NewzIntel.com

Category: Banking

  • MIL-OSI Submissions: Australia – CommBank Matildas on loan to Aussie businesses – CBA

    Source: Commonwealth Bank of Australia (CBA)

    Fifty CommBank business customers will have the opportunity to have the CommBank Matildas promote their business as the bank launches marketing support for its customers.

    CommBank’s business customers will have the opportunity to have some CommBank Matildas promote their business, as the bank launches further support to help its customers with the rising costs of doing business.

    The Aussie sporting legends will lend a helping hand to 50 customers across the country by promoting their business and helping spread the word about the products and services that particular business offers.

    Commonwealth Bank Executive General Manager Small Business Banking, Rebecca Warren, said many small business owners were facing challenges on multiple fronts as revenues decline with tightening household budgets and costs of doing business continue to rise.

    Recent research commissioned by CommBank1 shows 70 per cent of Australian small to medium businesses have had to cut costs in the last 12 months due to economic pressures, with marketing being one of the top categories where they’ve reduced spend.

    “Running a small business is hard work, and often stressful. We know that right now small business owners are finding it particularly tough, and our customers are showing incredible resilience,” Ms Warren said.

    “One of the best ways of maximising spending events, especially if you’re running a small business, is targeting your local community with promotions, and a little marketing budget can go a long way.

    “We wanted to see what else we could do to back our small business customers at this time, to complement our existing suite of measures to support with cash flow or expenses.

    “Whether you’re a dog walker on the Central Coast of NSW, a baker in Fremantle WA, or an online fashion brand based in Melbourne, our business customers could soon have some CommBank Matildas feature on their ads, all paid for by us. We’re excited to be shining a spotlight on some of the amazing businesses around the country.”

    The campaign is designed to boost the visibility of the winning businesses with their target audience, be it their local community or online target demographics, and help with the costs of marketing. Along with providing the opportunity to have some CommBank Matildas promote the winning business, CBA will be paying to run the ads in the business’ local area.

    To be eligible, applicants must hold an active CommBank Business Transaction Account, have an ABN and operate in Australia. The competition, which can be accessed online, launches today and closes on 1 December 2024. For full details, visit: commbank.com.au/backingbusiness

    1 YouGov research conducted on behalf of CommBank (August 2024)

    About YouGov research

    All figures, unless otherwise stated, are from YouGov. Total sample size was 510 adults. Fieldwork was undertaken between 1 – 7 August 2024. The survey was carried out online. The figures have been weighted and are representative of all Australian small and medium business owners and decision makers (aged 18+).

    MIL OSI – Submitted News –

  • MIL-OSI Germany: Current monetary policy topics | Speech at the Commerzbank AG event “Geldpolitik in Zeiten der Inflation”

    Source: Deutsche Bundesbank in English

    Check against delivery.
    1 Words of welcome
    Ladies and gentlemen,
    I hope you have recharged your batteries after the summer and a holiday break, despite the eventful days we can look back on. Perhaps you are still relishing the sporting highlights you experienced from the comfort of your own armchair: the thrill of watching the Olympic Games and the Paralympics on TV at home.
    A “sports programme” of a somewhat different variety now awaits us: a broad repertoire of topics to cover in a short allotted speaking time. Let’s begin by discussing three questions that are always of crucial importance: Where is economy activity heading? Where is inflation heading? And where is monetary policy heading? These will be followed by three topics specific to monetary policy: balance sheet reduction, the changed operational framework for monetary policy, and monetary and fiscal policy interactions.
    2 Economic activity
    Let’s kick off with the economic situation as well as the outlook for the economy. German economic output shrank by 0.1% in the second quarter of this year, after expanding slightly at the beginning of the year. The main drags on activity were weak investment and the construction sector, but exports and private consumption contracted somewhat as well.
    Increased financing costs continued to squeeze investment activity, thus crimping domestic demand for industrial goods and construction work. Private investment also faced headwinds stemming from the intense uncertainty surrounding economic policy. On top of that, there was a countereffect in construction activity following the mild weather conditions in the first quarter. Moreover, industry in Germany is still feeling the pinch of weak foreign demand. Capacity utilisation in industry is now significantly below average, and that, too, is depressing investment.
    All these factors combined mean the domestic economy has been treading water since the start of Russia’s war of aggression against Ukraine more than two years ago. Stagnation might be more or less on the cards for full-year 2024 as well if the latest forecasts by economic research institutes are anything to go by.
    Hopes that industrial activity might pick up in the second half of the year have dimmed considerably according to the sentiment indicators observed in recent months. And consumer restraint is looking more stubborn than our Bundesbank experts were expecting when we published our Forecast for Germany in June. For all this, though, it is still true to say that sharply rising wages, easing inflation and robust labour market developments are opening up more and more scope for spending. Households could leverage that scope to gradually step up their consumption. Looking ahead to next year, the economic research institutes are expecting to see tentative economic growth of between ½ and 1%. The Bundesbank will be publishing its new Forecast for Germany in December.
    Ladies and gentlemen, one point I have stressed on multiple occasions in the past is that we should not talk our country down as a business location. That is not to say, of course, that we should not pinpoint weaknesses and resolutely tackle problems. An overly pessimistic mindset can be damaging. But what can also be damaging is viewing a situation through rose-tinted spectacles or blindly trusting that everything will somehow fix itself of its own accord. There is no doubt that Germany is not seeing as much investment as we would like. And industry is struggling with a difficult competitive environment. Barriers need to be dismantled here.
    At this point, allow me to make a passing remark in light of recent events: if businesses are to get to grips with – and finance – their future challenges, we will need banks that are strong and robust. In any possible mergers, what matters is that the institution that comes about as a result is one that fits that bill in the best possible way.
    As far as the topic of barriers is concerned, I do not wish to go beyond my allotted time. Allow me, then, to run through just some of the initiatives that could boost the attractiveness of a business location: cutting as much red tape as possible, and speeding up administrative procedures like approval processes. As for greening the economy, policymakers should ensure greater planning security. Digital infrastructure and education, in particular, are in need of improvement. In addition, politicians should act to boost the labour supply because staff shortages are bound to worsen further as demographic change makes itself felt.
    Headlines claiming that Germany is a millstone around the neck of the euro area[1] make for unpleasant reading. But the simple fact is that when the largest Member State’s economy is weak, the average across the bloc will be depressed as a result. The euro area economy as a whole has gained some traction in the first two quarters of this year (recording quarter-on-quarter growth rates of 0.3% and 0.2%, respectively). In their latest projections, ECB staff are forecasting modest economic growth of 0.8% in full-year 2024, rising slightly to 1.3% next year.
    The outlook is uncertain, particularly given what remains a tense geopolitical environment. Neither in Ukraine nor in the Middle East has the situation eased. The outcome of the presidential election in the United States is another source of economic uncertainty. Last week’s TV debate gave us a taste of what is to come.Europe might end up losing out if, say, the United States adopts a more protectionist trade policy, takes government action to support the country as a business location, or turns its back on multilateral cooperation (on issues such as climate action, NATO and the WTO).
    There’s good news as well, though: the labour market in the euro area is as robust as ever, as unemployment hit an all-time low of 6.4% in July. Germany’s economy hasn’t recovered yet, so its labour market hasn’t improved, but nor did it deteriorate significantly. Because firms in Germany have largely refrained from scaling back their workforces during the ongoing spell of economic weakness, they see little need overall for new hires. Even if they are certainly finding it difficult to fill vacancies in some areas.
    An analysis by the ECB has found that labour hoarding – that is, keeping staff in reserve – is still above pre-pandemic levels in the euro area. Because profit margins were high at times, firms were able to hoard staff to a greater extent or for longer than usual when the situation or outlook deteriorated, the ECB noted.[2]
    If profit margins now start to normalise, they will probably reduce the scope for firms to undertake labour hoarding. In addition, labour hoarding suggests that there will be fewer hires than usual as the economy recovers. Instead, productivity is more likely to rise. The new projections include an increase in euro area labour productivity of around 1% in both 2025 and 2026, following stagnation in the current year and a decline of just under 1% last year. Taken in isolation, this would dampen unit labour costs and thus inflation.
    3 Inflation
    This brings us to question number two concerning the outlook for prices. On this point, the focus is not only on the weak productivity growth observed so far, but also on the strong wage growth at the current juncture. For Germany, the latest wage deals have increased pay levels significantly. And relatively high wage settlements look set to be reached in the forthcoming pay negotiations as well. Understandably, the trade unions are looking to achieve lasting compensation for the real wage losses accumulated over the past three years.
    Because inflation compensation bonuses will only be exempt from taxes and social contributions until the end of this year, the trade unions are now stepping up their demands for permanent wage increases. The still high willingness to strike and persistent widespread shortage of labour suggest that wage growth will remain comparatively strong. The longer-term outlook, too, indicates that labour scarcity in Germany wil
    l remain a key factor driving robust wage growth and thus high inflation in the domestic economy.
    In the euro area, growth in negotiated wages slowed significantly in the second quarter. However, this was due in part to a one-off effect in Germany (owing to inflation compensation bonuses paid out in the previous year but absent this year). The persistent labour market tightness in the euro area means that a quick let-up in wage dynamics is unlikely.
    With wage pressures easing only slowly, the disinflation process is proving to be slow and arduous. Right now, inflation is not yet where we on the ECB Governing Council want it to be. Headline euro area inflation stood at 2.2% in August, down from 2.6% one month earlier. That significant decline mainly came about due to energy prices. Whilst it is true that German inflation – as measured by the Harmonised Index of Consumer Prices – has reached 2.0%, I’m afraid to say that, for the time being, that level is probably not yet here to stay. Services inflation in the euro area is still worryingly high, coming in at 4.1% at last count. Core inflation has eased only marginally, dropping to 2.8%.
    According to the latest ECB staff projections, euro area price inflation will be back at the 2% mark at the end of 2025. The journey there remains uncertain and include a few bends. For instance, inflation rates are expected to edge somewhat higher again towards the end of this year due to energy prices being in decline in the fourth quarter of last year.
    Overall, though, we have made huge advances towards safeguarding price stability. As the disinflation process plays out, inflation expectations have also receded the way we want them to, and the risk of higher inflation expectations has diminished in the view of markets and surveyed experts. This would suggest that inflation expectations are well anchored. It is now up to us on the ECB Governing Council to prove our staying power. If we achieve that, we will soon make it over the finishing line.
    4 Monetary policy
    The third question I asked at the beginning has basically been answered: the phase of steep tightening was followed by nine months of unchanged key interest rates, after which the ECB Governing Council subsequently loosened the reins somewhat in June and now again in September.
    We don’t know yet how things will unfold, but it is certain that key interest rates will not go back down as quickly and sharply as they went up! The intervals between the potential moves may vary depending on the incoming data, as monetary policy must remain tight enough for long enough to ensure that the inflation rate returns to the 2% target over the medium term. Assumptions to that effect about key interest rates also form the basis for the ECB’s projections.
    Ladies and gentlemen, public opinions on the best time for an interest rate move vary. This is due, not least, to the fact that the risks cannot be clearly quantified and that monetary policy time lags are impossible to measure with certainty. It is important for me to see inflation stable at the 2% target as soon as possible. To get there, we will not pre-commit to any path in our decisions going forward. Instead, we will continue to examine incoming data with an open mind. We are not flying on autopilot when it comes to interest rate policy.
    4.1 Reducing the balance sheet
    I will now turn to the three topics specific to monetary policy. The key interest rates are the central lever with which to adjust the monetary policy stance. In addition, gradual balance sheet reduction also influences the direction of monetary policy. This is because the length of the balance sheet is ultimately driven by previous accommodative non-standard measures.
    Banks’ repayment of loans under the longer-term refinancing operations has thus far been the primary contributory factor towards reducing the Eurosystem’s total assets. Remaining outstanding funds borrowed under targeted longer-term refinancing operations (TLTROs) are now only relatively small (around €76 billion). Next week will be the penultimate maturity date, and in December of this year the last repayments of funds borrowed under TLTROs will be made.
    Moreover, the Eurosystem’s large bond holdings are gradually declining, by an average of €25 to €30 billion per month (since July 2023), through the discontinuation of reinvestments under the APP, the largest such purchase programme. Since July of this year, reinvestments under the pandemic emergency purchase programme (PEPP) have been reduced by an average of €7.5 billion per month and will also be fully discontinued at the end of 2024.
    The process of significantly shrinking current total assets of just under €6,500 billion is not done just yet. So far, the markets have taken the Eurosystem’s balance sheet reduction (starting from a peak of over €8,800 billion) in their stride. I am confident about the future, too.
    On the ECB Governing Council, I am one of those who has been advocating for reducing the Eurosystem’s footprint in financial markets. This process will take time. It is closely linked to how monetary policy is implemented and passed through to the financial markets. That is why I now wish to briefly address, as the second of my three topics specific to monetary policy, the changes to the operational framework for implementing monetary policy adopted in mid-March.
    4.2 Changes to the operational framework for implementing monetary policy
    You might be thinking: what a dry, hard-to-digest topic, and right after lunch to boot! However, addressing these seemingly annoying details is worth the time and effort. This is because the new operational framework for implementing monetary policy will determine how central bank liquidity is provided to banks in the future and how short-term money market rates will evolve going forward.
    With excess liquidity in the banking system declining, but still high for the time being, little will change at first: we will continue to regularly lend central bank liquidity to banks at the quantities demanded and a fixed interest rate, with a wide range of bonds and other claims being eligible collateral for these loans. The reserve ratio for determining banks’ non-remunerated compulsory deposits with the Eurosystem remains unchanged at 1%.
    On this very day, the gap between the main refinancing operations rate and the deposit facility rate narrowed from 50 to 15 basis points. This operational adjustment will incentivise bidding in the weekly tenders. Short-term money market rates are therefore likely to continue to evolve in the vicinity of the deposit facility rate, given limited fluctuations. In the process, we will observe the compatibility of our operational framework with market principles.[3]
    The ECB Governing Council also agreed to introduce, at a later stage, new structural longer-term refinancing operations and a structural portfolio of securities. These transactions are intended to make a contribution to covering the banking sector’s structural liquidity needs. But that is a way off yet. That’s because, as already mentioned, banks’ excess liquidity and Eurosystem bond holdings are still very sizeable.
    We will now gain experience and gather insights. A review of the key parameters of the operational framework is scheduled for 2026. However, adjustments can be made earlier if necessary.
    4.3 Monetary and fiscal policy interactions
    My third topic specific to monetary policy, monetary and fiscal policy interactions, is a perennial theme. Generally, the combination of the two policy areas determines how accommodative or restrictive the overall effect on the economy is.
    In some times of crisis, such as during the coronavirus pandemic, monetary and fiscal policy can work together in the pursuit of their respective objectives. In times of high inflation, however, there may be potential for conflict. At the very least, fiscal policy should not undermine a restrictive monetary policy in the fight against inflation, but rather support it as much as possible.This year and next, the euro area fiscal stance is likely to have a roughly neutral effect, i.e. not generate any additional inflationary pressure. However, the expiry of crisis support measures is the reason why the deficit ratio is expected to decline. Seen from this perspective, fiscal policy is not restrictive.
    The ECB projects that the euro area debt ratio will remain close to 90%. In some Member States, government debt is worryingly high, with no signs of a trend reversal happening any time soon. Monetary policy should ignore this. This is because the Member States will have to be able to deal with the interest rate level that is warranted from a monetary policy perspective. Governments ought to brace themselves for higher interest rate levels.
    The new EU fiscal rules entered into force at the end of April. However, it is not yet clear what concrete requirements for fiscal consolidation will follow. In July, the existence of excessive deficits was established for seven countries, including the euro area countries France, Italy, Belgium, Slovakia and Malta. It will be crucial to implement the new rules in such a way that high debt ratios actually fall. This would require setting ambitious targets, and governments would then have to comply with them more ambitiously than in the past.
    Setting priorities will remain the key fiscal policy challenge at any rate And this will not get any easier if additional expenditure, for example for climate action, defence or in view of demographic pressures, is moved higher on the priority list.
    This is true even in Germany, where the debt ratio is no longer far from the 60% limit. In this case, it may indeed make sense to expand the fiscal scope somewhat by means of a moderate reform of the debt brake just as long as Germany complies with the European debt rules. The Bundesbank has put forward proposals to achieve that goal.
    5 Concluding remarks
    Ladies and gentlemen,
    After three questions and three topics, I would like to end with a triad. Democracy, freedom and openness are core values on which our society, our daily coexistence, and our prosperity are based. We are living in challenging times. This is exemplified by the elections in France and three eastern German federal states as well as, this coming November, in the United States. For the future, it remains to be hoped that we can maintain democracy, freedom and openness as a secure basis.
    Thank you for your attention.

