Wednesday Jul 30, 2014 Search
Weather | Athens
32o C
25o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
IMF too optimistic on growth before big bailouts, independent auditors say

The International Monetary Fund tended to offer overly rosy growth scenarios for countries that were lining up for big loans from the organization, independent auditors said on Tuesday.

Optimistic forecasts could allow the IMF to lend billions of dollars to countries such as Greece and Ukraine while still letting the organization comply with its strict standards for debt sustainability, or targets for the ratio of debt to gross domestic product.

The IMF's biases decreased or disappeared, however, once the institution returned to a country for the first program review, usually three to six months after the IMF first approved a bailout.

"Short-term forecasts of GDP growth and inflation ... tended to be optimistic in high-profile cases characterized by exceptional access to IMF resources, the IMF's Independent Evaluation Office said in a report. The office analyzed the fund's economic forecasts from 2002 to 2011.

Under so-called exceptional access programs, the IMF amends its rules to allow a country to borrow more than double its quota, or stake in the IMF, in a single year. These cases accounted for more than 85 percent of the total amount of money the IMF lent at that time, the report found.

The IMF uses its economic forecasts to calculate a country's sustainable debt levels, decide how much money it can get and what fiscal austerity is required.

During the period studied by the auditors, the IMF provided a $15 billion bailout to Ukraine and a $40 billion rescue for Greece, among other big loans.

In a report last year on the Greek bailout, the IMF said that it lowered its normal standards for debt sustainability to bail out the euro zone country, and that its projections for the Greek economy may have been overly optimistic.

The evaluation office also found that the IMF over-predicted growth and under-predicted inflation during regional or global recessions, or during crises in individual countries - although the private sector made the same mistakes, the evaluation found.

But in other cases, the report found that IMF forecasts were generally not biased and government officials trusted their predictions.

The auditors recommended the IMF do a better job of learning from past experience in forecasting, and also promote transparency by better describing exactly how its calculates its forecasts.

In statements provided with the report, IMF Managing Director Christine Lagarde and fund staff agreed with most of the advice.

[Reuters]

ekathimerini.com , Wednesday March 19, 2014 (12:14)  
Six firms submit bids to lease Vouliagmeni beach
IMFs Lagarde not sure yet about debt relief for Greece
Deals reached for twin plot on Afandou, for 42 million
More delays and red tape for companies tax rebates
Wine cup used by Pericles found in grave north of Athens
A cup believed to have been used by Classical Greek statesman Pericles has been found in a pauper's grave in north Athens, according to local reports Wednesday. The ceramic wine cup, smashed...
SYRIZA, DIMAR representatives to hold talks Thursday
Following up a series of letters exchanged between main SYRIZA opposition leader Alexis Tsipras and his Democratic Left (DIMAR) counterpart Fotis Kouvelis, representatives of the two parties...
Inside News
VOLLEYBALL
Volleyball national team second in European League
Much as the national volleyball team tried to repeat in the finals of the European League the feat it had achieved in the semifinals, it failed to overturn the advantage Montenegro had got f...
SOCCER
Ranieri says he has little to change in Greek national team
The Hellenic Football Federation (EPO) presented Claudio Ranieri as the new Greece coach for the next couple of years, after the Italian manager signed his contract in Athens on Friday. I l...
Inside Sports
EDITORIAL
Populism eating up education
The fact that the issue of education is not topping the list of priorities for the current coalition government, but instead, has been left in the hands of incapable politicians is utterly i...
COMMENTARY
A valued but mistreated professional
I did not know much on a personal level about Dimitris Stefanou, Greeces former administrative reform general secretary who died earlier this week at the age of 46. I did, however, have a s...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Wine cup used by Pericles found in grave north of Athens
2. SYRIZA, DIMAR representatives to hold talks Thursday
3. Two of four suspects in Nea Manolada strawberry farm shooting convicted
4. Six firms submit bids to lease Vouliagmeni beach
5. IMFs Lagarde not sure yet about debt relief for Greece
6. EU Commissioner Damanaki unlikely to return to Greek politics
more news
Today
This Week
1. Coalition submits new proposals for Greek coastline
2. IMF's Lagarde not sure yet about debt relief for Greece
3. Police arrest one, seek another three over counterfeit goods
4. EU Commissioner Damanaki unlikely to return to Greek politics
5. Six firms submit bids to lease Vouliagmeni beach
6. Two of four suspects in Nea Manolada strawberry farm shooting convicted
Today
This Week
1. Unequal after death
2. Greek sovereign debt at 174.1 percent of GDP in first quarter
3. Hedge fund Dromeus turns Greek tragedy to triumph with 160 pct gain
4. Quadriplegic woman on life support 'dies due to unpaid power bills'
5. Front-line threats
6. Defense Minister Avramopoulos to represent Greece at European Commission
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.