Latest news with #International Monetary Fund
Yahoo
2 days ago
- Business
- Yahoo
Milei Wins Second Upgrade by Moody's on Easing FX Controls
(Bloomberg) -- Argentina's credit rating was upgraded by Moody's Ratings for a second time this year, with the agency citing the easing of currency controls and support from the International Monetary Fund. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say Moody's raised the country's credit score by two notches, to Caa1 from Caa3, on par with Egypt and Suriname, according to a statement on Thursday. The nation's outlook was changed to stable from positive. The upgrade comes amid President Javier Milei's attempts to transform South America's second-largest economy. Strategists and analysts alike have lauded the libertarian's efforts to tamp down rampant inflation and reverse years of endemic budget deficits. 'The upgrade reflects the decrease in the risk of a credit event, as the gradual lifting of foreign exchange restrictions enables a transition toward a more robust foreign exchange regime anchored on building international reserve buffers,' Moody's said in a note. Milei's policies have brought price increases to less than 2% a month, with annual inflation now at its lowest since 2020. He's also put the country on track for a primary surplus in 2025, the first in over 15 years, easing the debt burden. The economy returned to growth this year, expanding 7.7% in April, more than expected. But Wall Street has cautioned that despite a new IMF program and more liberal exchange regime, Milei and his team need to amass more hard-currency reserves, something that authorities have pledged they won't do until the peso trades at around a level of 1,000 per dollar. It is currently above 1,200. Another chief concern is whether Milei manages to expand his legislative support during midterm elections later this year. The vote is a key test of support for the administration's harsh belt-tightening campaign. Argentina's dollar bonds underperformed their peers on Thursday before the upgrade was announced, with notes maturing in 2035 losing 0.6 cents on the dollar to trade at around 64 cents, according to indicative pricing data compiled by Bloomberg. The notes now yield 11.94%. Moody's Ratings lifted Argentina's credit score one notch to Caa3 in January, and raised the outlook to positive from stable. Fitch Ratings then raised the nation to CCC+ from CCC in May. S&P Global Ratings affirmed its CCC rating in early February. --With assistance from Nicolle Yapur. (Updates with inflation figures in the fifth paragraph, bond prices in the eighth) How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All What the Tough Job Market for New College Grads Says About the Economy Forget DOGE. Musk Is Suddenly All In on AI The Quest for a Hangover-Free Buzz How Hims Became the King of Knockoff Weight-Loss Drugs ©2025 Bloomberg L.P.
Zawya
2 days ago
- Business
- Zawya
IMF adjusts Egypt's primary balance surplus for FY2025/26 downward at 4% of GDP
Arab Finance: Egypt's primary balance surplus, excluding divestment proceeds, is expected to reach 4% of gross domestic product (GDP) in fiscal year (FY) 2025/2026, the International Monetary Fund (IMF) said in its latest report. The projection is 0.5% lower than the previous program commitments. However, the IMF projects the primary balance surplus to rise to 5% of GDP in FY 2026/2027. The debt-to-GDP ratio is forecast to follow a downward trajectory. This is driven by primary surpluses being sustained, favorable interest-growth differentials persisting, and half of aggregate divestment inflows continue to be allocated to debt reduction. The IMF commented: 'The progress toward fiscal consolidation in the first half (H1) of FY2024/2025 was less strong than initially projected under the program despite strong growth in tax revenue collections.' 'The authorities are taking steps to contain spending in the second half of the fiscal year, to ensure that the end-year fiscal target for FY 2024/2025 is met,' the fund added. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (
The Guardian
3 days ago
- Business
- The Guardian
Wealth redistribution is good for growth
The reasons that Andy Beckett adduces for Labour foregrounding the redistribution of wealth are all valid and appropriate (Why is Labour so afraid to admit that we must tax the rich? 11 July). But there is one that is even more compelling and even more central to government priorities. Far from wealth redistribution being inimical to economic growth, there is overwhelming evidence – not least from international organisations like the International Monetary Fund and the Organisation for Economic Co-operation and Development – that redistribution to ensure a fairer distribution of income and wealth is extremely positive for economic growth, the main reason being that the less well off spend a higher proportion of their more limited incomes, whereas the better off tend to save or invest in their assets; there is no or very little 'trickling down'. In fact, as a result of increased economic inequality, and even though interest rates remain historically low, the major anglophone economies continue to suffer a classic case of what Keynes called 'underconsumption' due to the inability of the poorer members of society to keep up previous levels of demand for goods and BrownAuthor of The Inequality Crisis The concept of 'wealth taxation' takes up much space in the Guardian. Too little mention is made of how it might operate. Governments need to look much harder at the concept of land value taxation (LVT) to overcome the prejudice and fear of what might be considered as 'wealth' to be taxed. LVT is being seriously considered by the Welsh government and should be debated in England too. It would produce a long-term revenue stream for any future government. For example, land values along the Elizabeth line in London rose hugely when it was being built. Why was that not taxed? Likewise with HS2: land values rose near its proposed stations and are still rising near Euston in anticipation of completion. Tax that value at 2% annually and HS2 is paid CrawChesterfield, Derbyshire Have an opinion on anything you've read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section.