    Footnotes:
    Konjunktur: Wirtschaft in Euro-Zone wächst – jedoch nicht in Deutschland (wiwo.de), Wirtschaft in Euro-Zone wächst trotz Bremsklotz Deutschland 0,2 Prozent (msn.com)
    European Central Bank, Higher profit margins have helped firms hoard labour, Economic Bulletin, Issue 4/2024, pp. 54‑58.
    See Nagel, J., Reflections on the Eurosystem’s new operational framework | Deutsche Bundesbank, speech at the Konstanz Seminar on Monetary Theory and Monetary Policy, 16 May 2024.

    MIL OSI

    MIL OSI German News –

  • MIL-OSI Asia-Pac: Fraudulent website and social media page related to Dah Sing Bank, Limited

    Source: Hong Kong Government special administrative region

    Fraudulent website and social media page related to Dah Sing Bank, Limited
    Fraudulent website and social media page related to Dah Sing Bank, Limited
    **************************************************************************

    The following is issued on behalf of the Hong Kong Monetary Authority:     The Hong Kong Monetary Authority (HKMA) wishes to alert members of the public to a press release issued by Dah Sing Bank, Limited relating to a fraudulent website and a social media page, which have been reported to the HKMA. A hyperlink to the press release is available on the HKMA website.           The HKMA wishes to remind the public that banks will not send SMS or emails with embedded hyperlinks which direct them to the banks’ websites to carry out transactions. They will not ask customers for sensitive personal information, such as login passwords or one-time password, by phone, email or SMS (including via embedded hyperlinks).           Anyone who has provided his or her personal information, or who has conducted any financial transactions, through or in response to the website or social media page concerned, should contact the bank using the contact information provided in the press release, and report the matter to the Police by contacting the Crime Wing Information Centre of the Hong Kong Police Force at 2860 5012.

     
    Ends/Tuesday, September 24, 2024Issued at HKT 17:50

    NNNN

    MIL OSI Asia Pacific News –

  • MIL-OSI USA: Deputy Administrator Isobel Coleman at Transforming Global Humanitarian Response for the 21st Century

    Source: USAID

    DEPUTY ADMINISTRATOR ISOBEL COLEMAN: Thank you, Secretary [Antony] Blinken, Foreign Secretary [David] Lammy, Mr. [Ilan] Goldfajn, and Mr. [Børge] Brende for bringing us together today. 

    As you all have emphasized, every year, global humanitarian needs reach record highs. Today, more than 80 percent of the countries where USAID works, encompassing roughly two billion people, are fragile or conflict-affected states. 

    Our humanitarian assistance spending in response to crises has tripled in the last decade, while development assistance has been flat.  

    In other words, we’re dedicating more and more of our resources to responding to crises – instead of investing in long-term efforts to prevent them. 

    This is not sustainable.

    The solution requires all of us – humanitarian, development, and peace practitioners, governments, and the private sector – to more effectively meet the staggering global humanitarian needs while continuing to drive development gains. 

    This is why, in January, USAID launched an Agency-wide initiative to align our humanitarian, development, and peace efforts across our policy, planning, and programming – so that even while responding to crises, we are also making critical investments in long term stability and prevention. 

    We are taking practical steps to change the way we work, such as conducting an information campaign to increase the use of existing award flexibilities, aligning our humanitarian and development strategic planning processes, and co-hosting a global forum with the UK, Germany, the World Bank, UNICEF, and WFP on social protection in fragility and conflict.

    USAID is also leveraging funding from the Global Fragility Act to facilitate the kinds of private investment that can be so pivotal to preventing and more sustainably addressing global humanitarian needs. 

    Today, I am pleased to announce that we have partnered with the US Development Finance Corporation to create a new specialized unit to focus on identifying promising investment opportunities in fragile environments – where investments are often more complicated, riskier, and time-consuming. 

    We are eager to partner with you in catalyzing these critical investments, which align with so many of the goals we’ve discussed today. 

    I commend this group for your commitment to breaking down silos and identifying more sustainable and cost-effective ways to address the staggering global humanitarian needs we face today. 

    USAID is committed to advancing this agenda with you. 

    MIL OSI USA News –

  • MIL-OSI Reportage: Nine out of ten targeted by scams, but New Zealanders getting more scam savvy

    Source: BNZ statements

    New research from Bank of New Zealand (BNZ) shows a significant jump in scam activity over the past 12 months, with nine out of ten New Zealanders targeted by a scam, up 13 percent on the same time last year.

    But while the volume of scams has surged, New Zealanders are getting more scam savvy, with only one in ten falling victim.

    The research comes as BNZ launches its annual Scam Savvy Week to raise awareness, help people know how to identify scams, and be safer online.

    BNZ’s Head of Financial Crime, Ashley Kai Fong, says, “While it’s fantastic that New Zealanders are learning to spot the red flags, the sheer volume of scams is a stark reminder for all of us to remain vigilant.

    “All scams require people to do something – whether that’s clicking on a link, engaging in a conversation, or sending money. Ultimately the best defence against scams is you. If you can recognise the signs of a scam, you’re less likely to fall victim. That’s why BNZ has developed tools and resources to help New Zealanders get scam savvy at www.getscamsavvy.co.nz.”

    Businesses getting “con-conscious”  

    Businesses have also improved their ability to identify and avoid scams, with the number of small and medium enterprises (SMEs) falling victim to scams dropping from 47 percent in 2022 to 34 percent in 2023.

    “Scams are a significant threat to our business community, but these figures show that SMEs are taking the right steps to protect themselves,” says Kai Fong.

    Despite the reduction, businesses are not being complacent. Reporting of scams to banks has seen a marked increase, with 60 percent of businesses scammed in 2023 reporting the incident, compared to 39 percent in the previous year.

    “This underscores the growing awareness among businesses of the importance of swift reporting and robust prevention measures. It’s a clear indication that the business community is recognising the threat posed by scammers,” says Kai Fong.

    More people reporting scams, but further progress needed

    Reporting by individuals also increased with 64 percent of individuals impacted by a scam reporting it, up from 46 percent last year.

    “Reporting scams is a crucial step in fighting fraud,” says Kai Fong. “It provides valuable data to help us understand and combat these threats more effectively, making it harder for scammers to operate.

    “It’s great that Kiwis are increasingly reporting scams, but there is still a lot of room for improvement. Too many of us don’t report scams, or even tell loved ones, due to embarrassment or shame, but we need to remember that this is a scammer’s fulltime job.

    “Every minute of every day, they are out there thinking of new ways to take people’s hard-earned money. There is nothing to be embarrassed about if you do experience a scam, and by reporting it, you could be helping someone avoid being scammed in the future.”

    Top three scams 

    Government impersonation scams were the most prevalent over the last 12 months (45%), followed by bank impersonation scams (31%), and fake lottery, prize or grant scams (24%).

    Email was found to be the most common channel for scams (40%), followed by text (34%), and social media (28%).

    “Scammers are becoming increasingly sophisticated, impersonating trusted brands and institutions and exploiting a range of channels to deceive New Zealanders,” says Kai Fong.

    Despite the rise in scams, the research shows that educating New Zealanders to spot and avoid scams is helping to keep them safe.

    “Around two-thirds of those surveyed reported having seen educational material about scam prevention,” he says. “Knowledge is power. We want as many people as possible to get Scam Savvy as the more we know about scams, the better equipped we are to spot and avoid them.”

    Our Scam Savvy tools are available online at www.getscamsavvy.co.nz.

    Top tips to get Scam Savvy

    • Don’t click on links or open attachments sent by someone you don’t know or seem out of character for someone you do know. Hover over links to reveal the actual site.
    • If it doesn’t seem right, call the sender using contact details you already have or that are available on their public website.
    • Urgency is a red flag – scammers will try to rush you.
    • Banks will never ask for your bank account details, password or pin number, nor will they send you an email or text message with a link asking you to log in.
    • Keep your computer and phone security software up to date.
    • If you think you’ve been scammed, contact your bank as soon as possible.
    • Trust your gut – if it feels wrong, it probably is.

    Scam Savvy Research

    Other key findings from BNZ’s research:

    • One in ten New Zealanders have fallen victim to a scam in the last 12 months, losing money, personal information, bank or card details, or device access
    • Of those that lost money, two thirds (69%) lost under $500, 26 percent between $500 and $5,000, and five percent over $5,000
    • Email is the most common way to have fallen victim to a scam (40%), followed by text (34%), social media (28%), phone calls (18%), online websites (9%) or by someone you know (3%)
      • Those aged 15 – 34 years are more likely to have been targeted via social media (44%)
      • Social media and online website scams are harder for victims to recover stolen money, with 56 percent of victims who were targted via social media and 22 percent of victims targeted via an online website saying they couldn’t recover their money
    • Those over the age of 50 are more likely to be targeted by tech scam calls
    • One in ten males has responded to a dating or romance scam in the last 12 months, significantly higher than females
    • Females are more likely to be more concerned about their personal data online

    Business stats

    • 45 percent of SMEs reported being the target of scam attempts in the last year
    • Of those targeted, one third have responded to a scam attempt, by clicking on a link (15%), or replying to the scam via email, text, or phone call (14%)
    • Almost half (47%) of scam attempts are by email, with another 38% by text message. One third (33%) are by phone calling, with websites (19%) and social media (18%) rounding out the top 5
    • One in five (22%) of SMEs reported falling victim to a scam in the last 12 months
    • 43 percent of businesses that fell for a scam reported a financial loss. Of those, more than half lost less than $500, 38 percent between $501 and $5,000, and 11 percent lost more than $5,000. It is important to note that losses to scams are not just financial, and can include data loss, operational impacts, technical damage and/or reputational damage

    The post Nine out of ten targeted by scams, but New Zealanders getting more scam savvy appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ scores naming rights partnership with the NZ Breakers; teams up with Kiwi Hoops to grow grassroots basketball

    Source: BNZ statements

    The New Zealand Breakers, the country’s top professional basketball team, are set to embark on a new chapter as the BNZ Breakers, thanks to a new naming rights partnership with the Bank of New Zealand (BNZ). The naming rights partnership was announced in Auckland this morning.

    In addition, BNZ is joining forces with Kiwi Hoops, Basketball New Zealand’s junior basketball programme, to help grow the sport at the grass roots level and foster the next generation of talent. These partnerships come hot on the heels of the bank’s naming rights sponsorship of the BNZ Northern Kāhu women’s basketball team, confirmed last month.

    BNZ CEO Dan Huggins says the bank is thrilled to back the Breakers and further cement its support for the sport. “From nurturing young talent in Kiwi Hoops, to bolstering women’s basketball with the Northern Kāhu, and now backing the premier professional team, the BNZ Breakers, our support is generational.”

    “Through these partnerships, we want to inspire the next generation and provide resources and opportunities that will help grow the sport, promote physical health, and foster a sense of community. We’re looking forward to seeing the positive ripple effects of these partnerships, from the school playground to the professional court.”

    Matt Walsh, majority owner of the Breakers, welcomed the new partnership. “We’re delighted to partner with BNZ, an organisation that shares our passion and commitment to basketball and the positive role it plays in schools and communities across Aotearoa. This partnership will provide us with the support to continue our success on the court and expand our programmes in the community.”

    “Our captain Tom Abercrombie is a shining example of how the Breakers is a pathway for local players to create a career out of basketball.  Tom went to school less than four kilometres from our club headquarters on Auckland’s North Shore and has travelled the world playing across the globe.

    “Next month he will play his record 400th game for the Breakers in our opening game of the season against the Cairns Taipans at Spark Arena.”

