Latest news with #IMF
Bloomberg
an hour ago
- Business
- Bloomberg
Poland Economic Juggernaut Gets a Reality Check
Hi, this is Piotr Skolimowski in Warsaw. Welcome to our weekly newsletter on what's shaping economics and investments from the Baltic Sea to the Balkans. You can subscribe here. Poland's unexpected election nail-biter looks at odds with the rude health of its economy. Billions of euros in European Union aid have helped transform the way Poles live. The IMF predicts Poland's per-capita GDP adjusted for purchasing power will overtake Japan's this year.
Sydney Morning Herald
4 hours ago
- Business
- Sydney Morning Herald
Australia can't just let Trump do what he wants
But there's also a chance Trump's tariffs will be waved through on appeal, further worsening worldwide economic growth. As Kennedy points out, the International Monetary Fund (IMF) recently slashed its forecast for global economic growth from 3.3 per cent to 2.8 per cent this year. While its forecasts for the Chinese and US economies both took an especially large hit (the tariff escalation is most intense between these two, after all), it's actually China, not the US, that will have a bigger knock-on effect on other countries if the trade war continues. 'Outside of the years affected by COVID-19, China has contributed more to world growth than the G7 since 2006, and more than the US since 2001,' Kennedy says. Australia, which does a third of its trade with China, would, of course, be especially vulnerable. Less growth in China, and thus less demand for Australia's exports (things such as iron ore, beef and coal) from our biggest trading partner, would weaken domestic growth. That's on top of the dampening effect of uncertainty on Australian household spending and business investment spending. A weaker Australian economy would mean less hiring by businesses, fewer Australians holding down jobs, and slower wage growth. One glimmer of hope is that price increases would probably slow a little. Wouldn't tariffs wreak havoc on supply chains and push up inflation? Well, probably. But Kennedy says that's likely to be offset by more low-cost output from China making its way to us as its trade is redirected from the US. While Australia is caught in the crosshairs of a fight it didn't start – or want to participate in – we don't have to let Trump's unpredictability take our economy off track. Since Australia trades very little with the US, Trump's tariffs on Australia – if they resumed – wouldn't be a huge worry. 'The indirect impact [of tariffs] is nearly four times as large as the direct effect,' Kennedy says. So, what can we do? Well, Australia's decision not to hit back with our own tariffs is a good start. There's very little point in stoking Trump's ire when we have little to gain (and plenty to lose) from imposing tariffs. The main effect would be to make American imports costlier for Australians, which would just end up hurting our hip pocket. Another thing we can do is make the most of the chaos by positioning ourselves as a safe, stable and attractive place to invest in as people pull their money out of the US. A 'pick me' strategy? Perhaps, but it's a good idea. The Trump administration has made it clear that it wants to reshape the economic order and kick China down a few rungs. US imports from China have fallen steadily from their peak of about one-fifth of total imports in 2017 during Trump's first term to just over one-tenth in 2024. But Trump has also made it obvious he doesn't care who he hurts in doing so. Kennedy says Australians will have to adjust to this reality through policy changes. While the US seems to be raising its walls (after failing to build a physical one on its southern border some years ago) and trying to become more self-reliant, Kennedy says following the same strategy is a mistake for smaller countries including Australia that benefit greatly from trade. Loading 'It is not in our self-interest to respond by also raising barriers,' he says. Instead, we should be going the opposite way: removing barriers to trade, and turning to a wider array of trade partners. Kennedy points to the Australian government's renewed negotiations with the European Union on a free trade agreement, and efforts to expand existing compacts such as the Progressive Agreement for Trans-Pacific Partnership – both of which make it easier to trade. Striking new trade agreements and looking to our neighbours, too, in countries such as Indonesia and India will be hugely beneficial, especially as these countries continue to grow and themselves look for reliable trade partners outside the US. As Kennedy says, we're facing more than the usual degree of uncertainty, but it may be time to stop saying that and accept that, for the foreseeable future, the world will be characterised by it. While Australia is caught in the crosshairs of a fight it didn't start – or want to participate in – we don't have to let Trump's unpredictability take our economy off track.
