Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘IMF’

How to stop governments borrowing behind their people’s backs

Posted by hkarner - 15. Juni 2019

Date: 13-06-2019
Source: The Economist

Principles on debt transparency endorsed at a G20 summit may help

In 2016 the government of Mozambique confessed to secret debts of $1.4bn, or 11% of gdp, mostly as loan guarantees for state-backed companies. Growth faltered, the currency slumped and foreign donors pulled back. The results have been “devastating”, says Denise Namburete, a civil-society activist, describing health centres that have gone two years without medicines. American prosecutors are pursuing eight people involved in the scandal, including three foreign bankers and a former finance minister, on charges of money-laundering and fraud.

The Mozambique case may be unusual—or not. Even the imf is scratching its head about how much governments truly owe. In some places the mystery is loans from China and other emerging lenders. In others it is advance payments from oil traders, liabilities from public-private partnerships or hidden loans from commercial banks. The Institute of International Finance (iif), a group of banks and financial institutions, has responded to mounting concern by drafting principles on debt transparency. Finance ministers of g20 countries endorsed them at a summit in Fukuoka, in Japan, on June 8th-9th. Den Rest des Beitrags lesen »

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Corruption and Your Money

Posted by hkarner - 29. Mai 2019

The costs of corruption run deep. Your taxpayer dollars are lost in different ways, siphoned off from schools, roads, and hospitals to line the pockets of people up to no good.

Equally damaging is the way it corrodes the government’s ability to help grow the economy in a way that benefits all citizens.

And no country is immune to corruption. Our Chart of the Week from the Fiscal Monitor analyzes more than 180 countries and finds that more corrupt countries collect fewer taxes, as people pay bribes to avoid them, including through tax loopholes designed in exchange for kickbacks. Also, when taxpayers believe their governments are corrupt, they are more likely to evade paying taxes.

The chart shows that overall, the least corrupt governments collect 4 percent of GDP more in tax revenues than countries at the same level of economic development with the highest levels of corruption. Den Rest des Beitrags lesen »

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The Impact of US-China Trade Tensions

Posted by hkarner - 24. Mai 2019

By Eugenio Cerutti, Gita Gopinath, and Adil Mohommad

US-China trade tensions have negatively affected consumers as well as many producers in both countries. The tariffs have reduced trade between the US and China, but the bilateral trade deficit remains broadly unchanged. While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019.

Evolution of trade in the US and China

The raising of US tariffs to 25 percent on $200 billion of annual Chinese imports on May 10, together with the announced Chinese retaliation, marks the latest escalation in the US–China trade tensions.

The impact of previously imposed tariffs by the US and subsequent retaliation by China is already evident in trade data. Both the countries directly involved and their trading partners have been affected by rising tariffs.

In 2018, the US imposed tariffs sequentially on three “lists” of goods from China, targeting first $34 billion of annual imports, then $16 billion more, and finally an additional $200 billion. As a result, US imports from China have declined quite sharply in all three groups of the goods on which tariffs were imposed.

In cases where there was a delay between announcement and implementation of tariffs, as in the case of the $16 billion and $200 billion lists, or plans to phase in the tariff increase, as in the case of the $200 billion list, we observed an increase in import growth in advance of the effective dates. This suggests that importers stocked up ahead of the tariffs, accounting for the sharper decline in imports thereafter.

As China imposed retaliatory tariffs, US exports to China also declined. While the front-loading dynamic is not evident in this case, US export growth to China has been generally weaker since the trade tensions began.

Effects on consumers

Consumers in the US and China are unequivocally the losers from trade tensions.  Research by Cavallo, Gopinath, Neiman and Tang, using price data from the Bureau of Labor Statistics on imports from China, finds that tariff revenue collected has been borne almost entirely by US importers. There was almost no change in the (ex-tariff) border prices of imports from China, and a sharp jump in the post-tariff import prices matching the magnitude of the tariff. Den Rest des Beitrags lesen »

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Falling Costs Make Wind, Solar More Affordable

Posted by hkarner - 26. April 2019

By Christian Bogmans

Harnessing wind and solar energy for low-carbon electric power generation was once considered uneconomical. Now, rapidly falling costs for these technologies are boosting global renewable energy capacity. Renewable energy sources can help reduce carbon emissions substantially and the effects of global warming.

As the Chart of the Week from the April World Economic Outlook shows, solar and onshore wind turbines saw the biggest price declines among low-carbon energy sources between 2009 and 2017. Prices dropped 76 percent for solar panels and 34 percent for turbines during that time, making them competitive alternatives to fossil fuels and more traditional low-carbon energy sources such as hydropower and nuclear. Den Rest des Beitrags lesen »

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The IMF at 75: Reforming the global reserve system

Posted by hkarner - 20. April 2019

José Antonio Ocampo 08 April 2019, voxeu

Member of the Board of Directors of Banco de la República; Professor of Professional Practice in International and Public Affairs, Columbia University (on leave)

The 75th anniversary of the Bretton Woods agreement is a good time to rethink the role the institutions created at the time should play in today’s world. In the case of the IMF, there are four central issues to consider:

  1. the global reserve system (the way international liquidity is provided);
  2. managing the macroeconomic linkages among different economies, including the exchange rate system;
  3. balance-of-payments crisis prevention and resolution, including in the first case rules for capital account management; and
  4. improving governance of the international monetary system, to develop a more inclusive system and appropriate links between the IMF and regional and interregional monetary arrangements (i.e. the design of the Global Financial Safety Net). Den Rest des Beitrags lesen »

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Financing for Sustainable Development: Tackling Big Challenges

Posted by hkarner - 19. April 2019

By Chris Lane

Without adequate financing, the best intentions of the global community expressed in the Sustainable Development Goals (SDGs) will remain beyond reach.