    The BNZ Breakers are actively involved in a range of community outreach initiatives, including their Champions Programme, teaching children aged 5-12 years about goal setting, nutrition, active lifestyles, and basketball fundamentals.

    Kiwi Hoops

    Kiwi Hoops is the Basketball New Zealand junior basketball programme. It aims to introduce the sport to young people, foster a love for the game, and develop skills. The partnership with BNZ will support the expansion of the programme, which already reaches 26,000 kids per year, to engage even more young people across New Zealand.

    Dillon Boucher, CEO of Basketball New Zealand, says, “By partnering with BNZ, we can expand our reach and impact, providing more opportunities for young Kiwis to engage with basketball. This partnership will not only help us grow the sport at the grassroots level, but also build a strong foundation for the future of basketball in New Zealand by developing the next generation of players.”

    Huggins concludes, “At BNZ, we’re committed to growing the social, cultural and financial wellbeing of New Zealanders, and believe in the power of sport to bring people together and inspire positive change. We’re proud to be part of the journey of basketball in New Zealand, and we can’t wait to see where these partnerships take us.”

    The post BNZ scores naming rights partnership with the NZ Breakers; teams up with Kiwi Hoops to grow grassroots basketball appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: HY24 Results: Resilient result in subdued economic environment

    Source: BNZ statements

    Bank of New Zealand (BNZ) today announced a statutory net profit of $762 million for the six months to 31 March 2024, a decrease of $43 million or 5.3% on the prior year.

    This reflects continued growth in BNZ’s lending and deposits, and an increase in operating expenses, up $64 million or 11.1%, as BNZ invested in its people and digital capability.

    BNZ CEO Dan Huggins says this is a resilient result in a subdued economic environment and the bank is in a strong position to continue supporting its customers.

    “High interest rates and cost of living pressures continue to impact business and household finances.

    “While easing inflation is encouraging, it is expected to remain outside of the Reserve Bank’s target band until the end of year. Economic conditions are likely to remain challenging until there is a material reduction in interest rates.

    “Supporting our customers through these challenging times remains our top priority.

    “Our teams continue to proactively contact customers who we have identified as potentially needing additional support. For customers feeling under pressure, our message is get in touch.”

    Revenue for the first six months was broadly flat at $1,770 million, while Net Interest Margin dropped by eight basis points on the prior year, reflecting strong competition across the banking sector and a change in deposit mix as customers shifted funds into term deposits to take advantage of higher interest rates.

    Mr Huggins says despite the challenging operating conditions, the bank has maintained momentum across the business.

    “Our team is focused on serving our customers brilliantly every day and supporting their ambitions, whether that’s investing in their business or buying their first, or next, home.”

    “This focus is paying off with more New Zealanders choosing to bank with BNZ.”

    BNZ’s total lending increased $2.4 billion or 2.4% in the first six months, with home lending up $1.1 billion or 1.9% and business lending up $1.3 billion or 3.0%. Total customer deposits increased by $1.5 billion or 1.9%.

    Innovating to make banking simpler and easier

    “We are always looking for new ways to integrate the latest technology into the way we work and how our customers’ bank to enhance their experience and make banking simpler and easier,” says Mr Huggins.

    “We continue to invest heavily in protection measures to help keep our customers safer online, while also delivering digital solutions designed to free up time in their busy lives.

    “Initiatives like our digital onboarding process which makes switching banks easier and faster for new customers by enabling them to open accounts digitally without having to go into a branch.

    “Similarly, Open Banking, which will allow customers to share their data safely with third parties and enable more personalised products and innovative services for customers.”

    BNZ has been leading the market in developing Open Banking APIs, with more than 250,000 BNZ customers already benefiting from secure budgeting and reconciliation tools and alternative payment options.

    “We’re committed to continuing to drive innovation across our business to provide more value to our customers,” says Mr Huggins.

    An unaudited summary of financial information for the six months ended 31 March 2024 follows:.
    .

    The post HY24 Results: Resilient result in subdued economic environment appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ warns of increased tax scams as tax time approaches

    Source: BNZ statements

    As tax time approaches, Bank of New Zealand (BNZ) is urging New Zealanders to be alert to the heightened risk of tax-related scams.

    “The end of the financial year is a prime opportunity for scammers, who take advantage of tax time to trick and defraud New Zealanders out of their money,” says Ashley Kai Fong, BNZ’s Head of Financial Crime.

    “Scammers exploit the urgency and importance of tax-related matters, creating fraudulent but realistic scenarios about tax debts or refunds that can seem both timely and credible,” he says.

    “Tax scams are particularly effective because people often have genuine interactions with the IRD during this time of year,” says Kai Fong. “Scammers exploit this familiarity to make their attempts more believable. It’s crucial to verify the authenticity of any unsolicited communication claiming to be from government agencies.

    “A recent example we’ve seen is of customers receiving an email claiming to be from the IRD. The email, which originates from an unofficial email address, contains a link that directs customers to a fraudulent IRD website, which then leads them to a fake bank login page.

    “Examples like this serve as a stark reminder of the importance of being vigilant and cautious when receiving unsolicited emails, even if they appear to be from trusted sources like the IRD or government agencies.”

    New Zealanders should always access their accounts through official websites, rather than clicking on a link which directs them to do so.

    “At this time of year, be particularly wary of emails or communications about tax refunds or debts. Verify the source thoroughly, and if in doubt, contact the IRD via the details on its official website. Remember, the IRD will never prompt you to log in to your online banking via their website or ask you to provide your banking login credentials.

    “The simplest yet most powerful defence you have is being aware. Trust your instincts and always take a sec to check before providing sensitive information.”

    In case of suspicious activity or suspected scams, BNZ encourages anyone who believes they may have been targeted by a scam to contact their bank immediately. For more information on protecting yourself from scams, visit www.getscamsavvy.co.nz.

    The post BNZ warns of increased tax scams as tax time approaches appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ brings back the branch experience

    Source: BNZ statements

    Bank of New Zealand (BNZ) today announced all of its branches across New Zealand will open at least five days a week by April 2025, in response to growing customer demand for more face-to-face interactions.

    Anna Flower, BNZ Executive Personal and Business Banking, says BNZ’s focus is on being available for our customers when they need us.

    “In recent years, we saw a massive shift in customer demand towards online and call centre services, which was accelerated hugely during the pandemic. We adapted quickly at that time by moving our bankers to where our customers needed us most, which saw us reduce the number of days many of our branches were open,” says Flower.

    “Post-Covid, customer preferences have continued to evolve, and in those moments that matter, such as starting a business, dealing with a bereavement, or buying a home, we’ve heard from our communities and our personal and business customers that they want more opportunities to talk to us face-to-face.

    “For those significant moments, we understand it’s the personal touch that counts. That’s why we’re bringing back 5 day a week opening to give customers access to our bankers’ expertise when and where they need us.

    “This means where there’s a BNZ branch near you, the doors will be open 9.30am until 4.00pm, a minimum of 5 days a week,” says Flower.

    The first BNZ branches to transition to opening five days a week are:

    • Feilding
    • Matamata
    • Oamaru
    • Te Awamutu
    • Thames
    • Te Puke
    • Wānaka

    The remaining branches will move to full week-day operating hours by April 2025.

    The post BNZ brings back the branch experience appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ’s new Māori Business Sentiment Survey reveals challenges and opportunities amid economic headwinds

    Source: BNZ statements

    Bank of New Zealand (BNZ) today released the findings of its inaugural Māori Business Sentiment Survey, aimed at providing insights into the current state and future prospects of Māori enterprises. The survey highlights the economic challenges being faced by Māori businesses, while also revealing their resilience and potential for growth.

    Whetu Rangi, BNZ’s Head of Māori Business, says the survey aims to address the lack of comprehensive data on the experiences and perspectives of Māori businesses.

    “The data gap around the sector has been a barrier to understanding and supporting the Māori economy. By launching this survey and committing to conducting it regularly, we are aiming to bridge this gap and foster ongoing collaboration and knowledge sharing. We believe that this survey will become a valuable tool to promote better understanding of the sector and help facilitate the flow of capital within the Māori economy.”

    The survey, which received 125 responses from those involved with Māori businesses, revealed that economic conditions pose the most significant challenge for Māori enterprises, with 71% of respondents selecting it as their top concern. The findings also showed that nearly half (46%) of the respondents observed deteriorating business conditions over the past 12 months, while only a small fraction (15%) witnessed improvements.

    Mike Jones, BNZ’s Chief Economist, says that the survey results broadly mirror weak business confidence across the economy.

    “The sentiment expressed in these findings echoes what we’re witnessing in other parts of the economy as we navigate through the trough of the economic cycle. If anything, the confidence levels amongst survey respondents are on the weaker side of broader confidence indicators. This may reflect the Māori economy’s considerable investments in agriculture, forestry, and property – sectors that are currently under some strain,” he says.

    Other findings include:

    • The majority (82%) of respondents expect costs to increase further over the coming 12 months.
    • Over the coming 12 months, more survey respondents expect profitability to deteriorate than to improve (27% increase vs. 33% decrease).
    • A similar proportion of respondents expect employment levels in their business to drop (29% increase vs. 34% decrease)

    Opportunities amidst adversity

    Despite the challenges, the survey also revealed signs of resilience and optimism among Māori businesses. While only 15% of respondents saw improvements in business conditions over the past year, a higher proportion (26%) anticipate better conditions in the coming 12 months.

    Furthermore, more than 1 in 3 (37%) of those responding to the survey intend to boost investment in the coming year versus 24% that expect it to decrease. This may be signalling confidence in future growth potential.

    “The investment plans reported in our survey are more robust compared to what we’ve seen in other business confidence surveys. As the economic cycle matures, we’ll be closely monitoring whether these intentions gain further momentum,” says Jones.

    About the BNZ Māori Business Sentiment Survey

    The launch of this survey is a continuation of BNZ’s commitment to Māori business and contributes to its wider strategy to facilitate financial solutions for Māori and enable whānau Māori and businesses to prosper.

    More detailed findings and analysis are available here.

    An infographic is available here.

    The survey was in field May 2024 with base n = 125. Results are indicative, collected using a sample of convenience including BNZ Māori business customers. Results are intended only for discussion and should not be relied upon for decision-making or regarded as representative of the Māori business sector as a whole. For more information on how BNZ can support Māori businesses, visit Māori Business – BNZ.

    The post BNZ’s new Māori Business Sentiment Survey reveals challenges and opportunities amid economic headwinds appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ latest big name to invest in AgriZeroNZ

    Source: BNZ statements

    Bank of New Zealand (BNZ) is the latest business to join the growing lineup of private sector companies backing AgriZeroNZ, alongside government, to get emissions reduction tools into Kiwi farmers’ hands sooner.

    Announcing the new shareholder today, Hon Todd McClay, Minister for Agriculture & Trade, confirmed the government would match BNZ’s $4 million investment, boosting AgriZeroNZ’s funds by $8milllion to total $191 million.

    BNZ joins The a2 Milk Company, ANZ Bank New Zealand, ANZCO Foods, ASB Bank, Fonterra, Rabobank, Ravensdown, Silver Fern Farms and Synlait with a combined 50% shareholding of the joint venture (JV). With the government’s increased investment, it owns the remaining half through the Ministry for Primary Industries (MPI).

    AgriZeroNZ Board Chair, Sir Brian Roche KNZM, says this provides a welcome boost in funds to achieve the JV’s ambition and maintain the multibillion-dollar agricultural export trade.

    “I’m pleased more of the private sector is joining us to help get practical tools into farmers’ hands.

    “New Zealand farmers are highly efficient producers of milk and meat for the world, but global companies that pay a premium for these products – such as McDonald’s, Nestlé, Danone, Tesco and Sainsbury’s – are all pushing deep into their supply chain for emissions reduction, with ambitious scope 3 targets.

    “These customers want to see more progress and we need to act now, or we risk losing these high-end customers and potentially breaching trade agreements. Further to this, competitor markets with more intensive farms are getting access to new tools to reduce emissions so they could take our place in supplying these customers.

    “There is a very real and very disruptive risk to our agricultural sector from the need to reduce emissions but there is also an opportunity to stay among the most efficient producers in the world if we can get the right tools to our farmers.

    “We’re confident that with our ambition, expertise, and increasing reach through the private sector, we’ll have 2-3 tools in widespread use by 2030.”

    Sir Brian Roche KNZM, AgriZeroNZ Board Chair, says the JV Is confident it will have 2-3 tools in widespread use by 2030

    BNZ CEO Dan Huggins says the bank is pleased to support AgriZeroNZ and partner with government and some of the country’s largest primary sector businesses to back its farming customers by investing in tools to help reduce emissions and maintain New Zealand’s competitive advantage in agriculture.

    “BNZ has a long history of banking New Zealand farmers, and over that time we have worked alongside our farming customers as they have continually adapted and innovated to meet changing market dynamics.

    “This public-private partnership approach to addressing on farm emissions continues that tradition, helping to ensure New Zealand maintains a resilient and productive agricultural sector into the future,” he says.

    Dan Huggins, BNZ CEO, says it is investing in tools to help reduce emissions and maintain New Zealand’s competitive advantage in agriculture.

    AgriZeroNZ is a world-first public-private partnership with an ambition to ensure all farmers in Aotearoa New Zealand have equitable access to affordable, effective solutions to reduce biogenic methane and nitrous oxide emissions, supporting a 30% reduction by 2030 and drive towards ‘near zero’ by 2040.

    Since being established in February 2023, the JV has committed more than $29M across 10 high impact opportunities to bring emissions reduction solutions to market for Kiwi farmers. This includes a methane-inhibiting bolus, novel probiotics, methane vaccine development, and low emissions pasture.

    It recently raised $18million from The a2 Milk Company, ANZ Bank New Zealand and ASB Bank becoming shareholders in April, with their funding also matched by government.

    AgriZeroNZ has over 77 potential investment opportunities on its radar for review as it continues scanning the globe for solutions which could work on New Zealand farms, to invest and drive development towards a pasture-based solution. It is also working with officials to clarify the regulatory pathway in New Zealand for tools to be used on-farm.

