Latest news with #IMF-WorldBankSpringMeetings
Newsweek
06-05-2025
- Business
- Newsweek
Rethinking Development Finance in a Geoeconomic World Order
Advocates for ideas and draws conclusions based on the interpretation of facts and data. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The recent annual IMF-World Bank Spring Meetings convened the world's leading economists and policymakers in Washington, D.C. What was once regarded as a vital forum to discuss global economic projections and future planning, was overcome by a profound sense of trepidation this year. As of 2025, the annual financing gap for achieving the sustainable development goals (SDGs) stands at $4.2 trillion. But amid escalating trade wars, adversarial geoeconomics, and market uncertainty, one crucial argument remains overlooked: the path forward demands confronting the root causes of a broken system. Under the theme "Jobs, the path to prosperity," the gathering in Washington appeared to revert back to outdated macroeconomic models rather than addressing the structural challenges facing low-to-middle income countries (LMICs). In Africa alone, external debt levels increased by a staggering 240 percent between 2008-2022. By 2023, the debt burdens of LMICs reached an unprecedented $8.8 trillion, forcing more than 12 states to default on payments while plunging 30 of the world's poorest countries into "debt distress." The International Monetary Fund (IMF) building sign is viewed in Washington, D.C. The International Monetary Fund (IMF) building sign is viewed in Washington, D.C. KAREN BLEIER/AFP via Getty Images Recommendations from leading international financial institutions (IFIs) must go beyond the fiscal levers of austerity and deregulation if we are to pursue the "path to prosperity." Especially when considering that over 3.3 billion people (approximately 40 percent of the global population) live in countries where more is spent on interest payments than on basic services like education or health care. Over the past three months, the global economic order has faced a moment of reckoning. With a new series of market shocks and tariffs, LMICs have yet again, and through no fault of their own, been left to foot the bill. From a deepening debt crisis to building economic resilience, the existing financial architecture has failed developing economies. Development Finance in a Geoeconomic World Order As the world continues to grapple with the impact of slashed overseas development budgets, the simple truth is that aid alone will not suffice. Even if wealthier states commit to the 0.7 percent of gross national income (GNI) target toward official development assistance (ODA), we will still need to break the vicious debt-cycle and create breathing room for longer-term investments that tackle development challenges. By lowering the cost of borrowing, emerging economies can confront core issues like reducing inequality while enhancing the quality of basic services like education, energy, and health care. Multilateral development banks (MDBs) will also need to dramatically scale up their financial capacity. By implementing an improved G20 Capital Adequacy Framework, deploying blended capital instruments, and reallocating $100 billion from G20 countries' IMF Special Drawing Rights (SDRs)—MDBs could mobilize at least $300 billion annually in affordable financing by 2030. The entire global financial ecosystem must also deliver on the landmark $100 billion pledge to provide the poorest countries with concessional loans under The International Development Association (IDA). The list goes on when it comes to possible solutions, from debt swaps to emergency pause clauses and concessional loans. There is need to adapt metrics and analytical tools to better reflect the structural hurdles of developing countries but also their potential. Ultimately, the challenge lies in overcoming institutional rigidity to mobilize the vast potential of the multilateral system to bridge crucial financing gaps. As evidenced by the outcomes of the recent ECOSOC Forum on Financing for Development in April, systemic reform will be the defining factor. The Path Forward: Translating Commitments to Action This year, the IMF's latest World Economic Outlook delivered a sobering assessment, where global growth projections dropped by 0.5 percentage points. As world leaders contend with a new geoeconomic order, countries will need to compete not only for territory or political influence but for market access and financial stability. And so, the world simply can no longer afford to lose sight of development finance, especially at a time when it could not be more vital. In June, world leaders and financial institutions will have an opportunity to translate commitments into decisive action at the landmark 4th International Conference on Financing for Development in Sevilla, Spain. Preparatory Committee Sessions in New York are already laying the groundwork for what could be a renewed financing framework for sustainable development. This conference is not about politicizing aid and development, but rather about recognizing what is at stake for everyone. History has repeatedly shown us how extreme poverty and deepening inequalities in lower-income countries can escalate into full blown security crises. While leaders navigate a changing world order, confronting the development crisis must go beyond rhetoric and address the structural drivers of global inequality. Innovative solutions go far beyond principles of effective multilateralism, they are a necessity for its evolution and more importantly—its survival. María Fernanda Espinosa, former president of the 73rd U.N. General Assembly and Ecuador's minister of foreign affairs and national defense, now leads GWL Voices as executive director. With over 30 years in academia and international diplomacy, Espinosa is a recognized authority on global governance. The views expressed in this article are the writer's own.
Bloomberg
28-04-2025
- Business
- Bloomberg
Angola Explores IMF Financing as Bond Yields Soar on Oil Slump
Angola held talks with the International Monetary Fund last week about possible financing packages, its finance minister said, as trade wars and a slump in energy prices effectively shut the oil producer out of international bond markets. 'We didn't ask it formally — we were just trying to understand and explore what financial options we can have,' Finance Minister Vera Daves de Sousa said in an interview on Friday in Washington, where she was attending the IMF-World Bank Spring Meetings.
