Fiscal risks worsen debt outlook in Argentina

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Public Debt ◽  
Fiscal Rules ◽  
Content Type ◽  
Global Capital ◽  
Fiscal Adjustment ◽  
Financial Conditions ◽  
Export Taxes ◽  
Primary Deficit ◽  
The Government

Significance The lifting of export taxes and the recession have already undermined the government's goal of reducing the fiscal deficit: in 2016 the primary deficit-to-GDP ratio will be even higher than in 2015. However, low public debt-to-GDP ratios and a favourable global environment allowed the government to finance the deficit with new debt. Provinces have also actively tapped global capital markets, postponing fiscal adjustment. Impacts Rising global interest rates would force the government to accelerate unpopular fiscal adjustment. Even if global financial conditions do not worsen, lack of fiscal adjustment will eventually raise doubts about debt sustainability. The government's ability to enforce fiscal rules for provinces will depend on its performance in the 2017 mid-term elections.

Argentine budget projections will prove optimistic

2017 ◽  
Keyword(s):  
Public Debt ◽  
Tax Reform ◽  
Economic Recovery ◽  
Fiscal Deficit ◽  
Content Type ◽  
New Public ◽  
Primary Deficit ◽  
The Government ◽  
Interest Payments ◽  
Public Revenues

Subject The 2018 Argentine budget. Significance The Economy Ministry sent the draft 2018 budget to Congress on September 15. The budget indicates no major changes in fiscal policy; the primary deficit will fall by just 3.4% in nominal terms, driven by the effect of the economic recovery on public revenues, and by a reduction in energy and transport subsidies. By contrast, interest payments will rise, showing the increasing burden of the government’s decision to finance the fiscal deficit through new public debt. Impacts The budget shows a slight fall in tax pressure, so tax reform will be postponed until 2019 at least. The cut in energy and transport subsidies will boost inflation, making it more difficult for the Central Bank to achieve its target. The government will need to show its optimism is well-founded if it hopes to do well in the 2019 elections.

The problems facing agricultural sector in Zanzibar and the prospects of Waqf-Muzar’ah-supply chain model

Humanomics ◽  
2017 ◽  
Vol 33 (2) ◽  
pp. 189-210 ◽  
Author(s):  
Issa Salim Moh’d ◽  
Mustafa Omar Mohammed ◽  
Buerhan Saiti
Keyword(s):  
Supply Chain ◽  
Interest Rates ◽  
Financial Models ◽  
Agricultural Sector ◽  
Chain Model ◽  
Content Type ◽  
High Interest ◽  
Supply Chain Model ◽  
The Government ◽  
Clove Industry

Purpose This paper aims to identify the appropriate model to address the financial challenges in agricultural sector in Zanzibar. Since the middle of 1960, clove production has continually and significantly decreased because of some problems and challenges that include financial ones. The financial intermediaries such as banks, cooperatives and micro-enterprises provide micro-financing to the farmers with high interest rates along with collateral requirements. The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. Design/methodology/approach The authors will review and examine several existing financial models, identify the issues and challenges of the current financial models and propose an appropriate Islamic financing model. Findings The numerous programmes, measures and policies adopted by the relevant parties to find out the solutions to the dwindling clove production have failed. This study, therefore, proposed a Waqf-Muzara’ah-supply chain model to address the financial challenge. Partnership arrangement is also suggested in the model to mitigate the issues of high interest rates and collateral that constrains the financial ability of the farmers and their agricultural output. Originality/value The contribution of the agricultural sector to the economic development of Zanzibar Islands is considerable. As one of the important agricultural sectors, the clove industry was the economic backbone of the government of Zanzibar. This study is believed to be a pioneering work; hence, it is the first study that investigates empirically the challenges facing the clove industry in Zanzibar.

Australian central bank holds rate as growth slips

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Central Bank ◽  
Interest Rates ◽  
Labour Markets ◽  
Content Type ◽  
Commercial Lenders ◽  
The Government ◽  
Roll Out ◽  
Growth Forecasts

Significance The RBA has cut its growth forecasts amid rising job losses, weakening demand and increasing signs that the latest COVID-19 lockdowns will continue to slow the economy until the pace of the vaccine roll-out programme can be increased. Impacts Although the RBA is independent, the government will hope it keeps rates low ahead of the elections due next year. Commercial lenders could raise interest rates independently of the RBA if inflation remains high. Wage pressures will re-emerge as labour markets tighten but may be mitigated by the extent of underemployment. Economic growth will be uneven across the country in coming months as pandemic-related restrictions vary by location.

France’s Macron seeks to relaunch economic reforms

2021 ◽  
Keyword(s):  
Government Spending ◽  
Social Care ◽  
Youth Unemployment ◽  
Economic Reforms ◽  
Fiscal Rules ◽  
Left Wing ◽  
Social Unrest ◽  
Content Type ◽  
The Government ◽  
Mandatory Vaccination

Significance Among those policies are measures targeted at youth unemployment and social care for older people, aimed at attracting left-wing support. Most importantly, Macron has committed to relaunching his controversial pension reforms, which triggered widespread social unrest in late 2019 and early 2020. Impacts Mandatory vaccination could trigger protests and legal action against the government. The centre-right Republicans could take support from Macron if they unite around a strong presidential candidate over the coming months. Macron will likely push for looser EU fiscal rules to facilitate more government spending beyond 2022.

