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Business Insider
an hour ago
- Business
- Business Insider
Top 10 countries with the lowest reserves of foreign exchange and gold 2025
A nation's gold and foreign exchange reserves are more than just accounting numbers in the linked global economy of today; they are a crucial indicator of its strategic capacity and economic resilience. Business Insider Africa presents the top 10 countries with the lowest reserves of foreign exchange and gold 2025. This list is courtesy of Global Firepower. Somalia ranks number 1 on the list. A number of vulnerabilities are present in nations with inadequate reserves, and these difficulties are particularly noticeable in many African countries that are struggling with debt, inflation, and currency instability. In times of crisis, a government's capacity to act in the currency market to maintain its national currency is limited by low gold and foreign exchange reserves. A country that lacks an adequate buffer is vulnerable to severe currency depreciation, which raises the price of everything from gasoline and food to machinery and medications. This increases societal dissatisfaction and reduces consumer purchasing power. Furthermore, low reserves reduce investor trust. International investors regard countries with limited reserves as high-risk, resulting in capital flight and a substantial drop in foreign direct investment. Credit rating agencies may downgrade such nations, raising borrowing costs and further straining governmental budgets. It creates a vicious cycle: low reserves contribute to negative investor sentiment, which fuels further economic instability. Low reserves also hinder a country's capacity to repay foreign debt, increasing its reliance on international rescues such as the IMF. While such bailouts may provide temporary respite, they are sometimes accompanied with stringent restrictions, like austerity measures, which can be politically unpopular and socially disruptive. This reliance reduces a country's budgetary sovereignty and limits its ability to establish economic policies. Furthermore, low reserves limit a country's ability to import crucial commodities and services, such as electricity and food, potentially leading to shortages and increased civil discontent. For some African countries, whose economies rely significantly on imports, this poses a direct danger to national security and progress. In the context of global power rankings such as Global Firepower, a low level of reserves indicates a deeper weakness in economic preparation. Top 10 countries with the lowest reserves of foreign exchange and gold 2025 Rank Country Reserves of Foreign Exchange and Gold by Country (2025) 1. Somalia $16,747,500 2. Burkina Faso $47,138,000 3. Zimbabwe $115,530,000 4. South Sudan $183,615,000 5. Sudan $206,763,700 6. Chad $211,591,000 7. Eritrea $225,014,976 8. Syria $341,962,500 9. Central Africa Republic $374,405,000 10. Beliz $473,729,000
Fibre2Fashion
an hour ago
- Business
- Fibre2Fashion
India urged to liberalise FDI, reduce trade barriers: IMF
The International Monetary Fund (IMF) has recommended India to reduce import restrictions, particularly on intermediate goods, and liberalise its foreign direct investment (FDI) regime to address imbalances in the external sector. Despite recent steps towards opening up the economy, India's trade and capital account regimes remain relatively restricted, continuing to weigh on both exports and imports, according to the IMF's External Sector report. Further improvements in the business environment, including trade infrastructure development, are seen as essential for maintaining external balance. The IMF has recommended easing import restrictions and liberalising FDI to strengthen India's external sector. For FY25, the sector shows moderate strength despite global demand weakness and commodity price volatility. The current account deficit is expected to remain smaller than anticipated. Net FDI inflows are expected to decrease. Foreign exchange reserves increased to $665.4 billion. India's external sector position for fiscal 2025 (FY25) is assessed as moderately stronger than expected. Despite the positive outlook the report highlights vulnerabilities arising from weakening global demand, geoeconomic fragmentation, and potential volatility in commodity prices and global financial conditions. The current account (CA) deficit is projected to remain smaller than anticipated, driven by buoyant services exports and declining oil prices, although it is expected to converge to its norm over the medium term. On India's foreign asset and liability position, the IMF projects modest improvement, with the Net International Investment Position (NIIP) improving from -10.5 per cent of GDP in 2023 to -9.6 per cent by the end of 2024. This reflects nominal GDP growth and valuation changes, partially offsetting the impact of the current account deficit. External debt liabilities remain relatively low compared to peers, which minimises short-term rollover risks. In terms of the current account, the IMF expects the deficit to widen slightly to -0.8 per