CNBC
28-04-2025
- Business
- CNBC
German fiscal boost won't outweigh tariff drag for euro zone, IMF's Europe head says
Higher German infrastructure spending will boost Europe's economic growth in the coming years — but not enough to outweigh the expected drag from U.S. tariffs, according to Alfred Kammer, director of the European department at the International Monetary Fund. The IMF last week cut its growth outlook for the euro area, also making downgrades for the U.S., U.K. and many Asian countries due to President Donald Trump's volatile tariff policy. The institution cut its euro area growth forecasts for each of the next two years by 0.2 percentage points, to 0.8% in 2025 and 1.2% in 2026. "It's the tariffs and the trade tensions which weigh on the outlook rather than the positive effects on the fiscal side," Kammer told CNBC's Carolin Roth in an interview at the IMF-World Bank Spring Meetings last week. "What we see is we have a meaningful downgrade for Europe advanced economies... and for the emerging euro area countries double as much over this two-year period." The negative impact of tariffs will be slightly offset by Germany's recent infrastructure spending bill, which will boost growth in the euro area over those two years, Kammer said. Exemptions passed to Germany's longstanding debt rules have unlocked higher defense spending and enabled creation of a 500 billion euro ($548 billion) infrastructure and climate fund. The move has been described by economists as a potential "game changer" for the sluggish economy — the largest in the euro zone. However, optimism has been shaken by U.S. tariffs, which are widely expected to dampen global growth and trade flows. Several policymakers at the European Central Bank told CNBC last week that while the inflation path appeared positive — with tariffs potentially bringing inflation in the bloc down further — their broader outlook was now significantly more uncertain. The IMF's Kammer said that the ECB should only cut interest rates once more this year, by a quarter percentage point, despite growth risks. The ECB has so far reduced rates seven times in quarter-percentage-point increments, starting in June 2024. Its most recent move lower in April took the deposit facility, its key rate, to 2.25%. "We have a very clear recommendation for the ECB. What we saw so far is a huge success in the disinflation effort and monetary policy has worked ... so we are expecting to sustainably hit the 2% inflation target in the second half of 2025," Kammer told CNBC. "Our recommendation is there is room for one more 25-basis-point cut, in the summer, and then the ECB should hold that 2% policy rate unless major shocks hit and there is a need for recalibrating monetary policy," he added. Overnight index swap pricing on Monday pointed to market expectations for two more quarter-point cuts this year.
Arab News
26-04-2025
- Business
- Arab News
Pakistan's forex reserves triple since early 2023 as central bank targets $14 billion
KARACHI: Pakistan's foreign exchange reserves have more than tripled since early 2023, driven by a surplus in the external current account rather than fresh borrowing, the top central bank official said, according to a statement on Saturday, as the country targets $14 billion in reserves by June. Pakistan's forex reserves had touched critically low levels two years ago, giving it an import cover of less than a month. Faced with the threat of a sovereign debt default, the country secured a $3 billion short-term International Monetary Fund (IMF) bailout, tightened fiscal and monetary policies, restricted imports and allowed greater exchange rate flexibility. Governor of the State Bank of Pakistan, Jameel Ahmad, told senior executives from global financial and investment institutions on the sidelines of the IMF-World Bank Spring Meetings in Washington the country's external buffers had seen a 'substantial qualitative as well as quantitative improvement' since then, as he briefed them about the current economic situation. 'Unlike previous episodes of reserve build-up, the ongoing rise in external buffers is not due to any further accumulation of external debt,' he said. 'In fact, Pakistan's public sector external debt, both in absolute terms and as a percent of GDP, has declined since June 2022.' Ahmad added that the central bank had been able to strengthen reserves through foreign exchange purchases in the open market, supported by a current account surplus. 'The SBP is targeting to increase [forex] reserves to $14 billion by June 2025,' he said. Ahmad said Pakistan had made tangible progress in stabilizing its economy, crediting a prudent monetary policy and sustained fiscal consolidation efforts for the improvement. He informed that headline inflation had declined sharply over the past two years, reaching a multi-decade low of 0.7 percent in March 2025, while core inflation had also dropped from above 22 percent to a single digit and was expected to moderate further in the coming months.
Bloomberg
25-04-2025
- Business
- Bloomberg
Bloomberg UK Politics: Reeves Goes To Washington
The Chancellor Rachel Reeves has been making the case for free trade in Washington at the IMF-World Bank Spring Meetings, using Britain's stability as a selling point. But Reeves also said Donald Trump has a point about the global trade system, as she meets key US officials. We discuss the Chancellor's trip and what it means for Britain's international relations with Bloomberg editorial board member Therese Raphael. Hosted by Stephen Carroll and Lizzy Burden.