The Age
4 hours ago
- Business
- The Age
Australia can't just let Trump do what he wants
But there's also a chance Trump's tariffs will be waved through on appeal, further worsening worldwide economic growth. As Kennedy points out, the International Monetary Fund (IMF) recently slashed its forecast for global economic growth from 3.3 per cent to 2.8 per cent this year. While its forecasts for the Chinese and US economies both took an especially large hit (the tariff escalation is most intense between these two, after all), it's actually China, not the US, that will have a bigger knock-on effect on other countries if the trade war continues. 'Outside of the years affected by COVID-19, China has contributed more to world growth than the G7 since 2006, and more than the US since 2001,' Kennedy says. Australia, which does a third of its trade with China, would, of course, be especially vulnerable. Less growth in China, and thus less demand for Australia's exports (things such as iron ore, beef and coal) from our biggest trading partner, would weaken domestic growth. That's on top of the dampening effect of uncertainty on Australian household spending and business investment spending. A weaker Australian economy would mean less hiring by businesses, fewer Australians holding down jobs, and slower wage growth. One glimmer of hope is that price increases would probably slow a little. Wouldn't tariffs wreak havoc on supply chains and push up inflation? Well, probably. But Kennedy says that's likely to be offset by more low-cost output from China making its way to us as its trade is redirected from the US. While Australia is caught in the crosshairs of a fight it didn't start – or want to participate in – we don't have to let Trump's unpredictability take our economy off track. Since Australia trades very little with the US, Trump's tariffs on Australia – if they resumed – wouldn't be a huge worry. 'The indirect impact [of tariffs] is nearly four times as large as the direct effect,' Kennedy says. So, what can we do? Well, Australia's decision not to hit back with our own tariffs is a good start. There's very little point in stoking Trump's ire when we have little to gain (and plenty to lose) from imposing tariffs. The main effect would be to make American imports costlier for Australians, which would just end up hurting our hip pocket. Another thing we can do is make the most of the chaos by positioning ourselves as a safe, stable and attractive place to invest in as people pull their money out of the US. A 'pick me' strategy? Perhaps, but it's a good idea. The Trump administration has made it clear that it wants to reshape the economic order and kick China down a few rungs. US imports from China have fallen steadily from their peak of about one-fifth of total imports in 2017 during Trump's first term to just over one-tenth in 2024. But Trump has also made it obvious he doesn't care who he hurts in doing so. Kennedy says Australians will have to adjust to this reality through policy changes. While the US seems to be raising its walls (after failing to build a physical one on its southern border some years ago) and trying to become more self-reliant, Kennedy says following the same strategy is a mistake for smaller countries including Australia that benefit greatly from trade. Loading 'It is not in our self-interest to respond by also raising barriers,' he says. Instead, we should be going the opposite way: removing barriers to trade, and turning to a wider array of trade partners. Kennedy points to the Australian government's renewed negotiations with the European Union on a free trade agreement, and efforts to expand existing compacts such as the Progressive Agreement for Trans-Pacific Partnership – both of which make it easier to trade. Striking new trade agreements and looking to our neighbours, too, in countries such as Indonesia and India will be hugely beneficial, especially as these countries continue to grow and themselves look for reliable trade partners outside the US. As Kennedy says, we're facing more than the usual degree of uncertainty, but it may be time to stop saying that and accept that, for the foreseeable future, the world will be characterised by it. While Australia is caught in the crosshairs of a fight it didn't start – or want to participate in – we don't have to let Trump's unpredictability take our economy off track.