cent of GDP in FY25, from -0.7 per cent in FY24, driven by domestic demand for imports and strong services exports. While the deficit is expected to increase to -0.9 per cent of GDP in FY26, the IMF notes that the overall CA deficit is projected to return to its norm of around -2 per cent of GDP in the medium term. India's real exchange rate (REER) has shown appreciation in the first half of 2024, supported by portfolio investment inflows, but reversed in the latter half due to shifts in investor sentiment and global uncertainty. The IMF's assessment suggests a moderate overvaluation of the rupee, with the REER gap projected at -7.9 per cent. The report also points to a decrease in net foreign direct investment (FDI) inflows for FY25, with steady gross inflows offset by increased disinvestment. However, the inclusion of Indian bonds in global indices is expected to support net portfolio investment inflows, helping to finance the current account deficit. Finally, India's foreign exchange reserves increased to $665.4 billion by the end of FY25, sufficient for precautionary purposes. The Reserve Bank of India's interventions aimed to stabilise the rupee and reduce excessive market volatility. Fibre2Fashion News Desk (HU)
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First Post
an hour ago
- Business
- First Post
Pakistan farmers threaten wheat cultivation boycott over 'unethical' farm tax
Sindh Chamber of Agriculture (SCA) alleged that a new 45 per cent income tax on farm earnings was introduced under pressure from the IMF and threatened of a widespread wheat cultivation boycott in protest read more In a development reflecting rising rural frustration at mounting economic pressures in Pakistan's farm belt and potentially spelling a world of trouble for food security in the cash-strapped nation, Sindh's largest agricultural body said it would mount a legal challenge against a new 45 per cent income tax on farm earnings, branding the levy 'unconstitutional, illegal and unethical'. The Sindh Chamber of Agriculture (SCA) warned of a widespread boycott of wheat cultivation in protest, escalating tensions between farmers and the provincial government. STORY CONTINUES BELOW THIS AD The chamber convened in Pakistan's Hyderabad on Tuesday (July 22) under the leadership of its patron-in-chief, Dr Syed Nadeem Qamar, to formalise its response. It alleged the tax was introduced under pressure from the International Monetary Fund (IMF), with the move drawing strong resistance from growers who argue that poor returns on crops leave no room for additional fiscal burdens, Dawn reported. Farmers attending the meeting said they were struggling to receive adequate prices for their produce and slammed the government's tax move as unjustified. The SCA responded by instructing farmers across Sindh to refrain from paying the new tax, adding that if authorities attempted arrests, 'millions of other farmers would also court arrest.' 'We are ready to face imprisonment, but will not pay the agricultural income tax,' the group's leaders declared. Participants vowed full-scale defiance, comparing their treatment unfavourably to industrialists, who they said had been granted tax exemptions. The SCA also declared a boycott of wheat cultivation for the 2025-26 season, citing inadequate support prices. Instead of sowing wheat, the SCA said farmers would switch to alternative crops such as mustard, nigella (kalonji), sunflower and other oilseeds. The group said growers were unable to recover their costs due to low wheat prices and declared 2025-26 a 'boycott year' for the staple crop. The chamber also raised alarm over a 40 per cent decline in cotton output, forecasting a total yield of no more than four million bales. It said that although the Sindh agriculture minister had pledged a support price of Rs11,000 per maund, farmers were currently receiving just Rs6,500. STORY CONTINUES BELOW THIS AD The SCA called for the immediate removal of an 18 per cent local tax on cotton and demanded a 25 per cent tariff on imported cotton to encourage domestic production. At the same time, it voiced concern over the surging cost of key inputs, noting a PKR 22 per litre jump in diesel prices and a PKR 600 increase in DAP fertiliser per bag over just a fortnight. Such rising costs, paired with stagnant farmgate prices, were pushing cultivators to the brink. The chamber warned that this squeeze signalled a 'deliberate destruction' of the agricultural sector and called on the authorities to reverse the price hikes on diesel, fertiliser, seeds and pesticides immediately. Farmers were urged to register for the government's Benazir Hari Card via local administrative offices to access welfare benefits. The chamber also demanded that existing subsidies of PKR 10,000 per acre– currently applied to sunflower and canola– be extended to mustard and rapeseed crops as well. STORY CONTINUES BELOW THIS AD The meeting included senior figures from Sindh's farming leadership, including Sindh Irrigation and Drainage Authority Chairman Kabool Khatian, general secretary Zahid Bhurgari and agricultural organisers from across the province.
