OVERVIEW & GLOBAL FINANCIAL EFFECTS OF IMF

International Monetary Fund

Abbreviation: IMF,FMI Formation: Formally December 27, 1945 (1945-12-27) (67 years ago) Actually March 1, 1947 (1947-03-01) (66 years ago) Type: International Economic Organization Headquarters: Washington, D.C., United States Membership: 29 countries (founding); 188 countries (to date) Official languages: English, French, and Spanish Managing Director: Christine Lagarde Main organ: Board of Governors Website: www.imf.org

INTRODUCTION
The IMF was founded more than 60 years ago toward the end of World War II. With its near-global membership of 188 countries, the IMF is uniquely placed to help member governments. It takes advantage of the opportunitiesand manage the challengesposed by globalization and economic development more generally. The IMF tracks global economic trends and performance, alerts its member countries when it sees problems on the horizon and provides a forum for policy dialogue, and passes on know-how to governments on how to tackle economic difficulties. The IMF has evolved along with the global economy throughout its 65-year history, allowing the organization to retain its central role within the international financial architecture

IMFS GOAL
The IMFs main goal is to ensure the stability of the international monetary and financial system.
It helps resolve crises, and works with its member countries to promote growth and alleviate poverty. It has three main tools at its disposal to carry out its mandate: Surveillance Technical assistance and training Lending.

The IMFs job is to promote a stable international monetary system, in which member countries can achieve high rates of employment, low inflation, and sustainable economic growth. The IMF does this by: overseeing the international monetary system by regularly reviewing national, regional, and global economic and financial developments; providing economic monitoring and policy advice to its 188 member countries, encouraging them to adopt policies that foster economic stability, reduce their vulnerability to economic and financial crises, and raise living standards; and

analysing the impact of countries policies on others; applying lessons from cross-country experiences to each countrys unique situation; and providing a forum for international cooperation on global economic and financial issues.

ASIA
YEREVAN, April 29. Asia is set to grow at 5.7 percent in 2013 (with growth in emerging Asia reaching 7.2 percent), leading the global three-speed recovery, says the International Monetary Fund (IMF) in its latest Regional Economic Outlook (REO) for Asia and the Pacific released in Singapore.

This pick up in growth, after a year of subdued economic performance, is driven largely by continued robust domestic demand. Consumption and private investment will be supported by favourable labour market conditions, with unemployment at multiyear lows in several economies.
Relatively easy financial conditions, which include accommodative monetary policies, rapid credit growth particularly in China and some ASEAN economies, and the rebound of capital inflows since the latter half of 2012, are also key factors behind this expansion.

GREEK
The International Monetary Fund (IMF) has tried to pay down the Greek financial crisis by saying that the country is not likely to face severe financing problems if the review of bailout programme is concluded by July. The global financial body said that the country will not face financing problems in a response to a report in the Financial Times. The report indicated that the IMF is planning to suspend its funding for the country unless the European leaders agree to fill a gap in the funding program. The report said that a gap of 3-4bn euros has appeared in the funding programme. Some believe that the Greek government might face a shortfall of 2 billion euros this year as some of its eurozone creditors were not ready to roll over their Greek debt holdings. The euro area and the International Monetary Fund said that the country will not face finance shortage if it moves ahead with its economic-overhaul program. IMF spokesman Gerry Rice said, "There is an ongoing review of the Greek programme. The priority remains for the Greek authorities to deliver on the programme quickly. If the review is concluded by the end of July, as expected, no financing problems will arise because the programme is financed till end-July 2014."

DUBAI
DUBAI, June 13 :The United Arab Emirates is succeeding in strengthening its state finances by restraining spending, and managed last year to reduce the oil price which it needs to balance its budget, the International Monetary Fund said on Thursday.But the possibility of another boom-and-bust cycle in debt-laden Dubai is a risk for the UAE economy in the medium term, the IMF warned after the emirate announced a string of huge real estate development projects. The IMF's report, released after annual consultations with the UAE, indicated the country is doing more than other Gulf Arab oil exporters to rein in growth of government spending and reduce its vulnerability to any steep fall of the oil price. Hit by the global financial slump, Gulf Arab countries boosted spending sharply from 2009, and increased it further in the wake of the Arab Spring uprisings of 2011. The higher spending has succeeded in keeping economies growing, but means state budgets could fall into deficit if oil prices slide. The UAE began curbing its spending last year, more than doubling its total fiscal surplus - the combined surplus of the federal government and all of the UAE's seven emirates - to 8.8 percent of gross domestic product from 4.1 percent in 2011, the IMF calculated.This lowered the oil price which the UAE needs to balance its combined budget to $74 per barrel last year from $84 in 2011, the IMF said. Brent crude oil is now around $103. By contrast, other Gulf Arab countries continued to increase state spending substantially last year and their budget breakeven prices have been rising. The IMF said it welcomed the UAE's plans to continue consolidating its finances: "For 2013, continued fiscal consolidation of around 2 percent of non-oil GDP is planned.

"Fiscal consolidation is expected to be driven by a rationalisation of capital spending and subsidies and transfers, while spending on goods and services, defence and security, and the wage bill are expected to increase."

PAKISTAN
Islamabad, June 23 (ANI): Pakistan will have to borrow money to repay its huge loan it has taken from the International Monetary Fund. Federal Finance Minister Muhammad Ishaq Dar warned that facility of loan re-scheduling was not available in the IMF, and therefore non-repayment of loan would be deemed default. Speaking at the National Assembly session, he said the IMF authorities had expressed regret that why it had sanctioned such a huge loan for Pakistan in the past as its repayment had become difficult. According to the Daily Times, he mentioned that the Pakistan Government needed foreign inflows only for repayment of huge loans obtained by the previous governments. He said the period of repayment of loans obtained by the previous governments had arrived, and the incumbent government was faced with a challenge of their repayment.

