Thursday August 21, 2014 Search
Weather | Athens
29o C
23o 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)  
Greek stocks post rise of 0.99 percent
Banks reject stress test concerns
Greek energy minister requests gas back-up
Greece an alternative route for South Stream, report suggests
Botched steroid deal led to Mani murders
A deal to sell steroids gone wrong appears to have been the reason for the murder of two bodybuilding fanatics, aged 25 and 26, whose bodies were found on Tuesday in a ravine on the outskirt...
Public works near completion, minister says
Eight public works projects, including the completion of a new stretch of highway at the notorious Maliakos Gulf in central Greece, are due to be completed by the end of the year Infrastruct...
Inside News
SOCCER
Greek soccer officials in refereeing probe to face prosecutor on Sept 15
Eleven soccer officials were on Wednesday given until September 15 before they have to face prosecutor Aristidis Koreas, who is investigating allegations that the draws to decide which match...
ATHLETICS
Long jumper Tsatoumas takes Greeces second silver at European Championships
Greece won its second medal at the European Athletics Championships in Zurich, Switzerland, on Sunday with Louis Tsatoumas coming second in the long jump. Briton Greg Rutherford won the even...
Inside Sports
COMMENTARY
Logged out of reality
It is a global phenomenon, and we have yet to fully grasp its implications for democracy and the functionality of Western states. The Internet is a bottomless well of information and a vast ...
EDITORIAL
Manipulated institutions
Greeces leftist opposition must not manipulate an institution as important as the President of the Republic for the sake of political ends. Regrettably, SYRIZA leader Alexis Tsipras appears...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Botched steroid deal led to Mani murders
2. Greek stocks post rise of 0.99 percent
3. Banks reject stress test concerns
4. Greek energy minister requests gas back-up
5. Greece an alternative route for South Stream, report suggests
6. Public works near completion, minister says
more news
Today
This Week
1. Greek current account surplus widens in June
2. Two missing men found shot dead near Kalamata
3. Logged out of reality
4. Greek firms see 30 pct rise in PayPal payments from abroad in 2014
5. ECB in policy limbo, boxed in by its own plans
6. Greece to give children at primary school road safety lessons
Today
This Week
1. Carved sphinxes at Ancient Amphipolis tomb will not be removed
2. Canadas fiscal adjustment has lessons for Greece
3. Treating Amphipolis with care
4. Greece to offer law on restructuring bad loans next month
5. Greeces recession eases as country nears end to six-year slump
6. Ministry sys no to debt collection agencies
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.