    The post BNZ latest big name to invest in AgriZeroNZ appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: Wellington skyline gets a facelift as BNZ’s new building in the central city officially opens

    Source: BNZ statements

    Te Whanganui ā Tara (Wellington’s) skyline is evolving as Bank of New Zealand’s (BNZ) 15-storey new home in the central city – BNZ Place – today officially opened its doors to colleagues and customers.








    Under construction since 2020, the architecturally designed building, occupies a full city block on the corner of Whitmore Street and Customhouse Quay, and was officially opened by Finance Minister Nicola Willis at a special event this morning.

    CEO Dan Huggins says the striking new building reflects BNZ’s longstanding commitment to the capital city.

    “BNZ has been proudly serving Wellington’s communities for 160 years, and BNZ Place not only reflects our commitment to the city but also our vision for the future. We’re thrilled that we are able to share this vibrant and innovative space with our customers, colleagues, and the people of Wellington.”

    Designed to be modern and resilient, the building’s unique shape and structural design was informed by extensive research, including wind tunnel testing and seismic hazard assessments. The new headquarters represents a fresh start after the former BNZ building on Waterloo Quay was demolished in 2019, one of several buildings deemed irreparable after the Kaikōura earthquake in 2016.

    BNZ Place offers a branch and customer service centre for retail and business banking and a public café on the ground floor. As New Zealand’s largest business bank, BNZ’s Partner Centre offers BNZ business customers state-of-the-art meeting rooms and office space with views of Wellington’s harbour which can be booked and utilised at no cost.

    Newcrest Director Lincoln Fraser says, “We are proud to welcome BNZ’s customers and colleagues into their new Wellington home at the completion of what has been an exciting and highly collaborative project. The Newcrest and BNZ project teams have worked closely together to deliver a landmark building with market leading resilience and energy efficiency.”

    BNZ Place at 1 Whitmore Street combines sustainability and innovation, aiming for a 5-star green rating with features like high-performance solar control glass and energy-efficient systems, supported by base isolation and a structural steel diagrid. Efficient floorplates, a double-height high entry lobby, inter-floor stairs, a rooftop courtyard, and panoramic views contribute to the state-of-the-art facility.

    The design, development and internal fitout of the building also provided an opportunity for BNZ to support its business customers, with Studio Pacific Architecture, Vidak, Alaska Construction, Europlan, and Egmont Dixon all contributing to the build. In addition, the bank collaborated with another BNZ customer, Maxwell Rodgers, using their sustainably sourced wool fabrics to re-upholster and up-cycle furniture from the bank’s previous office, reducing waste to landfill.

    “BNZ Place firmly cements our commitment to the capital, and we look forward to welcoming everyone to our new home,” Mr Huggins says.

    Tracing BNZ’s roots in Wellington

    BNZ’s history in Wellington began in 1862 with temporary offices on Willis Street. Over the years, BNZ has been a pioneer in architectural innovation, from the first drive-in bank in New Zealand to the construction of the Aon Centre in Wellington in the 1980s, the tallest building in New Zealand at the time of construction.

    The bank’s architectural legacy includes the innovative use of reclaimed land for its early headquarters, the 1901 building designed by Thomas Turnbull, the purpose-built BNZ Centre in 1985, and the transition to a 5-star green building on the Wellington waterfront.

    A brief history

    In 1862, BNZ purchased a triangular section on reclaimed land with a frontage along Lambton and Customhouse Quay. The architect was William Mason of Dunedin. The location of the entrance door was later moved due to Wellington’s high winds.

    Wellington 1863 building. Cnr Lambton and Customhouse Quay.
    Wellington 1863 building. Cnr Lambton and Customhouse Quay. Photograph taken 1878 and shows the relocation of the main doorway.
    Wellington premises built in 1901 (before removal of parapet) c.1920
    Wellington Branch premises 1901 (after parapet removed) photo taken 1978.

     

    In 1899, the earlier bank and adjoining Brandon Building were demolished to be replaced with a larger building following the subsequent purchasing of an additional 4 sections of land.

    Since 1901, three other buildings on the block bounded by Lambton and Customhouse Quays and Hunter Street were purchased and occupied by various departments of BNZ’s Headquarters.

     

    In 1985, the purpose built BNZ Centre was opened across the road. An underground tunnel linked the Old Bank and the New ‘Black Tower’. At the time of its construction, it was the tallest building in NZ (replaced by the BNZ Tower when that opened in Auckland in 1986). It remained the tallest building in Wellington until the opening of the Majestic Centre in 1991.

    BNZ Centre, Wellington 1984

     
    In 2009 BNZ moved out of the BNZ Centre and leased a purpose-built office building located on the Wellington waterfront, referred to as ‘Harbour Quays’. Owned by Centre Port, this building was a 5-star green building, later achieving 6 start for the interior fitout. Following the November 2016 earthquake, the building remained empty with BNZ staff re-located into temporary office sites around the Wellington CBD. The building has since been demolished.

     
     

     

     

    		 BNZ colleagues from The Terrace, Spark Central and Ricoh House are now reunited at BNZ Place, Wellington. A branch, community centre and collaborative workplace will co-exist in the same building in the heart of Wellington’s CBD. ​​​​​​​​​​​​​​​​​​​​​​

    The post Wellington skyline gets a facelift as BNZ’s new building in the central city officially opens appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ offers support for East Coast and Hawke’s Bay customers impacted by severe weather

    Source: BNZ statements

    BNZ is offering targeted support for customers affected by severe weather and flooding in Hawke’s Bay and the East Coast.

    “We recognise that some of our customers may be facing unexpected challenges due to the severe weather,” says Anna Flower, BNZ Executive Personal and Business Banking.

    “As they focus on the clean-up and recovery, we want to offer practical support to help relieve some of the financial pressure during this time.”

    Available immediately, BNZ is offering a range of targeted assistance options for affected customers on a case-by-case basis, from access to temporary overdrafts for both personal and business customers to the ability to review home lending facilities.

    “There are also a range of other options available, especially for customers who are facing hardship, so I encourage people to get in touch so we can see how we can help,” she said.

    Business and agribusiness customers should reach out to their BNZ Partner. Small business owners can call 0800 BNZSME, while personal banking customers can access support through BNZ’s digital platforms or by calling 0800 ASKBNZ.

    BNZ PremierCare Insurance customers who need assistance can call IAG NZ on 0800 248 888 or submit an online claim https://iagnz.custhelp.com/app/bnz

     

    The post BNZ offers support for East Coast and Hawke’s Bay customers impacted by severe weather appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: Money Month 2024: BNZ survey reveals retirement concerns

    Source: BNZ statements

    A BNZ survey has highlighted the importance of financial education as Sorted Money Month 2024 begins. Coordinated by Te Ara Ahunga Ora Retirement Commission, the annual campaign aims to equip New Zealanders with education, resources, and tools to better navigate their financial journey.

    The survey* uncovered some significant concerns about retirement preparedness:

    • Nearly four in ten (39%) respondents aren’t confident they’ll have saved enough for retirement
    • One quarter lacked confidence in making investment decisions, with younger people (aged 25-44), lower-income households, and non-homeowners particularly affected
    • 74% felt they can’t rely on NZ Super for their retirement, including those who believed it won’t provide sufficient income, or had concerns it may change in the future

    Anna Flower, Executive, Personal and Business Banking at BNZ, says, “These findings highlight the importance of financial education and early planning. Money Month is an opportunity for people to take that crucial first step towards financial preparedness.”

    Continuing and building on last year’s theme “Pause. Get sorted,” Money Month 2024 focuses on actions to help people grow their money and build resilience.

    “Understanding concepts like compounding interest and starting your savings journey early – even with small, regular amounts – can significantly enhance financial outcomes,” Flower says.

    The survey also highlighted KiwiSaver’s role in long-term financial health, with 89% of respondents enrolled. However, 16% revealed they aren’t making regular contributions, highlighting the need for ongoing education and engagement.

    “People think investing is for the wealthy, but investing is for everyone, and KiwiSaver is the easiest and most accessible way to get started,” Flower says.

    “For those not contributing, it’s important to understand that you could be leaving money on the table. With KiwiSaver, in addition to your own savings, you can benefit from both government and employer contributions. These additional contributions can make a real difference to your savings over time, helping put you in a much stronger position for retirement or buying your first home.”

    Supporting your goals

    While Money Month shines a spotlight on financial health, BNZ is committed to supporting financial wellbeing throughout the year.

    “Our free Banking Reviews are designed to align customers’ banking with their financial goals and enhance their overall financial health,” Flower says.

    These reviews involve building a comprehensive understanding of an individual’s financial goals and needs – from day-to-day transactions to borrowing, investments, and insurance. This holistic approach allows for tailored advice and personalised recommendations to support overall financial health.

    “Our experts are always here to discuss your savings goals, advise on home loans, or help you use our BNZ KiwiSaver Scheme Navigator to understand how to get on track with your retirement savings. These reviews ensure that banking solutions work for what’s important to customers now and in the future,” she says.

    In addition, BNZ offers a range of online tools and resources to help New Zealanders take control of their finances. The BNZ app’s Activity tab enables customers to track their spending, categorise transactions, and manage cashflow across personal accounts. For homeowners, the MyProperty tool provides insights into home loans, allowing users to explore scenarios like changing repayments or assessing the impact of different interest rates and what impact this may have on their mortgage free date. These digital tools, along with comprehensive calculators and other resources, support customers in making informed financial decisions.

    “Don’t let another year pass without taking charge of your financial future. Whether you’re just starting out or looking to optimise your investments for retirement, now is the time to act. Small steps today, like ensuring you’re making the most of your KiwiSaver or booking a Banking Review, can lead to meaningful improvements in your financial well-being tomorrow.”

    For more information on Money Month initiatives and to access financial resources, visit www.sorted.org.nz

    The post Money Month 2024: BNZ survey reveals retirement concerns appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ simplifies home loan offering, delivering savings for first home buyers and low equity borrowers

    Source: BNZ statements

    In a move that will make borrowing simpler and more affordable for first home buyers and low equity borrowers, Bank of New Zealand (BNZ) today announced changes to its home loan offerings.

    In addition to a raft of home lending interest rate reductions this morning, BNZ is moving to a single set of home loan fixed interest rates, simplifying its previous two-tier structure of Classic and Standard rates. This change removes the previous 0.60% difference in the rates available to borrowers with less than 20% equity.

    New borrowers with less than 20% equity will benefit from the lower Standard fixed interest rates, resulting in reduced overall borrowing costs for these customers. Low equity premiums will continue to apply based on individual customers’ equity positions.

    BNZ Executive Customer Products and Services Karna Luke says these changes will make a real difference for many New Zealanders.

    “The simpler home loan rates mean that all customers will be able to access our best home loan rates, even if they don’t have 20% equity.

    For example, a first home buyer borrowing $500,000 with a 15% deposit on a 30-year term would save $78 per fortnight based on the current 1-year fixed rate advertised on the BNZ website*. Over a 1-year fixed term, this amounts to savings of more than $2,000.

    “These changes reflect our commitment to growing the long-term financial wellbeing of all New Zealanders,” says Luke.

    “By making home loans simpler, we aim to help more Kiwis to achieve their home ownership aspirations.”

    The new pricing takes effect from today for new customers and will apply to existing low equity customers when they next refix their home loan.

    *1 year interest rate of 6.55% as of 20 August 2024.

    The post BNZ simplifies home loan offering, delivering savings for first home buyers and low equity borrowers appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: The economy in ten pics

    Source: BNZ statements

    • RBNZ kickstarts the easing cycle
    • Greenlights a slow ‘n’ steady downtrend
    • Helps the 2025 economic outlook, but near-term growth picture still troubled
    • With labour market to weaken further
    • Housing market in focus

     

    View PDF here

     

    Chart 1: So it begins

    There was nothing in the Reserve Bank’s (RBNZ) announcement to greatly challenge our view of the world. The Official Cash Rate (OCR) was lowered 25bps to 5.25% as we expected. The interest rate brake is still on, just less so than before.

    The most important aspect of the meeting in our view was the confirmation that the OCR will move a lot lower over the coming 18 months.

    It needs to. Our rough estimate of the ‘real’ (inflation-adjusted) cash rate has increased in recent months, even with this week’s cut. And it’s a long way down for the OCR to the RBNZ’s estimate of the long-run neutral rate around 3%.

    Chart 2: Chop

    The RBNZ’s updated forecasts were a shadow of their former selves. GDP growth, inflation and OCR forecasts got a chop while unemployment rate expectations were lifted ½% or so to a 5½% peak.

    This brings the RBNZ’s view of the economy down to, or even a touch weaker than, where we’ve been seeing things. Importantly, CPI inflation is now seen well inside the 1-3% target range in Q3 (2.3%y/y from 3.0% in May). As of yesterday, we concur.

    It means there’s a higher hurdle for incoming data to surprise the RBNZ on the downside. That doesn’t rule out a larger 50bps OCR cut being deployed at some point, but it does lean against the possibility in the short term.

    Chart 3: Joining the rate race

    Having been something of an outlier for a while, NZ is now back in the policy easing peloton. Most developed markets anticipate sizeable interest rate cuts over the coming 12 months.

    Markets price a better than even chance of a 50bp start to the US Federal Reserve’s easing cycle next month which, if delivered, may embolden global rate cut pricing further.

    Of those markets covered opposite, implied policy easing to February 2025 is most aggressive for the US (-185bps), NZ (-150bps), and Canada (-130bps), with Australia (-65bps) and Japan (+10bps) at the other end of the field.

    Chart 4: US sniffles

    Global financial markets have recovered much of their poise following the steep equity market declines of early last week. Sentiment is not what it was though. Investors are suddenly alert to any number of global fragilities.

    Most of the ‘blame’ for the wobble has been pinned on cooling tech/AI exuberance and US growth concerns. The outsized reaction last week may reflect the additional, creeping reliance on the US to drive the global expansion this year. The old ‘US catches a cold’ adage is still relevant.

    Chart 5: Jobs growth stalled

    The number of people employed nudged up 0.4% in the June quarter, according to official figures released last week. We’d pencilled in a small decline. Unemployment still rose to 4.6% as expected.

