty if the contest is close. At an earlier G20 meeting in February, finance ministers vowed to use "all policy tools" -- monetary, fiscal and structural -- to support economic growth. "The G20 process has given us greater ability to focus globally on how to use the different tools at our disposal to promote growth," US treasury secretary Jacob Lew told the tax seminar. But with the use of monetary policy reaching its limits in some countries, analysts see more room for using fiscal measures. "As to stimulus, we actually do not expect much monetary stimulus ahead in the major advanced economies other than in Japan," Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong, said ahead of the G20 meeting. "But I do think that the likelihood of fiscal policy easing is rising globally." (AFP)

G20 finance leaders meet in China, discuss growing risks to global economy

The uncertainty created by Britain&#39;s vote to leave the European Union will slow the global economy into next year, the International Monetary Fund (IMF) predicted on Tuesday. 
 
Last month&#39;s populist victory in the British referendum has darkened the skies in that country and across the Euro area, according to the global crisis lender, forcing it to cut April&#39;s growth forecasts and rattling what had already been a fragile recovery. 
 
Britain&#39;s relations to the 28-member EU single market were thrown into confusion following the June 23 vote, raising the possibility of sudden, new trade barriers and at least initially causing a selloff in global financial markets. 
 
Analysts have predicted this will weigh on consumption and investor confidence.

In an update to its April forecast, the IMF said global economic growth was likely to be 3.1 per cent this year and 3.4 per cent in 2017, a downward revision of 0.1 per cent for both years. 
 
Brexit was liable to cost the British economy nearly a full percentage point of growth in 2017 as demand will likely be significantly lower than it would have been had the remain camp been victorious. 
 
&quot;Continuing uncertainty is likely to weigh on consumption and especially investment,&quot; the IMF said. 
 
Nigeria, Africas largest economy, saw unusually painful revisions as dropping oil prices have hurt oil revenues, power production and investor confidence. Its economy is now expected to contract by 1.8 per cent rather than grow by 2.3 per cent, a sharp revision that has followed the steep devaluation of the countrys currency. 
 
In a bright spot, stronger activity in the Euro area has seen this years growth forecast revised upward by 0.1 per cent to 1.6 per cent. But possible drops in consumer and business confidence as well as strain on banks means 2017 will likely see a slowdown after the Brexit referendum. Brexits consequences for the United States were likely to be &quot;muted,&quot; with growth steady at 1.8 per cent this year and next, representing a downward revision of 0.2 per cent in 2016. 
 
However, the IMF warned of possibly greater risks for global growth. Non-performing loans and the poor profitability of Greek, Italian and Portuguese banks as well as enduring market turbulence were among factors that &quot;could have severe macroeconomic repercussions,&quot; according to the Fund. 
 
While the short-term prospects for the Chinese economy were unchanged or even improved due to interventions by central authorities -- driving this years forecast up 0.1 to 6.6 per cent -- the heavy reliance on credit to drive growth could create instability. 
 
The recent appreciation of the Yen is likely to counteract an announced two-year delay in hiking a consumption tax in Japan. This has slowed the forecast growth in that countrys already anemic economy, with the IMF revising it downward to just 0.3 per cent, to be followed by a bare 0.1 per cent expansion in 2017. 
 
(Reuters)

Britain's uncertain relations with the 28-member EU single market raises possibility of sudden and new trade barriers

The uncertainty created by Britain's vote to leave the European Union will slow the global economy into next year, the International Monetary Fund (IMF) predicted on Tuesday. Last month's populist victory in the British referendum has darkened the skies in that country and across the Euro area, according to the global crisis lender, forcing it to cut April's growth forecasts and rattling what had already been a fragile recovery. Britain's relations to the 28-member EU single market were thrown into confusion following the June 23 vote, raising the possibility of sudden, new trade barriers and at least initially causing a selloff in global financial markets. Analysts have predicted this will weigh on consumption and investor confidence. In an update to its April forecast, the IMF said global economic growth was likely to be 3.1 per cent this year and 3.4 per cent in 2017, a downward revision of 0.1 per cent for both years. Brexit was liable to cost the British economy nearly a full percentage point of growth in 2017 as demand will likely be significantly lower than it would have been had the remain camp been victorious. "Continuing uncertainty is likely to weigh on consumption and especially investment," the IMF said. Nigeria, Africas largest economy, saw unusually painful revisions as dropping oil prices have hurt oil revenues, power production and investor confidence. Its economy is now expected to contract by 1.8 per cent rather than grow by 2.3 per cent, a sharp revision that has followed the steep devaluation of the countrys currency. In a bright spot, stronger activity in the Euro area has seen this years growth forecast revised upward by 0.1 per cent to 1.6 per cent. But possible drops in consumer and business confidence as well as strain on banks means 2017 will likely see a slowdown after the Brexit referendum. Brexits consequences for the United States were likely to be "muted," with growth steady at 1.8 per cent this year and next, representing a downward revision of 0.2 per cent in 2016. However, the IMF warned of possibly greater risks for global growth. Non-performing loans and the poor profitability of Greek, Italian and Portuguese banks as well as enduring market turbulence were among factors that "could have severe macroeconomic repercussions," according to the Fund. While the short-term prospects for the Chinese economy were unchanged or even improved due to interventions by central authorities -- driving this years forecast up 0.1 to 6.6 per cent -- the heavy reliance on credit to drive growth could create instability. The recent appreciation of the Yen is likely to counteract an announced two-year delay in hiking a consumption tax in Japan. This has slowed the forecast growth in that countrys already anemic economy, with the IMF revising it downward to just 0.3 per cent, to be followed by a bare 0.1 per cent expansion in 2017. (Reuters)