Mint
4 hours ago
- Entertainment
- Mint
Tom Cruise shares heartfelt note, inside glimpses of Mission Impossible's 30-year journey
Tom Cruise shares heartfelt note, inside glimpses of Mission Impossible's 30-year journey | In pics 20 Photos . Updated: 30 May 2025, 06:50 AM IST Share Via Hollywood actor Tom Cruise shared a heartfelt note and glimpses of his 30-year journey working with the Mission Impossible franchise. He expressed gratitude after the final and latest instalment 'Mission: Impossible – The Final Reckoning' massive success. 1/20The caption to opening pic states, 'Over 30 years ago, I began the journey of producing my first film, Mission: Impossible. Since then, these eight films have taken me on the adventure of a lifetime.' (X @Tom Cruise) 2/20Few days ago, Tom Cruise expressed his gratitude and acknowleded the impressive performance of his latest Mission Impossible 8 during the weekend and thanked everyone involved. (X @Tom Cruise) 3/20'Mission: Impossible - The Final Reckoning' is the latest instalment in the Mission: Impossible franchise, starring Tom Cruise as Ethan Hunt. (X @Tom Cruise) 4/20Mission Impossible 8 was released in multiple languages and has performed exceptionally well at the Indian box office as it became the biggest Hollywood opener of the year. (X @Tom Cruise) 5/20Tom Cruise (X @Tom Cruise) 6/20Tom Cruise (X @Tom Cruise) 7/20Tom Cruise 8/20Tom Cruise 9/20Tom Cruise 10/20Tom Cruise 11/20Mission Impossible 8 was released in India on May 17 in multiple languages, including English, Hindi, Tamil, and Telugu. (X @Tom Cruise) 12/20Tom Cruise 13/20Tom Cruise 14/20Tom Cruise 15/20Mission Impossible 8 centres around the lead character Ethan Hunt and the IMF team racing against time to stop a rogue AI entity from destroying humanity. (X @Tom Cruise) 16/20In the eighth franchise of final instalment of Mission Impossible, directed by Christopher McQuarrie, Tom Cruise filmed a scene walking on the wing of a small biplane mid-air. (X @Tom Cruise) 17/20Mission: Impossible – The Final Reckoning stars Hayley Atwell, Pom Klementieff, Mariela Garriga, and Esai Morales, besides Tom Cruise. (x @Tom Cruise) 18/20Mission: Impossible 8 had a strong global opening, earning over $77 million in the US and $190 million globally. (X @Tom Cruise) 19/20The caption to this post states, 'To the incredible directors, actors, artists, and crews across the globe that have helped bring these stories to life, I thank you. It has been a privilege to work alongside you all.' (X @Tom Cruise)
Business Recorder
5 hours ago
- Business
- Business Recorder
Budget: time for respite & reform
Pakistan has shown signs of overall stabilisation, supported by improved fiscal performance, strengthened external account, and receding inflation. Revenue Mobilization and restrained current spending have contributed to a narrower fiscal deficit and a surplus primary balance. The current account registered a higher surplus, driven by remittances and export growth, while reserves have improved, and the exchange rate remains stable, aligned with the market. Inflation has reduced to its lowest level, creating space for a more supportive monetary policy in upcoming months. Although overall industrial activity remained weak. However, automobiles and export-oriented sub-sectors showed an impressive performance. Social protection and climate finance initiatives are progressing, reinforcing the path toward inclusive and sustainable growth. Economic Update & Outlook- April – 2025, Government of Pakistan, Ministry of Finance The budget for fiscal year (FY) 2025–26, to be presented on June 10, 2025, is set against a backdrop of critical reforms, macroeconomic recovery, and renewed commitments to fiscal discipline. The International Monetary Fund (IMF), concluding its staff visit of Islamabad, headed by Nathan Porter, has provided a direction for budget formulation and broader economic restructuring. Engaged in serious dialogue and detailed consultations with Pakistan's federal and provincial authorities, the IMF mission outlined contours of the new fiscal framework, macroeconomic objectives, and structural reforms. The mission acknowledged satisfactory progress and laid out stringent conditions under the US$ 7 billion 37-month Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) programmes. IMF's EFF programme's primary objective is to achieve a primary surplus of 1.6 percent of GDP in FY2026 through robust revenue generation and prioritized expenditure, urging on enhancement in tax compliance, broadening of tax base and rationalization of fiscal spending. The strategic framework agreed upon during this mission now defines the configurations of Pakistan's forthcoming budget, making it a cornerstone of economic recovery and international confidence. IMF's recommendations centered on revenue generation without undermining inclusive growth. Emphasis on expanding the tax base through policy and administrative measures echoed the need to transition from narrow, burdensome taxation to a more equitable and growth-oriented regime. The Pakistani authorities were advised to limit untargeted subsidies, curtail