Zawya
2 hours ago
- Business
- Zawya
Kenya's debt costs to remain high due to local borrowing, Moody's says
Kenya's cost of servicing its debts is expected to remain stubbornly high, ratings agency Moody's said on Wednesday, as the government leans on the domestic debt market to fund its budget shortfalls. The East African nation has one of the highest debt interest costs to revenue ratio in the world, Moody's said, and spends a third of government revenue on settling interest payments. "Kenya will rely predominantly on the domestic market to meet its fiscal financing needs with approximately two-thirds of its financing, or just under 4% of GDP per year, from domestic sources," the agency said in an issuer report. "This reliance will continue to weigh on debt affordability, a key constraint in Kenya's credit profile." Finance Minister John Mbadi set the government's fiscal deficit for the financial year starting this month at 4.8% of economic output, narrower than the 2024/25 deficit of 5.7%, when he presented the budget to parliament last month. But Moody's said that target could slip as the government confronts acute fiscal pressures. "Kenya's revenue generation capacity remains structurally weak," Moody's said, citing missed revenue collection targets. The government needs to secure a new financing programme with the International Monetary Fund, the ratings agency said, to help it deal with annual external debt repayments that stand at $3.5 billion on average. The government will hold another round of talks with IMF officials in September in a bid to clinch the programme, the central bank chief Kamau Thugge said last month. "A successful IMF programme could anchor investor confidence and reduce external borrowing costs," Moody's said.
News18
3 hours ago
- Business
- News18
India On Track To Become Third-Largest Economy By 2028: Morgan Stanley
India is expected to more than double its GDP to $10.6 trillion by 2035, and three-five states might approach the $1 trillion GDP mark, says Morgan Stanley. India is on track to become the world's third-largest economy by 2028 and more than double its GDP to $10.6 trillion by 2035, according to the latest report by Morgan Stanley released on Wednesday. The report also highlighted the pivotal role that Indian states will play in steering this economic transformation. It said that by 2035, three to five Indian states — including Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnataka — are projected to approach the $1 trillion GDP mark, putting them among the world's top 20 economies in their own right. 'Based on the latest data, the top three states are Maharashtra, Gujarat, and Telangana," the report noted. It further highlighted Chhattisgarh, Uttar Pradesh, and Madhya Pradesh as the states that have shown the most significant improvement in economic rankings over the past five years. Over the next decade, India is expected to contribute 20% to global growth, becoming a major engine for earnings among multinational corporations, the report said. Morgan Stanley economists emphasized the importance of India's 28 states and eight Union Territories in achieving this ambitious growth. 'States not only manage their own finances but also compete for investments by designing policies and easing business conditions. Ultimately, every factory or business is set up in a specific state," the report stated. The report credited the progress to 'competitive federalism," where states operate with significant legislative and political autonomy, enabling them to frame their own industrial policies and compete for investments. The success of this model, it added, will determine India's rise as a global manufacturing hub, its ability to double per capita income within seven years, and whether it can sustain its capital market momentum. Over the last decade, India has significantly increased infrastructure investment. The Centre's capital expenditure has risen from 1.6% of GDP in FY15 to 3.2% in FY25, spurring major improvements in transportation and logistics. Highway networks have expanded by 60%, the number of airports has doubled, and metro systems have grown fourfold. These developments have been driven by major central schemes such as PM Gati Shakti, the National Infrastructure Pipeline, Bharatmala, Sagarmala, and UDAN, which have been executed alongside state-led initiatives. States also lead infrastructure spending in areas like power, water, and urban development. 'The Centre and states must continue to collaborate closely to meet India's economic ambitions," the report concluded. India has already surpassed Japan to become the world's fourth-largest economy according to IMF data, NITI Aayog CEO BVR Subrahmanyam announced in May 2025. According to the IMF, India's GDP is currently $4.187 trillion, overtaking Japan's $4.186 trillion. Meanwhile, a recent report by JP Morgan said India has emerged as a relatively safe haven among emerging markets (EMs) amid global trade uncertainties. The report highlighted that India is benefiting from a combination of falling inflation, improved system liquidity, and lower government borrowing, which are expected to support economic growth. The report adds that India is expected to post the highest GDP growth among countries in JP Morgan's global universe in 2025. Growth is also being supported by timely demand stimulus and measures that have strengthened urban household balance sheets. In addition, a recovery in the rural economy, further aided by a favourable monsoon, is adding to the positive outlook. It stated, 'India: Falling inflation, enhanced system liquidity and lower borrowing to boost growth. Timely demand stimulus and support to urban household balance sheet". JP Morgan's emerging markets strategists are constructive on several emerging market countries, including India, Korea, Brazil, Philippines, UAE, Greece, and Poland. Among these, India holds a 19 per cent weight in the MSCI EM Index and has been rated 'Overweight" (OW) by JP Morgan. tags : indian economy view comments Location : New Delhi, India, India First Published: July 23, 2025, 17:55 IST News business » economy India On Track To Become Third-Largest Economy By 2028: Morgan Stanley Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
