Disconnect between markets, real economy can pose threat to recovery: IMF

The progressing disengage between budgetary markets and the genuine economy is a defenselessness which could represent a danger to the recuperation should financial specialist hazard hunger blur, the International Monetary Fund (IMF) has said.
Significant national banks the world over have added to a considerable facilitating of money related conditions by means of loan fee cuts and a monetary record development of more than six trillion dollars including resource buys, remote trade lines, and credit and liquidity offices, as per the IMF update on its April Global Financial Stability Report (GFSR).
"These quick and phenomenal activities by national banks have reestablished certainty and helped speculator hazard taking," said Tobias Adrian, Financial Counselor and Director of the IMF's Monetary and Capital Markets Department, and Deputy Director Fabio Natalucci.
"After sharp decreases in February and March, value markets have revitalized back, sometimes to near their January levels, while credit spreads have limited fundamentally, in any event, for more dangerous ventures," the IMF authorities wrote in a blog on Thursday (nearby time) taking note of that there has been an evident detach between money related markets and financial possibilities.
"Financial specialists appear to be wagering that enduring solid help from national banks will continue a snappy recuperation even as monetary information point to a more profound than-anticipated downturn," said Adrian and Natalucci.
The distinction between money related markets and the genuine economy can be delineated by the ongoing decoupling between the taking off US value advertises and plunging shopper certainty, bringing up issues about the convention's supportability notwithstanding the lift gave by national banks, they said.

The IMF authorities noticed that this uniqueness raises the ghost of another rectification in hazard resource costs should speculators' mentality change, representing a danger to the recuperation.

IMF approves $18 bn emergency financing for 50 countries during Covid-19

The International Monetary Fund (IMF) has already authorised financial assistance for 50 member countries during the coronavirus pandemic, said IMF Spokesperson Gerry Rice on Thursday (local time) during a virtual press briefing.
"The IMF's Executive Board has approved financing under the emergency facilities at record speed for 50 countries, totalling about 18 billion dollars at this point. It is an IMF moving at an unprecedented speed in an unprecedented way to meet this unprecedented challenge," he said.
Rice said the emergency assistance for Covid-19 is not comparable with normal IMF programmes since the funds are not tied to certain conditions.
"Importantly, these facilities allow the IMF to provide emergency assistance without the need to have a full-fledged programme. So, they do not entail the usual IMF conditionality," he said.
In order to ensure full transparency and prevent any misuse of funds, the IMF asked member countries who apply for financing to commit that it is only used for urgent purposes related to Covid-19.

"We are asking all member governments who receive emergency financing from the IMF to commit in their letters of intent to ensure that this assistance is used for the urgent purposes agreed under the emergency financing. These letters of intent are important and they are published by member countries and they are available for you and anyone to review on the IMF website."

The IMF called for the suspension of debt service payments for the poorest countries from bilateral creditors.


"The IMF, for its part, with the approval of our executive board, has gone ahead with immediate debt service relief to 25 countries under our revamped Catastrophe Containment and Relief Trust (CCRT). And this allows those countries to channel more resources towards vital health and medical relief efforts rather than repay debt obligations owed to the IMF," said Rice.

IMF says India's growth 'much weaker' than expected; cuts FY20 projection

International News
International Monetary Fund (IMF) on Thursday said that India's economic growth is "much weaker" than expected due to corporate and environmental regulatory uncertainty and "lingering weakness" in some non-Bank financial companies.
"Again, we will have a fresh set of numbers coming up but the recent economic growth in India is much weaker than expected, mainly due to corporate and environmental regulatory uncertainty and lingering weakness in some non-Bank financial companies and risks to the outlook are tilted to the downside, as we like to say," IMF spokesman Gerry Rice told reporters at a news conference.
The economic growth slowed to a seven-year low to 5 per cent in April to June quarter from 8 per cent a year ago, as per the government data.
The International Monetary Fund (IMF) has cut its projection for India's economic growth by 0.3 percentage points to 7 per cent for the fiscal year 2019-20 owing to the "weaker-than-expected outlook" for the domestic demand.
The growth is expected to rise to 7.2 per cent points in FY21, down by the projected growth rate of 7.5 in the earlier report.
The slowdown was largely due to a sharp dip in the manufacturing sector and agriculture output, said the Ministry of Statistics and Programme Implementation in a statement.

 The previous low was recorded at 4.9 per cent in April to June 2012-13. Consumer demand and private investment have weakened amid global trade frictions and dampening business sentiment.

US and China are fighting a trade war and Australia is reaping the benefits

International News

Luckily for Australia, the U.S.-China trade war happened.
Australia faced a personal-credit crunch, housing slump and weak business confidence, threatening to derail the longest-running growth streak in the developed world. Then it got a trade boost as U.S.-China relations soured.
Australia ships around a third of its exports to China, mostly commodities such as iron ore and coal that are used by heavy industry and in the building of apartments. Those exports are in demand as Beijing accelerates construction spending to head off damage caused by Washington raising tariffs.
Trade has been so buoyant that Australia logged its first current-account surplus—a measure of trade and financial flows with other countries—since 1975 in the second quarter of this year. That has provided some much-needed juice to Australia’s economy, on a 28-year run without a recession, as other headwinds to growth intensify. Australia’s gross domestic product expanded at its slowest pace since the financial crisis in the second quarter.
“It seems like a contradiction,” said AMP Capital chief economist Shane Oliver. “We are hearing all this talk about trade wars, which should obviously affect trade, and yet we have a record trade surplus that’s been far greater than anyone expected.”
Australia’s trade experience is unusual for a U.S. ally, some of whose economies have become collateral damage in the trade dispute. Germany’s exports in June fell 8% on a year earlier, and its current-account surplus has declined.

 Global trade volumes grew 4.4% in the first quarter of 2018, when the first U.S. tariffs were imposed, from the same period a year before, according to the International Monetary Fund...Read More