wasteful expenditures, and ensure targeted social protection. The IMF reinforced the importance of sound macroeconomic policies including maintaining a tight and data-driven monetary stance. State Bank of Pakistan's (SBP's) objective to keep inflation at a minimum level was endorsed, and a flexible exchange rate regime was deemed critical to managing external shocks and rebuilding reserve buffers. Focus on energy sector reform also featured prominently, particularly addressing ineptitudes in tariff structures, reducing system losses, and ensuring cost-recovery pricing. The fiscal framework was required not only to meet debt sustainability metrics but also to enable pro-investment policies that promote long-term economic stability and job creation. IMF's reform recommendations aligned with Pakistan's economic data reveals both progress and persisting structural flaws. April 2025 Economic Update issued by the Ministry of Finance offers insight into these dynamics. The macroeconomic indicators have shown signs of recovery. Improved revenue performance, moderated inflation, and current account surplus suggest that the economy is gradually transitioning from a crisis management phase to a recovery path. Fiscal deficit for Jul-Feb FY2025 declined to 2.2 percent of GDP, while primary surplus stood at 3 percent of GDP, indicating prudent fiscal management. Revenue receipts grew by 43.3 percent year-on-year, with a substantial 73 percent surge in non-tax revenues. The Federal Board of Revenue (FBR) collected, after blocking refunds and taking advances not yet due, Rs. 8.45 trillion during Jul-Mar FY2025, reflecting a 25.9 percent increase (sic) as compared to corresponding period of last year. These improvements offer fiscal space that can be strategically directed towards productive expenditure. The monetary side remains cautiously supportive. Inflation, which stood at 20.7 percent in March 2024, declined sharply to 0.7 percent year-on-year by March 2025, a multi-decade low. Decline in inflation provides policy room for easing monetary conditions, potentially reducing interest burden and supporting credit flows to the private sector. SBP's foreign exchange reserves reached US$10.6 billion as of April 2025, contributing to total reserves of US$15.7 billion. The current account posted a US$1.9 billion surplus, supported by export recovery and a record US$28 billion in remittances. These figures highlight a restored balance of payments discipline and reduced reliance on external borrowing. The industrial sector presents a mixed picture. Large-scale manufacturing (LSM) output remained under pressure with a decline of 1.9 percent in Jul-Feb FY2025. However, segments such as textiles, apparel, and petroleum products showed resilience. The automobile sector registered significant growth in production, indicating that selective industrial recovery is underway. Cement exports grew by 28.1 percent despite weak domestic demand. These sectoral trends underline the importance of targeted incentives and consistent energy supply to stimulate broader industrial revival. The agricultural sector, often overlooked in fiscal prioritization, displayed its strength during the Rabi season. Wheat was cultivated on over 22 million acres with an estimated output of 27.9 million tonnes. Agricultural credit disbursement rose by 15.4 percent while imports of agricultural machinery surged by 40.5 percent. The above trends in agricultural sector reflect early success in mechanization and access to input, supporting the argument for increased public investment in rural productivity. Data from the update supports IMF's call to expand the agricultural tax net, which remains a politically sensitive but economically necessary reform. The external sector's performance supports confidence. Exports rose 7.7 percent to US$24.7 billion, led by garments and textiles, while IT exports surged by 23.7 percent to US$2.8 billion. Remittance inflows showed robust growth from key corridors such as Saudi Arabia and the United Arab Emirates (UAE). Foreign direct investment (FDI) increased by 14 percent, reaching US$1.6 billion, primarily in financial services, energy, oil and gas. Stock exchange index crossed 117,000 points in March, driven by positive investor sentiment. These trends reflect growing market confidence, aided by macroeconomic stabilisation and policy predictability. IMF's emphasis on rebuilding investor confidence is thus partially validated by these developments. IMF's concern about energy sector inefficiencies is well-placed. The high cost of power generation, transmission losses, and circular debt accumulation have long undermined competitiveness. The budget must respond with a roadmap for tariff rationalization, elimination of cross-subsidies, and improved governance of distribution companies. Power sector reforms must go beyond pricing to address theft, billing inefficiencies, and lack of investment in renewable energy. IMF's emphasis for cost recovery-based pricing and legislative changes for levies must be operationalized in this budget cycle. Resilience of the social protection system was