Entries in International Monetary Fund (4)


International Monetary Fund Lowers Global Growth Forecast for 2012

Comstock Images/Thinkstock(NEW YORK) -- More than ever the U.S. is part of the global economy, with millions of American workers depending on jobs linked to imports and exports.  

But a new warning that the world's economy has weakened further could mean a slowdown for global trade and the biggest threat out there to American jobs.

In its latest update, the International Monetary Fund forecasts global growth of 3.3 percent this year -- down from an estimate of nearly 4 percent just three months ago.  Slower growth is also forecast for 2013.

"Risks for a serious global slowdown are alarmingly high," says the IMF's World Economic Outlook.

The report comes one day after a forecast of a deepening slowdown in China, the world's second largest economy.  India -- another engine of growth -- is also facing a serious slowdown. 

Copyright 2012 ABC News Radio


Greece Seeks at Least Two-Year Extension on Bailout 

iStockphoto/Thinkstock(NEW YORK) -- A policy document drafted by Greece's governing coalition says the country will seek at least a two-year extension from its creditors for the bailout program, Bloomberg News reports.

A document received in an email from the Greek government on Saturday shows that New Democracy, Pasok and the Democratic Left agree to eliminate plans to cut 150,000 public-sector jobs. It also included proposals to reduce sales tax for bars, restaurants, cafes and the agricultural industry and raise the income tax limit, Bloomberg says.

The New Democracy party won the nation's general election on June 17 on promises to renegotiate parts of the $163 billion bailout from the European Union and International Monetary Fund and keep Greece in the euro. Pasok and the Democratic Left then joined the winning party to form the new government coalition.

Copyright 2012 ABC News Radio


What is the International Monetary Fund?

JEWEL SAMAD/AFP/Getty Images(WASHINGTON) -- The organization headed by Dominique Strauss-Kahn is one of the most important but least understood players in the world of international finance.

The International Monetary Fund is an inter-governmental organization charged with keeping the global financial system intact and functioning. Founded after World War II to build a working international system for currency exchange and to avert economic crises, the Washington, D.C.-based IMF currently counts some 187 countries amongst its membership.

The Fund has deposits from member countries -- commonly called "quotas" -- totaling some $340 billion, with additional commitments for about $600 billion from member governments should the funds be needed. Quota requirements are determined by the size of the member country's economy. So the United States, with a $14 trillion GDP, is the biggest contributor with about 18 percent of the quotas.

They provide loans to member countries which are facing currency shortfalls or economic trouble. The most recent administrative report, out at the end of January, shows that the IMF has about $254 billion in loans committed today (only $64 billion of which has actually been deployed). The biggest borrowers are Romania, Ukraine, and Greece.

These loans come with strings attached. Typically, a country could get assistance from the IMF, but it would be required to embark on a series of monitored economic reforms over a period of years.

The organization says it funds its administration and overhead through the interest borrowing states pay on the loans they take.

In addition to actual loans, the IMF provides standardized economic data and statistics, surveillance of current economic conditions, and consultation for member countries facing economic hardship.

The organization, which has seen Europeans in the top leadership spot of its Executive Board since its founding in the 1940s, has representatives from every member country on its Board of Governors, which meets once a year. The IMF is currently undergoing a series of reforms which would make appointments to its top executive positions more democratic.

Copyright 2011 ABC News Radio


Portugal Adopts Draconian Budget Cuts, Tries to Avoid Bailout

Photo Courtesy - Getty Images(LISBON, Portugal) -- Portugal tried desperately Friday to avoid following Ireland in requiring a financial bailout, adopting a budget designed to slash its deepening deficit and prevent fiscal meltdown.  The Portuguese parliament adopted the 2011 plan lawmakers hope will reduce its deficit from 7.3 percent of this year's annual output to 4.6 percent next year. 

Portugal's Finance Minister, Fernando Teixeira dos Santos, told lawmakers the entire euro zone faces a big challenge.  "The attack of the markets on sovereign debt, in particular against so-called peripheral countries, is a test of the willpower and the capacity of the countries targeted, but above all the euro zone to face up to the crisis."

The budget would save five billion euros, or nearly $7 billion, through tax hikes and spending cuts.  Among the targeted spending, wages of public workers.  That prompted a massive general strike on Wednesday.

Portuguese officials and leaders from other countries deny there is specific pressure on Portugal to accept the same kind of "bailout" Ireland requested just days ago from the European Union and the International Monetary Fund.  Experts suggest that if Portugal did ask for help, it would ease the financial pressure on other countries, such as Spain, and perhaps keep the euro zone debt crisis from spiralling further out of control.

Copyright 2010 ABC News Radio

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