Monetary easing may quicken in Brazil this year

2017 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Recession ◽  
Government Debt ◽  
Domestic Demand ◽  
Private Debt ◽  
Content Type ◽  
Positive Effects ◽  
The Government

Significance At its first meeting of 2017, on January 10-11, the COPOM reduced the benchmark Selic interest rate to 13%. The 75-basis-point (bp) rate cut decision, the largest in nearly five years, accelerated the monetary easing cycle that started in October 2016. Economic recession has been relieving inflationary pressures and opening room for more intense cuts in interest rates. Impacts Further reductions of interest rates may contribute to controlling government debt. Private debt renegotiations at lower interest rates may facilitate a recovery in domestic demand and output. Any positive effects of monetary policy on activity may help contain popular dissatisfaction with the government.

HDZ leader could supplant Croatia's non-party premier

2016 ◽  
Keyword(s):  
Decision Making ◽  
Public Debt ◽  
Social Situation ◽  
Content Type ◽  
Reform Agenda ◽  
The Public ◽  
Nationalist Party ◽  
Ethnic Tensions ◽  
The Government ◽  
Uncertain Outcomes

Significance The package could be the government's swan song. One coalition party, the centre-right Bridge (Croatian: Most) of Independent Lists, strongly supported a reform agenda from the beginning, but Croatia's main nationalist party, the Croatian Democratic Union (HDZ), did not. This, in addition to key appointments, has become a major point of dispute between them, blocking decision-making. HDZ leader Tomislav Karamarko has been frustrated in his ambition to control the government and especially the security apparatus. Impacts Political instability could cause further political and ethnic tensions, with uncertain outcomes. Persistent deadlock will worsen Croatia's parlous economic and social situation. Instability could frustrate consolidating Croatia's exit from its six-year recession in 2015 and reducing the public debt from 87% of GDP.

Fiscal adjustment may prove painful in Uruguay

2016 ◽  
Keyword(s):  
Trade Union ◽  
Public Spending ◽  
High Income ◽  
Content Type ◽  
Public Finances ◽  
Fiscal Adjustment ◽  
Economic Climate ◽  
The Government ◽  
First Time ◽  
Economic Outlook

Subject Uruguay's economic outlook. Significance The government has determined a fiscal adjustment, with tax increases for middle- and high-income earners, delays in public spending plans and a reform of military pensions, in a bid to address worsening public finances. It is the first time that the leftist Frente Amplio (FA), in government since 2005, has faced an adverse economic climate. Impacts Austerity in a context of 'stagflation' will generate political and trade union tensions. Rising unemployment will drive a deterioration in real family incomes. Growth will remain paltry this year and next.

IMF will worry about Cairo's debt burden later

2017 ◽  
Keyword(s):  
Interest Rate ◽  
Public Debt ◽  
Government Expenditure ◽  
Fiscal Year ◽  
Indirect Taxation ◽  
Content Type ◽  
The Public ◽  
Debt Burden ◽  
The Government ◽  
Domestic Interest Rate

Significance The review will take into account the effects of measures taken thus far, in particular the flotation of the Egyptian pound, and will assess the government’s budget for the 2017-18 (July-June) fiscal year. Impacts The government will struggle to reduce the deficit because of the scale of public debt and the record high domestic interest rate. Government expenditure on wages will rise at a much lower rate than inflation. The public will also face further rises in indirect taxation, revenue from which is projected to rise by 40%. The IMF is unlikely to raise any serious objections to the government’s plans.

Laos’s economic needs will stymie push to curb graft

2019 ◽  
Keyword(s):  
River Basin ◽  
Public Debt ◽  
Prime Minister ◽  
Mekong River ◽  
International Organisations ◽  
Content Type ◽  
Mekong River Commission ◽  
Revolutionary Party ◽  
Hydroelectric Projects ◽  
The Government

Subject Laos's infrastructure and anti-corruption drives. Significance Prime Minister Thongloun Sisoulith is aiming to tackle rising public debt and corruption. The ruling Lao People’s Revolutionary Party (LPRP) last year suspended approval of new hydroelectric projects following the collapse of a dam in the Mekong river basin, but the country is committed to developing hydropower. Impacts The four-country Mekong River Commission will have limited influence over Lao hydropower policy. Anti-corruption efforts will not result in political challenges to the LPRP. The government will aim to persuade international organisations active in Laos of its new openness.

Monetary tightening carries high cost in Argentina

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Current Account Deficit ◽  
Public Spending ◽  
Medium Term ◽  
Content Type ◽  
Financial Volatility ◽  
Fiscal Adjustment ◽  
Debt Default ◽  
Floating Exchange Rate ◽  
The Government

Significance Despite its commitment to a floating exchange rate, the government has been forced to prioritise exchange rate stabilisation. After the change of Central Bank (BCRA) authorities in mid-June failed to stop the latest currency run, the government further tightened monetary policy. Aiming to alleviate fears of a new medium-term debt default, the government is emphasising its commitment to fiscal adjustment, even including the possibility of new taxes, which runs counter to efforts to reduce tax pressure. Impacts Interest rate rises and closer control of monetary aggregates may prompt a recession. Depreciation will help to reduce the current account deficit in 2018 but will worsen debt indicators. Growing political uncertainty and difficulty in cutting public spending will sustain financial volatility.

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