During the next fiscal year the government would be required to re-pay three billion dollars IMF loan obtained under 7.6 billion dollars Stand-By-Arrangement (SBA).
According to the report, for repaying such a huge amount while maintaining its foreign exchange reserves at a reasonable level, Pakistan would be required to engage with IMF and other key financial institutions to ensure repayment on time. (ANI)

EGYPT
Our work with the Egyptians is producing increased understanding on many of the remaining issues," IMF spokesman Gerry Rice said. The spokesman, speaking at a regularly scheduled news conference, said that the IMF was working "constructively" with the authorities with the hope of a swift conclusion of loan negotiations. "We look forward to the resolution of remaining technical issues and completion of the preparatory work by the authorities," he said. "We're looking in particular for early decisions by the authorities on revenue measures to reduce the large budget deficit and on their plans for the use of smart cards to reduce the cost of gasoline and diesel subsidies." The IMF and Egypt have been in talks for months over a multibillion-dollar IMF loan that is contingent on strong support from domestic political actors and a commitment to key reforms. Last year the IMF reached a deal in principle to provide a $4.8 billion loan to help finance the government while it undertakes reforms. Egypt, like many governments across the Middle East and North Africa, relies on energy and food price subsidies to help protect the most vulnerable, at the cost of weighing on government budget and debt levels. The IMF has been urging a shift toward more efficient and targeted forms of social protection in the region undergoing major economic and political transitions following the Arab Spring uprisings. Egyptian authorities believe the IMF loan will help restore investor confidence in Egypt, where unrest that accompanied the 2011 uprising that toppled Hosni Mubarak hammered revenue from the once-lucrative tourism industry. The loan was close to completion in November when political changes in Cairo set it back. Egypt's current president, the Islamist Mohammed Morsi, is under pressure from an increasingly vocal opposition that accuses him of betraying the goals of the 2011 uprising. "Our goal remains to bring the discussions with the Egyptian authorities to a speedy and successful conclusion on a national economic program that will support growth, jobs and stability, that could be supported by the IMF," Rice said. He declined to give a timeframe for the talks to conclude.

ICELAND
"We will not let an international institution tell us that it is not possible to do more for Icelandic households at the same time as it reminds us of the importance of settling the final account following the economic crash," Gunnlaugsson said in a speech celebrating Iceland's independence day on Monday. Gunnlaugsson was referring to an assessment published by the IMF on Friday after carrying out a mission to the North Atlantic island."There is little fiscal space for additional household debt relief," the Washington-based institution said in a statement. The Progressive Party led by Gunnlaugsson, winner of the April elections, campaigned on a promise to reduce the debt burden by asking foreign creditor banks to write off loans owed by Icelanders. Many households are struggling to repay housing loans indexed to inflation that seemed safe prior to the 2008 financial crisis, but the krona's collapse against other currencies stoked inflation on the importdependent island and caused mortgage payments to soar. The Icelandic government's proposals to resolve the problem are expected to be released this summer. For its part, the IMF warned that some distressed households were falling through the cracks of existing programmes to write-off unpayable debt. "The authorities should identify and address bottlenecks in order to speed up resolution," it said.

USA
In its annual report on the US economy, the IMF said growth would be only 1.9 percent this year, due to the sequester's impact, when it had the potential of growing as much as 1.75 percentage points faster. For next year, it lowered its forecast made in April of 3.0 percent to just 2.7 percent. "We had assumed that the sequestration would be phased out," when the prior forecast was made, said IMF Managing Director Christine Lagarde. But the Fund no longer makes that assumption, with political parties still deadlocked over how to cut the budget deficit and debt burden over the medium term. That means that, after $85 billion for the March-September period, another $109 billion has to be pared from fiscal 2014 spending. The Fund called on Congress to revoke the sequester, saying that stronger growth in the short term is important both for the US and global economies. "The automatic spending cuts not only exert a heavy toll on growth in the short term, but the indiscriminate reductions in education, science, and infrastructure spending could also reduce medium-term potential growth," the IMF said. The sequester cuts for this year have had one beneficial outcome, cutting the fiscal deficit by a huge 2.5 percent, according to the report. But that is likely too much in a short period. "The deficit reduction in 2013 has been excessively rapid and ill-designed," it said. "A slower pace of deficit reduction would help the recovery at a time when monetary policy has limited room to support it further."

USA
Despite encouraging a looser fiscal stance now, and despite the narrowing of the fiscal gap, the IMF still warned that Washington needs to do more to address its longer term fiscal imbalances. With the economy picking up, gross US government debt was projected to peak at 110 percent of gross domestic product in 2015 and start to decline. "But the longer-term debt profile remains unsustainable," the report said. "Despite the slowdown in growth rates over the past few years, spending on major health-care programs and Social Security, absent additional reforms, is expected to increase by two percentage points over the next decade." That will cause the deficit to begin widening and start pushing the debt ratio back up. It suggested fundamental tax reforms as part of actions to confront the longer term fiscal shortfall, including eliminating many exemptions and loopholes, and introducing a value-added tax and a carbon tax. It credited the Federal Reserve's aggressive quantitative easing -- its $85 billion-a-month bond purchases, to hold down interest rates -- with keeping the economy on a sure footing as the government slashes spending. Lagarde said the Fed program merited holding in place through this year, noting that the US central bank was still not close to targets on reducing unemployment and on inflation to need to rein in the QE purchases. "We believe that the monetary policy has been necessary and helpful," she told a news conference.

All the information is taken from IMFs official website and true to my knowledge and information. The information can be availed on www.imf.org and the news of different countries is latest ones ranging from april to june. I have tried my best to get appropriate information. I hope it will help you.