Arab News
3 days ago
- Business
- Arab News
IMF says Egypt makes mixed reform progress, cites state dominance of economy
CAIRO: Egypt's progress on structural reforms under an $8 billion International Monetary Fund loan agreement has been mixed, the fund said, citing the public sector's continued dominance of the economy as a problem. In its long-delayed staff report for the fourth review of Egypt's program, the IMF said there had been limited headway in reducing the role of state- and military-owned firms which enjoy preferential treatment in the form of tax exemptions, access to prime land and cheap labor. These companies remain largely shielded from public scrutiny, with 'very limited transparency about their financial condition,' the fund said. Egypt's reliance on a state-led growth model, centered on mega-projects and public investment, was curbing job creation and stifling the private sector in an increasingly volatile global environment, it said. 'The resulting financial and resource distortions have left Egypt with a large informal economy and few buffers against growing global financial, geopolitical and climate shocks,' the fund said. The report was published late Tuesday, four months after the board approved the review and unlocked a $1.2 billion disbursement. Total disbursements are around $3.5 billion. The 46-month facility was signed in March 2024 following more than a year of severe foreign currency shortages and inflation that peaked at 38 percent in September 2023. The fund said last week it would merge the fifth and sixth program reviews into one later this year to give Egypt more time to implement critical reforms. The fund forecast that Egypt's external debt would rise from $162.7 billion in 2024/25 to $202 billion by 2029/30. Public debt overall 'poses a high risk of sovereign stress,' it said, urging authorities to broaden the tax base, phase out untargeted subsidies and increase oversight of off-budget entities such as the state oil company EGPC and the urban development authority NUCA. The report also cited 'persistent and successive external shocks' that it said had 'complicated policy execution,' including the war in Sudan which has pushed hundreds of thousands to flee to Egypt, as well as trade disruptions in the Red Sea which reduced foreign exchange inflows from the Suez Canal by $6 billion last year. Egypt finance minister reacts Egypt's Finance Minister Ahmed Kouchouk said on Wednesday he is confident Egypt is hitting targets set by the IMF over the country's $8 billion loan programme and expects the next review to be completed by September or October. "Both sides, are working on the expectation that this should be happening in September, October," Kouchouk said on the sidelines of an event at the London Stock Exchange. "The IMF is after certain targets - and that's what's important." A successful agreement on a review and subsequent sign off by the Fund's executive board triggers payment of a tranche. Kouchouk also said he expected the government to complete three to four privatisation transactions before the end of the current financial year that started earlier this month. The IMF has made increasing the role of the private sector in the economy a requirement of an expanded $8 billion loan, and Egypt's cabinet said earlier this year it would offer stakes in military-owned companies through its sovereign wealth fund to help comply with the Fund's requirements. "It will be across a lot of sectors, but we have shared also a very strategic plan, a medium-term plan with the international institutions, including the IMF and others, with a very clear, visible timeline," added Kouchouk.
Reuters
4 days ago
- Business
- Reuters
S&P Global downgrades Senegal's rating over soaring debt levels
LONDON, July 15 (Reuters) - Senegal's sovereign credit rating was cut by S&P Global to B- late on Monday and immediately put it back on a negative outlook - effectively another downgrade warning - due to growing concerns about the country's soaring debt levels. Senegal's recently increased its debt figures following an audit and S&P said it now estimated that the government's debt-to-GDP ratio finished last year at 118%, versus its previous forecast of 104%. S&P said the decision to put Senegal's rating back on a 'negative outlook' reflected concerns that the higher debt figure, coupled with higher-than-expected financing requirements for this year, and large debt payments next year, would "intensify funding pressures on the government." "We understand that Senegal's external financing requirements materially exceed our previous estimates, which may complicate negotiations on a new program with the International Monetary Fund," S&P added in its rating review published late on Monday.