    Q2’s employment kick is unlikely to be repeated this quarter, and it also doesn’t change the broader narrative of jobs growth effectively stalling around mid-2023.

    Amongst the sectoral detail, it’s clear that the construction sector has been at the vanguard of the changing employment market.

    Chart 6: Relocating for work

    The lift in NZ’s unemployment rate in Q2 maintained a ½ percentage point gap to the (4.1%) Aussie equivalent.

    It doesn’t sound large, but that gap is the widest since 2013. Not coincidentally, net migration outflows to Australia are also running at the strongest level since 2013. People move to where the jobs are.

    Our forecasts imply both trends have got a ways to run. A climb in the NZ unemployment rate to a 5.5% peak in early 2025 against a lower (4.6%) peak in Australia would, on past form, be consistent with an acceleration in net outflows.

    Chart 7: Green f(lags)

    Wage inflation peaked in NZ about a year ago. We saw another notch in the downtrend last week. The private sector Labour Cost Index eased to 3.6%y/y in June, down from 3.8% the prior quarter and the 4.5% peak.

    More of the same easing is expected over the coming 12 months. It’s something that should help drain still-elevated domestic services inflation pressure. So, it’s not that high interest rates have been ineffective on non-tradables inflation, it’s that the impacts take time to turn up. The lags are real!

    Chart 8: No retail respite

    The trend in NZ retail card spending abruptly turned in early 2023, and it’s been downhill ever since. July’s 0.1%m/m contraction was the 6th consecutive monthly decline. Discretionary categories remain the hardest hit.

    The weakness is even more pronounced once buoyant population growth is accounted for. Our estimate of the average monthly spend per (working age) person is 8% below March 2023 levels. It’s a deeper and longer contraction than during the 2008 GFC.

    We’re hopeful the downtrend soon stabilises. Tax and interest rate cuts are supports, but falling population growth and job security are not.

    Chart 9: Housing market in focus

    The release of July REINZ housing market numbers has been shunted out to Tuesday, thus missing the cut for this edition of TEITC.

    But, it’s fair to say, housing stats will be watched more closely than usual as folk scour for green shoots in a sector likely to be one of the earlier responders to (recent and expected) falls in retail interest rates. There are stirrings in some of the anecdote and surveys, but we think the prognosis is more stabilisation than acceleration, for now.

    In the least, we’d expect a hearty bounce-back in July sales activity following the outsized, Matariki holiday-related, drop in June. That’s what we saw from this week’s Barfoot & Thompson figures covering a share of the Auckland market.

    Chart 10: Food for thought

    Food prices lifted 0.4%m/m (seasonally adjusted) in July. Prices have been flattish for the past year, but they’re still up 24% on 2020 levels.

    As you’d expect, there’s been a fair bit of variation amongst the components over that time. If you’re partial to an omelette and/or yogurt for breakfast you will be feeling the pinch a lot more than some. At least your morning brew is still, relatively speaking, cost effective.

    To subscribe to Mike’s updates click here

    Disclaimer: This publication has been produced by Bank of New Zealand (BNZ). This publication accurately reflects the personal views of the author about the subject matters discussed, and is based upon sources reasonably believed to be reliable and accurate. The views of the author do not necessarily reflect the views of BNZ. No part of the compensation of the author was, is, or will be, directly or indirectly, related to any specific recommendations or views expressed. The information in this publication is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Any statements as to past performance do not represent future performance, and no statements as to future matters are guaranteed to be accurate or reliable. To the maximum extent permissible by law, neither BNZ nor any person involved in this publication accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication.

    The post The economy in ten pics appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Reportage: BNZ the first NZ bank to achieve next open banking (open data) milestone

    Source: BNZ statements

    Bank of New Zealand (BNZ) has taken another critical step toward open banking—better described as open data—becoming the first bank in New Zealand to meet a major milestone set by Payments NZ.

    BNZ has implemented the Payments NZ Account Information API v2.1 standards, which when open banking is fully operational, will enable New Zealanders to safely and securely share their financial information with approved providers.

    “While it sounds a little dull, API v2.1 is really the engine room of open data. It’s the piece of the tech puzzle that means our customers have full control over what data they share, who they share it with and importantly, it gives them control to stop sharing their data too,” says Karna Luke, BNZ’s Executive of Customer Products and Services.

    Payments NZ plays a key role in establishing the open banking system and has set New Zealand’s major banks the task of implementing Account Information API v2.1 standards by November this year. This follows the May 2024 requirement for major banks to support payments via APIs, enabling direct account payments through third-party apps. BNZ achieved this in 2023.

    “That we’ve been able to reach this milestone three months ahead of the deadline reflects the commitment that BNZ has made to support the implementation of open banking. Over 250,000 BNZ customers are already benefitting from innovative services made possible through this technology, including services from Xero, Volley, and Blinkpay, all of which connect to BNZ through secure APIs,” says Luke.

    What it all means for customers

    This secure access to real-time financial data empowers third-party providers and fintechs to provide customers with new, innovative, and highly personalised financial products and services. Potential use cases include:

    • Personalised budgeting tools: Apps that offer tailored budgeting advice based on real-time financial data and spending habits, helping users manage their finances more effectively.
    • Customised savings plans: Solutions that design personalised savings plans and automate transfers based on users’ financial behaviour and goals.
    • Advanced financial insights: Tools that provide detailed analysis of spending patterns and identify new financial opportunities, enhancing users’ understanding of their financial situation.
    • Streamlined loan applications: More efficient loan processes that simplify and speed up approval by leveraging comprehensive account information.
    • Fraud detection and prevention: Facilitating third party apps or services to use real-time account data to identify unusual activity, improving security.

    “Being the first bank in New Zealand to deliver this API demonstrates our focus on helping drive the future of open banking in New Zealand,” says Luke.

    “We’re excited to see more fintechs and developers join those we’re already working with to leverage this technology to create innovative solutions that will benefit our customers and the country.”

    “It’s also important to remember that banking services are just the beginning. The Customer and Product Data Bill currently progressing through Parliament will establish a Consumer Data Right (CDR) in New Zealand, enabling open data sharing across multiple sectors.”

    This will further unlock digital innovation, making it possible to do things like instantly and securely verifying your identity online, via the information held about you by your bank, insurer or power company, or finding the best deal across utility or insurance companies and switching easily.

    For more information about the Account Information API v2.1 and its capabilities, please visit https://developer.bnz.co.nz/

    The post BNZ the first NZ bank to achieve next open banking (open data) milestone appeared first on BNZ Debrief.

    MIL OSI Analysis –

  • MIL-OSI Russia: IMF Executive Board Concludes the 2024 Article IV Consultation with Uganda

    Source: IMF – News in Russian

    September 9, 2024

    • Uganda has navigated the post pandemic recovery well due to sound macroeconomic policies. The economic recovery is strengthening with low inflation, favorable agricultural production, and strong industrial and services activity.
    • Uganda should continue its efforts to create fiscal space through revenue mobilization and better expenditure discipline, vigilant monetary policy, and exchange rate flexibility, using future oil revenue to address growth impediments and improve social development while advancing governance reform and financial inclusion.

    Washington DC: On September 6, the Executive Board of the International Monetary Fund (IMF) concluded the 2024 Article IV Consultation[1] with Uganda.

    Uganda has navigated the post-pandemic recovery well due to sound macroeconomic policies. The economic recovery is strengthening with low inflation, favorable agricultural production, and strong industrial and services activity. Growth is estimated at 6 percent in FY23/24, up from 5.3 percent in FY22/23. Headline inflation has increased to 3.9 percent by June 2024, driven by rising energy prices and core inflation, though the latter remains below the Bank of Uganda’s (BoU) target of 5 percent.

    Elevated current account deficit and limited capital inflows have weighed on Uganda’s international reserves. Despite strong coffee and gold exports, the current deficit remains high due to rising oil project-related imports. Tight global financial conditions and reduced external project and budget support have driven down gross international reserves, covering only 2.9 months of imports at the end of 2024 (excluding oil-project related imports).

    The overall fiscal deficit continued to decline in FY23/24 but was less than planned due to revenue underperformance and higher current spending, while development spending fell short of expectations, worsening expenditure composition.

    Looking ahead, growth is expected to strengthen, boosted by the start of oil production, which will make lasting improvement in the fiscal and current account balances. Inflation is expected to rise near the BoU’s target of 5 percent in FY24/25. Risks are mostly on the downside, including continued fallout from the Anti-Homosexuality Act, which complicates the already tight external financing conditions, potential delays in oil production, and climate-related shocks. Upside risks to inflation come from commodity price volatility, weather conditions, and exchange rate depreciation pressures stemming from limited capital inflows.

    The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Uganda:

    “Executive Directors agreed with the thrust of the staff appraisal. They welcomed Uganda’s robust post‑pandemic recovery underpinned by sound macroeconomic policies and the favorable medium‑term outlook due to the anticipated start of oil production. At the same time, they noted pressures on international reserves amid tight global financial conditions, as well as the elevated debt servicing costs accompanied by a shortfall in the country’s development spending. Directors also highlighted the significant downside risks, including from the continued fallout from the “Anti‑Homosexuality Act”, which could exacerbate already tight external financing conditions, potential delays in oil production, sluggish reform implementation, and climate‑related shocks. Against this background, they encouraged continued reforms, including those envisaged under the expired ECF arrangement, to rebuild fiscal and external buffers and boost inclusive and sustainable growth, supported by technical assistance from the Fund and other partners as needed.

    “Directors encouraged strong efforts to create durable fiscal space, emphasizing the need to address significant spending demands in human capital, infrastructure, and climate resilience. They recommended continued revenue‑based fiscal consolidation, improved expenditure discipline, and a prudent fiscal management framework to ensure effective use of oil revenues once production begins.

    “Directors commended the Bank of Uganda’s commitment to price stability and agreed with its tight monetary policy stance to anchor inflation expectations. They advised keeping monetary policy data dependent and emphasized the importance of continued exchange rate flexibility to help build up buffers and improve competitiveness. Directors called for continued efforts to enhance monetary transmission and central bank independence, including through full implementation of the 2021 Safeguards Assessment recommendations.

    “While recognizing the resilience of Uganda’s financial system, Directors called for vigilant monitoring of the rapid increase in the sovereign‑bank nexus and significant cross‑border exposure of the nonfinancial corporate sector, alongside multifaceted efforts to enhance financial inclusion.

    “Directors stressed that accelerating structural reforms is crucial for achieving inclusive, sustainable, and private sector‑led growth. They supported further efforts to strengthen enforcement of the anti‑corruption framework, address remaining shortcomings in AML/CFT, enhance fiscal transparency, introduce regulatory reforms to support businesses, and implement an ambitious climate resilience agenda drawing on the recommendations of the C‑PIMA.

    The next Article IV consultation with Uganda will be held on the standard 12‑month cycle.”

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Tatiana Mossot

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/09/pr24322-Uganda-imf-exec-board-concludes-2024-aiv-consult

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Dominican Republic

    Source: IMF – News in Russian

    September 10, 2024

    Washington, DC: On September 10, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with the Dominican Republic and considered and endorsed the staff appraisal without a meeting.[2]

    A track record of sound policies and institutional policy frameworks has helped the Dominican Republic achieve robust and resilient economic growth and low inflation over the last two decades. Effective policies contributed to a growth moderation that appropriately supported inflation’s rapid and sustained return to its target last year and then aided the recovery, while close monitoring of the financial sector supported macro-financial stability. Planned enhancements to policy frameworks and deepening structural reforms—in particular, comprehensive fiscal and electricity reforms—have the potential to further support stability, competitiveness, and inclusive growth.

    Following a strong post-pandemic recovery, economic growth slowed to 2.4 percent in 2023 due to tighter global and domestic financial conditions, weak export demand, and transient domestic factors, largely climate related. The growth slowdown, alongside lower commodity prices, drove inflation’s faster-than-expected convergence to its target range (4±1 percent). In response, the Central Bank of The Dominican Republic (BCRD) cautiously and appropriately reduced its key policy rate, allowing for greater exchange rate flexibility while increasing foreign exchange interventions to smooth daily exchange volatility. Fiscal policy was also prudently adjusted to support the economy. The current account deficit in 2023 narrowed markedly to 3.6 percent of GDP and was fully financed by foreign direct investment (FDI) flows. The financial sector weathered the period of tight monetary policy and slower growth and is adequately capitalized and profitable.

    Supported by sound policies and macroeconomic fundamentals, the outlook is favorable despite elevated, mostly global, uncertainty. For 2024 and over the medium term, real GDP growth is projected around its long-term trend of 5 percent, with inflation around its 4 percent target. The current account deficit is projected to gradually narrow to less than 3 percent of GDP and continue being fully financed by FDI. Near-term risks to the outlook—including tighter global financial conditions, geopolitical tensions, and volatile commodity prices—have moderated since last year but remain elevated and tilted to the downside. Over the medium-term risks are more balanced and include upside risks if key domestic reforms are implemented successfully.

    Executive Board Assessment

    In concluding the 2024 Article IV Consultation with the Dominican Republic, Executive Directors endorsed staff’s appraisal, as follows:

    A track record of sound policies and institutional policy frameworks has helped the Dominican Republic achieve robust and resilient economic growth and low inflation over the last two decades. Effective policies contributed to a growth moderation that appropriately supported inflation’s rapid and sustained return to its target in 2023. The authorities provided timely policy support to aid the recovery while monitoring closely the financial sector. The external position improved significantly in 2023 and was broadly in line with fundamentals and desirable policies.

    The outlook is favorable despite elevated—mostly global—uncertainty. Real GDP growth is projected around its long-term trend of 5 percent in 2024 and thereafter, with inflation around its (4±1 percent) target. The current account deficit, expected to be fully financed by FDI, is projected to gradually narrow over the medium term. Downside risks dominate in the near‑term term—including tighter for longer monetary policy in the U.S., intensification of regional conflicts, or extreme local weather events—but are broadly balanced over the medium term, including upside risks if reforms are successfully implemented. Existing buffers, further contingency planning, and agile sound policy making can help face adverse shocks.