IMF: Brexit to cost Britain nearly 1% growth in 2017

Sri Lanka today announced that it had raised $1.5 billion through a bond issue which was nearly four times oversubscribed despite volatility triggered by Britain&#39;s to leave the European Union (EU). 
 
The Central Bank of Sri Lanka said orders totalled $5.5 billion for the $1.5 billion bond issue on Monday. Sri Lanka offered $500 million in bonds with a tenure of 5.5 years and $1 billion for a period of 10 years. 
 
The shorter term debt was priced just below 6.125 per cent while the longer tenue was at 7.125 percent, the bank said, adding that the rate was well within its anticipated interest rate. 
 
&quot;Despite the high volatility in the global financial markets following the historic United Kingdom referendum in June regarding their membership of the European Union, the bonds saw strong interests from a wide range of high quality investors,&quot; the bank said. 
 
Sri Lanka has already appointed a high-powered panel to study the effects of Brexit on its $82 billion economy as 10 per cent of its exports to Britain are under European Union trade concessions. 
 
Sri Lanka&#39;s new government secured a $1.5 billion IMF bailout last month to address its balance of payments crisis after a spending spree to increase public sector salaries last year. 
 
President Maithripala Sirisena&#39;s administration sought an IMF bailout immediately after taking power in January last year, but the fund turned down the request, saying Sri Lanka&#39;s reserves were at a comfortable level then. 
 
However, the government faced a balance of payments crisis after it implemented its election pledges of lower fuel and utility prices. 
 
Sri Lanka enjoyed impressive economic growth rates averaging more than 8.0 percent for two years after a prolonged civil war ended in 2009. 
 
But the pace has since slowed, falling to 4.8 percent in 2015, down from 4.9 in the previous year, according to official data. 
 
(AFP)&nbsp; 
 
&nbsp;

Sri Lanka has already appointed a high-powered panel to study the effects of Brexit on its $82 billion economy

Sri Lanka today announced that it had raised $1.5 billion through a bond issue which was nearly four times oversubscribed despite volatility triggered by Britain's to leave the European Union (EU). The Central Bank of Sri Lanka said orders totalled $5.5 billion for the $1.5 billion bond issue on Monday. Sri Lanka offered $500 million in bonds with a tenure of 5.5 years and $1 billion for a period of 10 years. The shorter term debt was priced just below 6.125 per cent while the longer tenue was at 7.125 percent, the bank said, adding that the rate was well within its anticipated interest rate. "Despite the high volatility in the global financial markets following the historic United Kingdom referendum in June regarding their membership of the European Union, the bonds saw strong interests from a wide range of high quality investors," the bank said. Sri Lanka has already appointed a high-powered panel to study the effects of Brexit on its $82 billion economy as 10 per cent of its exports to Britain are under European Union trade concessions. Sri Lanka's new government secured a $1.5 billion IMF bailout last month to address its balance of payments crisis after a spending spree to increase public sector salaries last year. President Maithripala Sirisena's administration sought an IMF bailout immediately after taking power in January last year, but the fund turned down the request, saying Sri Lanka's reserves were at a comfortable level then. However, the government faced a balance of payments crisis after it implemented its election pledges of lower fuel and utility prices. Sri Lanka enjoyed impressive economic growth rates averaging more than 8.0 percent for two years after a prolonged civil war ended in 2009. But the pace has since slowed, falling to 4.8 percent in 2015, down from 4.9 in the previous year, according to official data. (AFP)

Despite Brexit volatility, Sri Lanka raises $1.5 billion

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