Recent setbacks in financing for development should therefore focus policymakers’ attention on the need for decisive national strategies so these best intentions might be realized. Harnessing the necessary resources could be achieved through a combination of revenue mobilization, attracting private finance, and supporting financial sector development. Policy makers will need to engage in collective action and practice a new multilateralism in support of global goals.

A new UN study, prepared with significant contributions by the IMF, the World Bank Group, the World Trade Organization, the United Nations Development Program and other UN agencies, takes a deep dive into how countries and the international community are faring in mobilizing the needed financing. Den Rest des Beitrags lesen »

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IWF mahnt Italien zur Haushaltssanierung

Posted by hkarner - 13. April 2019

12. April 2019, 16:59 derstandard.at

Internationaler Währungsfonds fordert Maßnahmenpaket

Washington – Der Internationale Währungsfonds (IWF) mahnt das hoch verschuldete Italien zur schrittweisen Sanierung seiner Staatsfinanzen. Dafür sei ein auf mittlere Sicht angelegtes Maßnahmenpaket „von entscheidender Bedeutung“, sagte der für Europa zuständige IWF-Bereichsleiter Poul Thomsen am Freitag in Washington. Neben der niedrigen Produktivität gelte es für das Land, auch die hohe strukturelle Arbeitslosigkeit anzugehen. EZB-Präsident Mario Draghi hat die Regierung in Rom ebenfalls aufgefordert, mehr zu tun, um „Wachstum und Beschäftigung zu schaffen“. Italien steckt in einer Rezession und ächzt unter einem Schuldenberg, der mehr als 130 Prozent der jährlichen Wirtschaftsleistung ausmacht.

Streit mit EU-Kommission vorprogrammiert

Den Rest des Beitrags lesen »

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High Debt Hampers Countries’ Response to a Fast-Changing Global Economy

Posted by hkarner - 11. April 2019

April 10, 2019, IMF Blog

By Vitor Gaspar, John Ralyea, and Elif Ture

Economic growth is slowing and public debt remains high across the world. Meanwhile, demographic changes and technological advances are reshaping the global economy.

Everyone’s opportunities for a good education, along with their job prospects, healthcare, and retirement income depend on the tax and spending choices governments make as they respond to these challenges.

What should policymakers do?

In the new Fiscal Monitor, we argue that they can take a long-term view to foster higher and more inclusive growth. This means getting their fiscal houses in order by gradually lowering debt to prepare for the next downturn and upgrading fiscal policy to invest in people’s futures. This requires better allocating spending, creating more room in the budget, and improving tax policy.

Preparing for the next downturn Den Rest des Beitrags lesen »

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Weak Spots in Global Financial System Could Amplify Shocks

Posted by hkarner - 11. April 2019

By Tobias Adrian and Fabio Natalucci

In the United States, the ratio of corporate debt to GDP is at record-high levels. In several European countries, banks are overloaded with government bonds. In China, bank profitability is declining, and capital levels remain low at small and medium-size lenders.

Vulnerabilities like these are on the rise across advanced and emerging market economies, according to the IMF’s latest Global Financial Stability Report. They aren’t all setting off alarm bells just yet. But if they continue to build, especially with still-easy financial conditions, they could amplify shocks to the global economy, raising the odds of a severe economic downturn a few years down the road.

With the right mix of policies, countries can sustain growth while keeping vulnerabilities in check.

This poses a dilemma for policymakers seeking to counter a slowing global economy, as discussed in the World Economic Outlook. By taking a patient approach to monetary policy, central banks can accommodate growing downside risks to the economy. But if financial conditions remain easy for too long, vulnerabilities will continue to build, and the odds of a sharp drop in economic growth at some later point will be higher. Den Rest des Beitrags lesen »

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The Global Economy: A Delicate Moment

Posted by hkarner - 10. April 2019

By Gita Gopinath

A year ago, economic activity was accelerating in almost all regions of the world. One year later, much has changed. The escalation of US–China trade tensions, needed credit tightening in China, macroeconomic stress in Argentina and Turkey, disruptions to the auto sector in Germany, and financial tightening alongside the normalization of monetary policy in the larger advanced economies have all contributed to a significantly weakened global expansion, especially in the second half of 2018.

With this weakness expected to persist into the first half of 2019, our new World Economic Outlook (WEO) projects a slowdown in growth in 2019 for 70 percent of the world economy. Global growth softened to 3.6 percent in 2018 and is projected to decline further to 3.3 percent in 2019. The downward revision in growth of 0.2 percentage points for 2019 from the January projection is also broad based. It reflects negative revisions for several major economies including the euro area, Latin America, the United States, the United Kingdom, Canada, and Australia.

After the weak start, growth is projected to pick up in the second half of 2019. This pickup is supported by significant monetary policy accommodation by major economies, made possible by the absence of inflationary pressures despite growing at near potential. The US Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England have all shifted to a more accommodative stance. China has ramped up its fiscal and monetary stimulus to counter the negative effect of trade tariffs. Furthermore, the outlook for US–China trade tensions has improved as the prospects of a trade agreement take shape. Den Rest des Beitrags lesen »

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