    In the near term, policy priorities should remain focused on maintaining macroeconomic and financial stability, including further flexibility of the exchange rate. Monetary policy normalization can continue, given remaining economic slack and that inflation is firmly within the target range. Efforts to expedite the recapitalization of the central bank to reinforce its autonomy should remain a priority. Endeavors should continue to deepen the FX market, expand the use of hedging mechanisms and limit FXIs to large shocks that lead to destabilizing changes in hedging and financing premia to support further exchange rate flexibility, and therefore further enhance the effectiveness of the inflation targeting framework. While international reserves are broadly adequate based on traditional metrics, further reserve accumulation is necessary to increase buffers to deal with future shocks.

    Fiscal policy should remain focused on rebuilding buffers and critical spending needs. The fiscal responsibility law and its planned implementation are welcomed and are important steps to better anchor medium-term policies and further secure debt sustainability. The authorities’ planned gradual fiscal consolidation, consistent with this law, is appropriate to place debt on a firmly downward path and build fiscal buffers. An integral fiscal reform that durably raises revenues—through elimination of tax exemptions and expansion of the tax base—and improves spending efficiency—especially by reducing electricity sector subsidies and untargeted transfers—is imperative. This can provide space for needed development spending (including disaster-resilient infrastructure) to promote inclusive growth.

    The financial sector remains resilient and well capitalized, and efforts to bring the regulatory framework up to the latest international standards should continue. The sector weathered well the period of high interest rates and slower growth in 2023. Stress tests show that the banking sector can absorb a range of shocks. Continued close monitoring to contain any build‑up of vulnerabilities remains warranted amid higher for longer interest rates and past increases to credit growth. The modernization of the financial and prudential regulatory framework, alongside the expansion of the macroprudential toolkit, and closing regulatory/supervisory gaps (including for savings and loans cooperatives) will further increase financial sector resilience.

    Ongoing efforts to improve public institutions and the business climate are essential to maintaining the strong investment and growth trajectory. The fiscal policy framework, and spending and revenue efficiency can be further enhanced by continued improvements to public financial management and further strengthening of revenue administration. Reforms to education and the labor market, alongside further improvements to social outcomes and implementation of climate adaptation and mitigation policies will be critical to support inclusive and resilient growth and continue to reduce vulnerabilities. The authorities should continue in their efforts to fully implement the Electricity Pact.

    Dominican Republic: Selected Economic Indicators

    Population (millions, 2023)                                                     10.7

    GDP per capita (2023, U.S. dollars)                         11,372

    Quota                                     477.4 million SDRs / 0.10% of total

    Poverty (2021, share of population)                            23.9

    Main exports                                             tourism, gold, tobacco

    Unemployment rate (2023, percent)                             5.3

    Key export markets                                          U.S., Canada, Haiti

    Adult literacy rate (percent, 2022)                               95.5

    Projection

    2019

    2020

    2021

    2022

    2023

    2024

    2025

    Output

    (Annual percentage change, unless otherwise stated) 

    Real GDP

    5.1

    -6.7

    12.3

    4.9

    2.4

    5.1

    5.0

    Nominal GDP (RD$ billion)

    4,562

    4,457

    5,393

    6,261

    6,820

    7,453

    8,149

    Nominal GDP (US$ billion)

    89.0

    78.9

    94.5

    113.9

    121.8

    …

    …

    Output gap (in percent of potential output)

    -0.5

    -6.3

    -1.9

    -0.8

    -1.7

    -0.8

    -0.5

    Prices

     

     

     

     

     

     

     

    Consumer price inflation (end of period)

    3.7

    5.6

    8.5

    7.8

    3.6

    3.7

    4.0

    Exchange Rate

    Exchange rate (RD$/US$ – period average) 1/

    51.2

    56.5

    57.1

    55.0

    56.0

    …

    …

    Exchange rate (RD$/US$ – eop) 1/

    52.9

    58.2

    57.3

    56.2

    58.0

    …

    …

    Real effective exchange rate (eop, – depreciation) 1/

    -3.2

    -8.1

    6.5

    6.3

    -1.9

    -2.9

    0.0

    Government Finances

    (In percent of GDP) 

    Consolidated public sector debt 2/

    53.3

    71.1

    62.2

    58.8

    59.3

    58.4

    57.4

    Consolidated public sector overall balance 2/

    -3.3

    -9.0

    -3.7

    -3.6

    -4.0

    -4.0

    -3.8

    Consolidated public sector primary balance

    0.5

    -4.2

    0.7

    0.0

    0.4

    0.7

    0.7

    NFPS balance

    -2.3

    -7.6

    -2.5

    -2.7

    -3.1

    -3.1

    -3.1

     Central government balance

    -3.5

    -7.9

    -2.9

    -3.2

    -3.3

    -3.1

    -3.1

    Revenues and grants

    14.4

    14.2

    15.6

    15.3

    15.7

    16.3

    15.2

    Primary spending

    15.1

    18.9

    15.4

    15.7

    15.8

    15.9

    14.8

    Interest expenditure

    2.7

    3.2

    3.1

    2.8

    3.1

    3.4

    3.5

    Rest of NFPS

    1.1

    0.3

    0.4

    0.6

    0.2

    0.0

    0.0

    Financial Sector

    (Annual percentage change; unless otherwise stated) 

    Broad money (M3)

    11.7

    21.2

    13.4

    6.3

    14.3

    11.5

    10.7

    Credit to the private sector

    11.8

    5.3

    11.6

    16.6

    19.6

    15.8

    11.5

    Net domestic assets of the banking system

    8.6

    2.5

    11.5

    9.7

    13.1

    13.5

    10.1

    Policy interest rate (in percent) 1/

    4.5

    3.0

    3.5

    8.5

    7.0

    …

    …

        Average bank deposit rate (1-year; in percent) 1/

    6.7

    3.1

    2.3

    9.9

    8.6

    …

    …

        Average bank lending rate (1-year; in percent) 1/

    12.4

    9.9

    9.2

    13.5

    13.6

    …

    …

    Balance of Payments

    (In percent of GDP) 

    Current account

    -1.3

    -1.7

    -2.8

    -5.8

    -3.6

    -3.4

    -3.4

    Goods, net

    -10.2

    -8.6

    -12.5

    -15.1

    -13.0

    -12.9

    -12.7

    Services, net

    5.7

    1.8

    3.9

    4.8

    6.0

    6.6

    6.5

    Income, net

    3.2

    5.2

    5.7

    4.5

    3.5

    2.9

    2.7

    Capital account

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Financial account 3/

    3.6

    5.3

    5.7

    6.7

    5.1

    3.5

    4.3

    Foreign direct investment, net

    3.4

    3.2

    3.4

    3.6

    3.6

    3.5

    3.5

    Portfolio investment, net

    2.4

    7.1

    2.2

    2.9

    2.0

    1.5

    1.3

    Financial derivatives, net

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Other investment, net

    -2.3

    -5.1

    0.1

    0.2

    -0.5

    -1.5

    -0.5

    Change in reserves (-increase)

    -1.3

    -2.5

    -2.4

    -1.3

    -0.9

    -0.2

    -0.9

    GIR (in millions of US dollars)

    8,782

    10,752

    12,943

    14,441

    15,464

    15,660

    16,883

    Total external debt (in percent of GDP)

    41.9

    56.3

    48.6

    40.5

    43.3

    43.5

    42.5

     of which: Consolidated public sector

    27.3

    40.3

    35.6

    33.2

    33.9

    32.9

    32.2

     

    Sources: National authorities; World Bank; and IMF staff calculations.

    1/ Latest available.

    2/ The consolidated public sector includes the budgetary central government (CG); the rest of the Non-Financial Public Sector, i.e., extra-budgetary central government institutions (decentralized and autonomous institutions), social security funds, local governments and non-financial public companies; and the quasi-fiscal central bank debt. With the dissolution of the state electricity holding company (CDEEE) in 2022, the deficit of CDEEE from 2019 was transferred to the CG.

    3/ Excluding reserves. 

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Meera Louis

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/10/pr24323-dominican-republic-imf-exec-board-concludes-2024-aiv-consult

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Botswana

    Source: IMF – News in Russian

    September 10, 2024

    • Botswana’s economic growth is expected to slow to 1 percent in 2024 primarily because of a diamond market contraction, before picking up next year. Inflation has declined sharply since the peak of mid-2022 and returned to the central bank’s medium-term objective range of 3–6 percent, where it is expected to remain in the medium term.
    • The government plans a fiscal expansion in FY2024 followed by two years of substantial fiscal adjustment. Public debt is low (20 percent of GDP), but government deposits at the central bank have significantly reduced over the past decade.
    • The financial sector is sound, stable, and resilient.

    Washington, DC: On August 28, 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Botswana and endorsed the staff appraisal without a meeting on a lapse-of-time basis.[2]

    Botswana’s economic growth decelerated from 5.5 percent in 2022 to 2.7 percent in 2023, below the long-run potential growth of 4 percent. A sharp decline in diamond trading and mining activities was the main contributor to the slowdown, as global demand for rough diamonds decreased. Inflation has remained below the ceiling of the central bank’s medium-term objective range since July 2023. Despite lower diamond exports, FX reserves increased in 2023 supported by higher customs union receipts. The financial sector is broadly sound, stable, and resilient.

    Botswana’s economy is expected to decelerate further this year, with growth projected at
    1 percent. The continued slowdown is mainly due to a fall in diamond production, partly offset by construction projects financed by the fiscal expansion. Growth is forecast to rebound – averaging 5 percent over the next two years – due to higher prices and quantities of diamonds produced. Inflation is projected to remain within the central bank’s objective range of
    3–6 percent.

    The fiscal deficit is projected to widen further to 6 percent of GDP in FY2024, reflecting a further decline in mineral revenues and higher capital expenditure. The government plans a substantial fiscal adjustment in the following two years to reach a fiscal surplus. The external position should soften over the medium term (with FX reserves decreasing to 5 months of imports) due to weak growth in customs revenues and higher government foreign debt repayments. Risks to the outlook remain elevated due to the emergence of cheaper lab-grown diamonds, and uncertainty over the recovery of major export markets.

    Executive Board Assessment

    In concluding the 2024 Article IV consultation with Botswana, Executive Directors endorsed staff’s appraisal, as follows:

    Botswana is facing a severe slowdown from a diamond market contraction in 2023 and 2024. Growth is expected to fall to 1.0 percent this year, from 2.7 percent in 2023 and 5.5 percent in 2022. This reflects weaker global demand for diamonds and a sharp increase in inventories.

    Real GDP growth should rebound next year, although risks to the outlook remain elevated. A strong recovery is projected in 2025, driven by the rebound in diamond production and trade. But the economic outlook is highly uncertain, with the emergence of cheaper lab-grown diamonds, and the announced sale of De Beers by its UK parent company.

    In the near term, the fall in diamond revenues could be accommodated by a mix of higher fiscal deficit and reprioritization of capital expenditure. Some fiscal relaxation is warranted in light of the widening of the output gap, but staff encourages the authorities to reprioritize capital projects to limit the increase in the deficit and ensure that they achieve the highest value for money.

    Over the medium term, the authorities’ planned fiscal consolidation is critical to put a stop to the depletion of government’s financial buffers, build resilience against shocks, and preserve fiscal sustainability. Staff assesses that targeting a 1 percent of GDP fiscal surplus would generate sufficient savings to protect the budget against major economic shocks. While the authorities’ adjustment plan focuses mostly on expenditure restraint, there is also scope to increase revenues. The medium-term adjustment should be supported by institutional reforms, including a fiscal rule, more credible medium-term budgeting, and possibly a well-designed SWF.

    The monetary policy stance is appropriate. Inflation has declined since August 2022 and is projected to remain within the central bank’s objective range in the medium term. Underlying pressures, as measured by core inflation indicators, seem contained, while inflation expectations are well anchored. The 2023 external position is assessed to be broadly in line with fundamentals and desirable policies.

    The authorities’ plans to strengthen financial sector oversight, deepening, and inclusion are welcomed. The financial sector is broadly sound and stable despite the economic slowdown. Faster implementation of the 2023 FSAP recommendations will further reduce financial risks. These include moving to implement Basel III liquidity standards, enhancing risk-based supervision of banks, reinforcing the crisis management framework (ELA, bank resolution), and deploying macroprudential tools to address household debt risk.

    Accelerating growth and job creation requires a fundamental shift towards greater private sector participation, a more diversified export base, and a more efficient public sector. The authorities should prioritize SOE modernization, improved infrastructure for doing business (internet, energy, logistics), trade facilitation measures, more efficient social protection, and financial inclusion reforms that support small entrepreneurs. These goals could be enshrined in the new NDP, supported by time-bound and well-prioritized action plans.