also recognized. The government spent Rs 347 billion under Benazir Income Support Programme (BISP) during Jul-Feb FY2025, representing an 82.6 percent increase over the previous year reflecting the commitment to shielding vulnerable households, in line with IMF's directions on protecting priority expenditures. Continuity of inflation-linked transfers under the Kafaalat programme must be embedded in the budgetary framework. Integration of digital tools in welfare delivery should be expanded to improve targeting and transparency. The budget must now transform these policy directions and macroeconomic signals into actionable proposals. Priority should be broadening tax base through digitization and enforcement. The FBR should diligently enforce digital invoicing, inter-agency data sharing, and AI-based risk profiling to enhance compliance. The large undocumented segments in retail, real estate, and agriculture must be brought under the tax net. Simplification of tax procedures, reduction in litigation, and automation of refunds will improve compliance and reduce resistance. The second priority should be providing relief to the salaried class. Inflation has eroded real incomes, and relief must be extended through upward revision of tax slabs and introduction of indexation. The withholding and advance tax mechanisms must be streamlined to prevent excess collection and delays in refund. The burden of indirect taxes such as General Sales Tax (GST) disproportionately affects fixed-income households. Reduction of sales tax rates, particularly on essential items and utilities, must be considered. The fiscal space generated by non-tax revenues and improved FBR performance offers room for targeted tax relief. The third priority is energy sector reform. The budget should announce a timeline for tariff rebasing, reduction of subsidies, and modernization of grid infrastructure. Investment in smart metering and solar integration must be scaled up to reduce technical losses. The use of petroleum levy must be linked to infrastructure investment in the energy sector rather than general revenue needs. Structural bottlenecks in the energy sector directly affect industry competitiveness and must be addressed holistically. The fourth priority is stimulating GDP growth through public development spending and private investment. The Public Sector Development Programme must prioritize high-yield projects with employment impact, especially in transport, housing, and rural connectivity. Private sector participation in infrastructure through public-private partnerships should be incentivized via fiscal guarantees and tax relief. The budget must facilitate credit to small and medium enterprises (SMEs) through interest subvention and guarantee schemes. The government should allocate funds for technology parks, export clusters, and skill training to support job creation and competitiveness. The fifth priority is building external resilience. The budget must aim to support export diversification through sector-specific incentives and simplification of export procedures. Foreign exchange reserves should be improved by retaining remittance inflows through formal channels via attractive saving instruments. The incentives for FDI should include tax holidays, contract enforcement guarantees, and repatriation ease. The Board of Investment must be allocated resources for aggressive outreach and facilitation. The sixth priority must be institutional reform. The budget must include allocations for digitization of land records, integration of National Database & Registration Authority (NADRA) with economic databases and strengthening of regulatory bodies. The anti-corruption agencies must be funded to improve accountability in public spending. IMF's insistence for governance diagnostics must translate into budgetary measures that strengthen institutions and restore public trust. Budget for FY2025–26 should not be merely a fiscal document, but a test of political will and administrative capability. IMF's confidence, validated by completion of the first EFF review and RSF approval, presents a unique window for reforms. The economic data shows promise, but the transition from stabilisation to growth requires sustained effort. The public expects meaningful relief, the markets expect clarity, and the international community expects reform. The budget must deliver all three. The government has an opportunity to use this budget as a platform for transformation. Clarity of priorities, alignment with global institutions, and responsiveness to domestic needs can together chart a sustainable economic path. The time for incrementalism is over. The moment calls for ambition, discipline, and action. The future of Pakistan's economy may well be written in the pages of the FY2025–26 budget. (Huzaima Bukhari & Dr Ikramul Haq, lawyers and partners of Huzaima & Ikram, are Adjunct Faculty at Lahore University of Management Sciences (LUMS), members Advisory Board and Visiting Senior Fellows of Pakistan Institute of Development Economics (PIDE) and Abdul Rauf Shakoori is a corporate lawyer) Copyright Business Recorder, 2025