    Botswana: Selected Economic and Social Indicators, 2020-20291
     

    2020

    2021

    2022

    2023

    2024

    2025

    2026

    2027

    2028

    2029
     

    Projection

    (Annual percent change, unless otherwise indicated)

    National Income and Prices

    		                    

    Real GDP

    -8.7

    11.9

    5.5

    2.7

    1.0

    5.2

    4.8

    4.0

    4.0

    4.0

    Nonmineral

    -3.5

    7.9

    4.9

    2.6

    5.1

    4.1

    4.4

    4.4

    4.4

    4.5

    GDP per capita (US dollars)

    5,863

    7,244

    7,726

    7,250

    7,341

    8,003

    8,602

    9,146

    9,726

    10,437

    GNI per capita (US dollars)2

    5,872

    7,174

    7,220

    6,963

    7,150

    7,733

    8,290

    8,798

    9,344

    10,027

        Consumer prices (average)

    1.9

    6.7

    12.2

    5.1

    3.8

    4.5

    4.5

    4.5

    4.5

    4.5

    Diamond production (millions of carats)

    16.9

    22.7

    24.5

    25.1

    21.1

    23.3

    25.0

    25.5

    26.0

    26.4

    Money and Banking

    		                    

    Monetary Base

    -3.8

    -8.8

    -5.3

    33.1

    8.7

    9.7

    9.3

    9.2

    9.3

    9.3

    Broad money (M2)

    5.9

    5.0

    6.8

    9.3

    8.7

    9.7

    9.3

    9.2

    9.3

    9.3

    Credit to the private sector

    5.3

    5.4

    4.7

    5.6

    8.5

    11.0

    11.0

    11.0

    11.0

    11.0

    (Percent of GDP, unless otherwise indicated)

    Investment and Savings

    		                    

    Gross investment (including change in inventories)

    32.8

    27.4

    25.0

    30.3

    35.4

    34.1

    35.0

    35.5

    36.7

    37.5

    Public

    6.5

    5.5

    5.4

    7.1

    8.4

    7.0

    6.2

    6.0

    5.5

    5.2

    Private

    26.3

    21.9

    19.6

    23.2

    26.9

    27.1

    28.8

    29.5

    31.2

    32.3

    Gross savings

    26.6

    28.1

    24.9

    29.9

    33.4

    35.6

    36.2

    36.8

    37.3

    37.7

    Public

    -4.3

    0.7

    4.0

    3.0

    2.4

    4.2

    5.4

    6.1

    5.9

    5.5

    Private

    30.8

    27.5

    20.8

    26.9

    31.0

    31.4

    30.9

    30.7

    31.4

    32.2

    Central Government Finances3

    		                    

    Total revenue and grants

    25.6

    29.0

    29.1

    28.4

    28.2

    28.8

    28.6

    28.8

    27.6

    26.7

    SACU receipts

    9.1

    6.5

    5.5

    9.1

    9.6

    7.0

    6.4

    6.6

    6.3

    5.9

    Mineral revenue

    5.3

    10.6

    13.3

    7.4

    5.8

    9.5

    9.9

    9.8

    8.9

    8.4

    Total expenditure and net lending

    36.5

    31.4

    29.1

    33.1

    34.2

    30.6

    29.1

    28.3

    27.1

    26.2

    Overall balance (deficit –)

    -10.9

    -2.4

    0.0

    -4.7

    -6.0

    -1.7

    -0.5

    0.5

    0.5

    0.5

    Non-mineral non-SACU balance4

    -25.3

    -19.5

    -18.8

    -21.3

    -21.3

    -18.2

    -16.7

    -15.9

    -14.7

    -13.8

    Net Debt

    15.3

    12.8

    12.6

    16.9

    22.2

    21.6

    20.2

    18.2

    16.2

    14.6

    Total central government debt5

    18.7

    18.7

    18.1

    20.1

    22.6

    22.1

    20.7

    20.1

    20.0

    20.0

    Government deposits with the BoB6

    3.4

    5.9

    5.5

    3.3

    0.4

    0.4

    0.6

    1.9

    3.8

    5.5

    External Sector

    		                    

        Trade balance

    -13.2

    -3.5

    2.7

    -2.4

    -6.9

    -0.9

    0.2

    0.3

    0.0

    0.0

    Current account balance

    -10.3

    -1.7

    -1.2

    -0.6

    -2.0

    1.5

    1.2

    1.2

    0.6

    0.2

    Overall Balance

    -11.7

    -1.4

    1.8

    0.6

    -0.9

    1.3

    1.3

    1.5

    0.9

    0.5

    Nominal effective exchange rate (2018=100)7

    94.0

    94.1

    90.8

    86.4

    –

    –

    –

    –

    –

    –

    Real effective exchange rate (2018=100)7

    94.4

    97.7

    99.1

    94.7

    –

    –

    –

    –

    –

    –

    Terms of trade (2005=100)

    140.5

    178.9

    161.3

    152.7

    125.9

    162.2

    171.4

    176.6

    181.6

    186.6

    External central government debt5

    7.8

    8.4

    7.5

    8.9

    8.3

    6.7

    5.6

    4.8

    3.9

    3.5

    Gross official reserves (end of period, millions of USD)

    4,944

    4,806

    4,281

    4,757

    4,587

    4,879

    5,198

    5,600

    5,852

    6,014

    Months of imports of goods and services8

    6.4

    6.6

    7.1

    7.3

    6.3

    6.0

    5.8

    5.6

    5.4

    5.1

    Months of non-diamond imports8

    9.3

    8.7

    8.2

    8.8

    7.9

    7.8

    7.6

    7.5

    7.2

    7.1

    Percent of GDP

    31.2

    27.1

    21.8

    24.2

    23.3

    22.3

    21.5

    21.7

    20.8

    19.6

    Sources: Botswana authorities and IMF staff estimates and projections.

    1 This table is based on calendar years unless otherwise indicated.

    2 Based on Atlas method from the World Bank.

    3 Fiscal variables are based on fiscal years (starting on April 1).

    4 The non-mineral non-SACU balance is computed as the difference between non-mineral non-SACU revenue and total expenditure.

    5Excludes guarantees. Debt data measured at end of fiscal year.

    6Government deposits with the BoB include Government Investment Account as well as other accounts. Deposits data measured at end of fiscal year.

    7 For 2020-2023, both effective exchange rates are from IMF INS database.

    8 Based on imports of goods and services for the following year.

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Pavis Devahasadin

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/09/pr-24321-botswana-imf-executive-board-concludes-2024-article-iv-consultation

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI Russia: IMF and Ukrainian Authorities Reach Staff Level Agreement on the Fifth Review of the Extended Fund Facility (EFF) Arrangement– Ukraine

    Source: IMF – News in Russian

    September 10, 2024

    • International Monetary Fund (IMF) staff and the Ukrainian authorities have reached staff-level agreement (SLA) on the Fifth Review of the 4-year Extended Fund Facility (EFF) Arrangement. Subject to approval by the IMF Executive Board, Ukraine would have access to about US$ 1.1 billion (SDR 834.8 million).
    • Program performance remains strong. The authorities met all end-June quantitative performance criteria (QPCs) and the structural benchmark for the review. Understandings were also reached on policy settings and reforms to sustain macroeconomic stability as the war continues.
    • The economy remained resilient in the first half of 2024, but headwinds are intensifying and the outlook remains exceptionally uncertain. The continuing war will entail fresh financing needs, requiring determined policy efforts by the authorities and large-scale support from donors.

    Kyiv, Ukraine – September 10, 2024: An International Monetary Fund (IMF) team led by Mr. Gavin Gray held discussions in Kyiv with the Ukrainian authorities, during September 4-10, 2024, on the Fifth Review of the country’s 4-year EFF Arrangement. Upon the conclusion of the discussions, Mr. Gray issued the following statement:

    “IMF staff and the Ukrainian authorities have reached staff-level agreement on the Fifth Review of the EFF. The agreement is subject to approval by the IMF Executive Board, with Board consideration expected in the coming weeks.

    “Ukraine’s four-year EFF Arrangement with the IMF, continues to provide a strong anchor for the authorities’ economic program in times of exceptionally high uncertainty. Performance under the program has remained strong despite the war, with all quantitative performance criteria for end-June met, as well as the structural benchmark due for this review.

    “Russia’s war in Ukraine continues to have a devastating impact on the country and its people. Skillful policymaking, the adaptability of households and firms, and robust external financing has helped support macroeconomic and financial stability. Real GDP grew by 6.5 percent y/y in the first quarter of 2024, inflation has remained low at 5.4 percent y/y in July, and gross international reserves were adequate at US$42.3 billion as of September 1.

    “However, an economic slowdown is expected in 2024H2 due to repeated attacks on energy infrastructure and the impact of the war on labor markets and confidence; growth is expected at 3 percent for 2024. Addressing the energy deficit ahead of the winter is critical, requiring coordinated efforts, including with international partners. With the war is expected to continue through 2025, real GDP growth is projected to be between 2.5-3.5 percent. Inflation is expected to rise to around 9 percent by end-2024. Risks to the outlook remain exceptionally high.

    “The 2025 Budget needs to respect financing constraints and debt sustainability objectives, and determined domestic revenue mobilization efforts are critical. Timely and predictable external financial support, on terms consistent with debt sustainability, remains indispensable for maintaining economic stability.

    “Tax revenues need to increase in 2025 and beyond to create space for critical spending, to preserve essential buffers and restore fiscal sustainability. Achieving this will require the implementation of permanent tax policy measures and relentless efforts to close existing opportunities for tax evasion, improve compliance, and combat the shadow economy, in line with the National Revenue Strategy (NRS). Legislation to reform the Customs code should confirm the central role of the Finance Ministry in overseeing customs, while robust processes should be established for selecting a permanent head of customs as well as other key leadership roles.

    “The successful treatment of Ukraine’s Eurobonds will deliver substantial debt relief, freeing up resources for priority spending areas. Attention is now shifting to the remaining external commercial claims in the restructuring perimeter, including the GDP warrants, which should be treated in line with the program’s strategy to restore debt sustainability.

    “Upside risks to inflation have reduced the scope for further easing through the end of the year, and the monetary policy stance remains appropriate and consistent with achieving the inflation target over the medium term. The exchange rate should continue to act as a shock absorber and adjust to market fundamentals, thereby helping to safeguard external stability. Appropriate monetary policy combined with the framework of managed exchange rate flexibility should help prevent excessive exchange rate volatility and the de-anchoring of FX and inflation expectations. A judicious and staged approach to FX liberalization should continue in line with the National Bank of Ukraine’s (NBU) strategy, and consistent with the overall policy mix.

    “Effective governance frameworks are critical for durable growth, levelling the playing field, and pursuing the path to EU accession. In this regard, the independence, competence, and credibility of anti-corruption and judicial institutions should continue to be enhanced. In particular, strengthening the criminal procedural code, establishing a new high administrative court, and reforming the Accounting Chamber of Ukraine are key. The inaugural external audit of the National Anti-corruption Bureau is a short-term priority. The full supervisory board of Ukrenergo should be re-established by end-December.

    “The financial sector is stable and liquid, with reforms continuing apace despite challenges under Martial Law. To preserve financial stability and enhance preparedness for potential shocks, priorities include strengthening the bank rehabilitation framework, contingency planning, and bank governance.

    “The mission met with Finance Minister Marchenko, National Bank of Ukraine Governor Pyshnyy, other government ministers, public officials and civil society. The mission thanks them and their technical staff for their close collaboration and constructive discussions.”


    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Camila Perez

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/11/pr24326-IMF-and-Ukrainian-Authorities-Reach-Staff-Level-Agreement-Fifth-Review-EFF

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Kingdom of Lesotho

    Source: IMF – News in Russian

    September 11, 2024

    • Lesotho’s GDP growth has improved modestly, picking up to 2.2 percent in the fiscal year ending in March 2024. Inflation increased in the second half of 2023, peaking at 8.2 percent in January 2024. But upward pressures have eased, and inflation has since fallen to 6.5 percent in June.
    • The outlook for Lesotho’s fiscal and external balances has improved significantly owing to windfall transfers from the Southern African Customs Union (SACU) and renegotiated water royalties.
    • In this context, and amid Lesotho’s sizable development needs, a key challenge for the authorities will be to ensure that this revenue is saved wisely and spent strategically.

    Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with the Kingdom of Lesotho.

    GDP growth picked up modestly to 2.2 percent in 12-month period ending March 2024, compared with 1.6 percent a year earlier. This largely reflects accelerated construction from the Lesotho Highlands Water Project. Nonetheless, unemployment remains high, diamond and textile exports have been sluggish, and an exceptional dry season increased food-security concerns across the country.

    Headline inflation reached 6.5 percent in June, up from 4.5 percent in July 2023, though down from a peak of 8.2 percent in January 2024. The increase in inflation was largely due to exogenous factors that will most likely fade going forward.

    Lesotho registered a sizable fiscal surplus of 6.1 percent of GDP in during the fiscal year ending March 2024. In a change from past practice, transitory SACU transfers
    (10.4 percent of GDP higher than in FY22/23) were not accompanied by a parallel increase of the public wage bill. Instead, the authorities used the SACU proceeds to reduce arrears and rebuild deposits at the Central Bank.

    In support of the Loti’s peg to the Rand, the Central Bank of Lesotho has kept the policy rate steady at 7.75 percent since May 2023, in line with policy rates in South Africa.

    Financial conditions remain stable—private sector credit growth picked up to 12.5 percent in FY23/24, mainly due to construction, while the nonperforming loans have eased to
    3.8 percent of total loans as of 2023 Q4.

    Growth is projected to peak in the fiscal year ending in March 2025 (at 2.7 percent), while inflation is expected to ease slowly. Another year of windfall SACU transfers (6 percentage points of GDP above the 10-year average) will again bolster fiscal and external balances in FY24/25. These transfers are projected to fall sharply starting in FY25/26, though higher water royalties will help fill the gap. As a result, the fiscal balance is projected at a surplus of around 1 percent of GDP over the medium term, with the current account deficit at a modest
    2.6 percent.

    The authorities are encouraged to continue their prudent fiscal approach, ensuring that additional revenues are saved wisely and spent strategically, while also pushing ahead with reforms to support private sector-led growth.

    Executive Board Assessment[2]

    Directors agreed with the thrust of the staff appraisal. They welcomed the recent pickup in growth but concurred that Lesotho’s economy faces substantial challenges, including high unemployment, widespread poverty, and sluggish growth. They also noted the risks posed by global growth shocks, extreme weather events, uncertain transfers from the South African Customs Union (SACU), and commodity price volatility. Against this background, Directors welcomed the authorities’ commitment to strengthening policy frameworks, supported by Fund capacity development as needed.

    Directors emphasized the need for continued fiscal prudence to strengthen foreign exchange reserve coverage, safeguard the peg, and preserve medium-term debt sustainability. They agreed that containing the public wage bill, increasing spending efficiency, and prioritizing social spending on the most vulnerable remain critical. Given increased water royalties, Directors encouraged the authorities to establish a well-governed savings framework anchored by a credible fiscal rule to build buffers and support Lesotho’s long-term development objectives.

    Directors agreed that public financial management (PFM) should be strengthened. They encouraged passage of PFM-related legislation, and improved budget processes, strengthened internal controls, and enhanced financial reporting. Directors also underscored the importance of boosting public investment efficiency, through a prioritized capital project pipeline with enhanced project management capacity.

    Directors concurred that monetary policy should focus on price stability and safeguarding the exchange rate peg. They noted the slowdown in inflation, but urged the authorities to monitor price dynamics closely and stand ready to adjust monetary policy if inflationary pressures reemerge. Directors encouraged the authorities to improve central bank governance and coordinate closely across institutions on fiscal and monetary policies.

    Directors noted that the financial sector remains stable and encouraged continued monitoring of risks, including from the nonbank financial sector. They concurred that an updated national financial inclusion strategy would be key to improving financial intermediation and supporting private sector growth. They welcomed the progress made in strengthening legal and regulatory frameworks for financial stability and AML/CFT.

    Directors strongly encouraged the authorities to implement much-needed structural reforms to catalyze job-rich inclusive growth, including by improving the business environment, strengthening governance, and reducing corruption risks. They lauded the authorities’ commitment to improving data quality and timeliness to support policymaking.

    Lesotho: Selected Economic Indicators, 2020/21–2029/301
     

    2020/21

    2021/22

    2022/23

    2023/24

    2024/25

    2025/26

    2026/27

    2027/28

    2028/29

    2029/30

    Act.

    Act.

    Act.

    Est.

    Projections

    (12-month percent change, unless otherwise indicated)

    National Account and Prices

    		                    

    GDP at constant prices (including LHWP-II)

    -5.3

    1.7

    1.6

    2.2

    2.7

    2.4

    1.9

    2.1

    2.1

    2.1

    GDP at constant prices (excluding LHWP-II)

    -3.0

    4.4

    1.4

    1.5

    1.6

    1.7

    1.8

    1.9

    1.9

    2.0

    GDP at market prices (Maloti billions)

    34.2

    36.0

    38.5

    41.5

    45.2

    48.8

    52.4

    56.1

    60.0

    64.4

    GDP at market prices (US$ billions)

    2.1

    2.4

    2.3

    2.2

    2.3

    2.4

    2.5

    2.7

    2.8

    2.9

    Consumer prices (average)

    5.4

    6.5

    8.2

    6.5

    6.7

    5.8

    5.6

    5.3

    5.1

    5.1

    Consumer prices (eop)

    6.5

    7.2

    6.8

    7.4

    6.0

    5.5

    5.4

    5.3

    5.0

    5.0

    GDP deflator

    5.2

    3.5

    5.3

    5.4

    6.0

    5.4

    5.3

    4.9

    4.9

    5.1

    External Sector

    		                    

    Terms of trade (“–” = deterioration)

    3.5

    -1.6

    -3.2

    -5.9

    -2.7

    0.6

    0.1

    -0.6

    0.1

    0.1

    Average exchange rate

    		                    

    (Local currency per US$)

    16.4

    14.9

    17.0

    …

    …

    …

    …

    …

    …

    …

    Nominal effective exchange rate change (– depreciation)2

    -8.7

    6.3

    -3.0

    …

    …

    …

    …

    …

    …

    …

    Real effective exchange rate (– depreciation)2

    -6.0

    8.7

    -1.9

    …

    …

    …

    …

    …

    …

    …

    Current account balance (percent of GDP)

    -5.7

    -9.0

    -13.8

    -0.2

    -0.7

    -2.3

    -2.3

    -3.2

    -2.9

    -2.5

    (excluding LHWP-II imports, percent of GDP)

    -2.3

    -6.5

    -9.6

    6.4

    3.6

    1.7

    0.1

    -1.5

    -1.9

    -1.6

    Gross international reserves

    		                    

    (Months of imports)

    4.1

    4.3

    4.0

    4.3

    4.9

    5.7

    6.2

    6.3

    6.4

    6.5

    (excluding imports for LHWP-II, months of imports)

    4.2

    4.5

    4.3

    4.5

    5.0

    5.9

    6.3

    6.4

    6.4

    6.5

    Money and Credit

    		                    

    Net international reserves

    		                    

    (US$ millions)

    718

    846

    671

    755

    916

    1,121

    1,258

    1,343

    1,417

    1,513

    (Percent of M1 Plus)

    109

    127

    111

    114

    137

    163

    179

    185

    190

    197

    (US$ millions, CBL calculation)

    777

    843

    698

    755

    843

    …

    …

    …

    …

    …

    (Percent of M1 Plus, CBL calculation)

    118

    127

    116

    114

    126

    …

    …

    …

    …

    …

    Domestic credit to the private sector

    -3.0

    6.7

    8.7

    12.5

    9.0

    8.1

    8.0

    8.3

    7.4

    7.7

    Reserve money

    16.5

    1.0

    24.5

    24.0

    1.9

    1.2

    1.6

    1.6

    2.1

    2.3

    Broad money

    12.2

    0.0

    8.7

    15.2

    3.9

    5.0

    5.1

    5.4

    5.1

    5.4

    Interest rate (percent)3

    3.8

    3.5

    3.5

    4.7

    …

    …

    …

    …

    …

    …

    (Percent of GDP, unless otherwise indicated)

    Public Debt

    54.7

    58.4

    64.5

    61.5

    59.9

    59.7

    59.8

    59.8

    59.5

    59.5

    External public debt

    42.9

    42.3

    47.2

    47.8

    46.6

    46.4

    46.2

    46.2

    46.0

    46.0

    Domestic public debt

    11.7

    16.1

    17.3

    13.7

    13.3

    13.3

    13.5

    13.5

    13.5

    13.5

    Central Government Fiscal Operations

    		                    

    Revenue

    54.4

    48.8

    44.6

    56.5

    63.4

    61.1

    57.8

    55.6

    55.6

    54.8

    Domestic revenue (excluding SACU transfers and grants)

    25.1

    27.2

    27.6

    29.3

    31.0

    36.6

    34.9

    33.7

    33.7

    33.7

    SACU transfers

    26.2

    16.7

    14.0

    24.5

    25.6

    19.3

    18.5

    17.5

    17.5

    17.5

    Grants

    3.1

    4.9

    3.0

    2.8

    6.9

    5.2

    4.3

    4.3

    4.3

    3.6

    Recurrent expenditure

    43.0

    38.6

    40.5

    40.8

    42.0

    40.9

    40.9

    40.8

    40.8

    40.8

    Of which: wages, including social contributions

    17.6

    17.0

    18.0

    17.1

    16.8

    16.7

    16.6

    16.4

    16.4

    16.4

    Capital expenditure

    11.4

    15.5

    9.6

    9.6

    16.3

    14.3

    13.9

    14.0

    14.1

    13.5

    Additional fiscal measures

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Overall balance

    0.0

    -5.4

    -5.5

    6.1

    5.1

    5.8

    3.0

    0.8

    0.6

    0.5

    (excluding SACU transfers and grants)

    -29.3

    -27.0

    -22.5

    -21.1

    -27.3

    -18.6

    -19.8

    -21.1

    -21.3

    -20.6

       Operating balance

    0.0

    -5.4

    -5.5

    6.1

    5.1

    5.8

    3.0

    0.8

    0.6

    0.5

    Primary balance

    1.6

    -4.0

    -3.6

    8.1

    6.7

    7.5

    4.8

    2.7

    2.6

    2.6

    (excluding SACU transfers and grants)

    -27.7

    -25.6

    -20.6

    -19.2

    -25.7

    -17.0

    -18.0

    -19.2

    -19.3

    -18.6

    Statistical discrepancy

    -0.6

    0.6

    2.2

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    0.0

    Sources: Lesotho authorities, World Bank, and IMF staff calculations.

    1 The fiscal year runs from April 1 to March 31.

    		                    

    2 IMF Information Notice System trade-weighted; end of period.

    		                  

    3 12-month time deposits rate.

    		                    

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Julie Ziegler

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/10/pr-24324-lesotho-imf-executive-board-concludes-2024-article-iv-consultation

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation Discussions with the Kingdom of the Netherlands—Curaçao and Sint Maarten

    Source: IMF – News in Russian

    September 17, 2024

    Washington, DC: On September 10, 2024, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation discussions[1] with the Kingdom of the Netherlands—Curaçao and Sint Maarten and endorsed the staff appraisal without a meeting on a lapse-of-time basis[2]. These consultation discussions form part of the Article IV consultation with the Kingdom of the Netherlands.

    Context. Curaçao and Sint Maarten have continued to experience a vigorous post-pandemic recovery underpinned by strong stayover tourism, which is outperforming Caribbean peers. Headline inflation has declined rapidly led by international oil price developments, notwithstanding a recent uptick, while core inflation remains elevated. In both countries, current account deficits improved markedly from pandemic years but remain high. Fiscal positions remained strong and in compliance with the fiscal rule. The landspakket, the structural reform package agreed with the Netherlands in 2020, continues to guide both countries’ reform agenda.

    Curaçao outlook. Growth is expected to accelerate in 2024 before gradually converging to its potential over the medium term. Stayover tourism supported by fiscal expansion is projected to drive economic growth at a robust 4.5 percent in 2024 due to new airlifts and further expansion in hotel capacity. Growth is then expected to moderate to reach 1.5 percent over the medium term, given subpar investment and productivity growth coupled with sustained population decline and beginning saturation in tourism flows, assuming no further reforms and diversification. Headline inflation is projected to decline mildly to 3.2 percent in 2024 from 3.5 percent in 2023, but to continue falling towards its steady state of around 2 percent by 2027 reflecting international price developments. Fiscal balances would be guided by the fiscal rule and debt would continue to decline, while surpluses narrow as investments return and social spending pressures mount. The current account deficit is expected to improve in the medium term but would remain elevated.

    Sint Maarten outlook. Growth is expected to moderate in the medium term as tourism recovery and the reconstruction taper off. Growth is expected to be 2.7 percent in 2024 and 3 percent in 2025, supported by a delayed recovery in cruise passengers towards pre-pandemic levels. However, the near-term outlook is threatened by the electricity load shedding (since June) and political instability. From 2026 onwards, growth is expected to gradually converge towards 1.8 percent as the stimulus from the reconstruction peters out, and tourism growth becomes constrained by the island’s carrying capacity and ailing infrastructure. Inflation is expected to remain broadly contained while remaining vulnerable to international price developments. Over the medium term, the government will continue to comply with the golden fiscal rule and capacity constraints will continue to weigh on public investment.

    Monetary Union. Monetary policy is appropriately targeted towards maintaining the peg. Efforts to absorb excess liquidity should continue while closely monitoring developments in core inflation driven by tourism-related services. The financial sector is sound and risks to financial stability have substantially diminished as the CBCS advances its reform agenda. Banks are highly liquid and adequately capitalized and systemic risks are contained. Building on the CBCS’s strong progress in strengthening supervisory and regulatory capacity, and the recent resolution agreement for ENNIA, staff welcomes CBCS’s continued efforts in its reform agenda, including financial stability and crisis management.

    Executive Board Assessment[3]

    Curaçao

    Curaçao’s economy successfully embraced the pivot towards tourism-led growth, giving rise to a strong near-term outlook. After losing key traditional industries, Curaçao quickly and successfully leveraged its tourism potential to grow, attract new hotels, and create jobs. While this is serving the economy well in the near term – growth is projected to accelerate to 4½ in 2024 – structural shifts have started to emerge, including a low-skilled, informal recovery of the labor market amidst low investment in non-tourist sectors. Growth is expected to moderate over the medium term given saturation in tourism flows, sustained population decline, and subpar investment. Notwithstanding the economy’s recent overperformance, inflation declined significantly and only reversed some of its gains recently on the back of higher international oil prices and unfavorable base effects. Inflation is expected to gradually converge towards its steady state rate of around 2 percent. Fiscal policy remains guided by the fiscal rule, albeit past surpluses are expected to unwind, allowing for the reversal of pandemic wage cuts and a return of public investments. The current account markedly improved thanks to lower oil prices but the deficit remains elevated.

    Risks to the outlook are broadly balanced. Growth slowdown in major economies could negatively impact tourism receipts, while positive surprises could boost foreign demand. Domestically, a successful expansion of renewable energy and faster-than-expected development of hotel capacity and yachting marinas would boost growth, while delays in public investment and more persistent core inflation could dent tourist experience and competitiveness.

    Efforts to safeguard recently created fiscal space are welcome. Overall surpluses in 2022 and 2023 helped reduce debt and granted access to favorable financing terms from the Netherlands. Safeguarding this space and avoiding procyclical impetus is warranted, including through more gradual unwinding of pandemic wage cuts in 2024, prudent liquidity management to repay a bullet loan in 2025, and general efforts to strengthen tax administration, review procurement and domestic arrears management, and streamline transfers to public entities. Ensuing room for maneuver could be used for priority investments, including for climate adaptation, guided by a medium-term fiscal framework steering towards the island’s debt anchor.

    Healthcare and pension reforms are needed to lock in a sustainable expenditure path and mitigate medium-term fiscal risks. Growing health and old-age pension deficits, exacerbated by an aging population, pose risks to the sustainability of public finances. Recent initiatives to incentivize the use of generics and raise the pension age are commendable, and more needs to be done to put the system on a sustainable path. Staff sees a broad range of efficiency gains in health spending, including lowering pharmaceuticals and laboratory costs and enhancing primary care’s gatekeeping role. Reforms on the revenue side, including broadening the contributor base and increasing co-payments, are politically more difficult.

    Sustaining the positive growth momentum in the medium term requires investments in capital and labor and resolving existing growth bottlenecks. First, moving up the value chain with high-end resorts and complementary recreational activities would help sustain valuable income growth from tourism but requires scaling up investments in infrastructure and deregulating the transportation sector. Second, further investments in electricity grid and energy storage, as well as a revised pricing strategy, are needed to accompany the ongoing energy transition and reap its vast benefits, including lower fuel imports, emissions, and electricity prices. The envisaged floating offshore wind park for hydrogen production would be a game changer for the island. Boosting public investment to achieve these objectives, however, requires ramping up capacity in planning and execution. Third, to further stimulate growth and offset the sustained population decline, formal labor markets and skills would need to be strengthened. And fourth, continued improvements in the business climate in line with the landspakket’s economic reform pillar could help overcome decade-low productivity growth.

    Important strides in reducing ML/FT vulnerabilities are welcome and could be built upon. The draft online gaming law, implementation of risk-based supervision, and a new law to address EU grey listing and enable automatic information exchange represent important strides in enhancing Curaçao’s defenses against ML/FT and related reputational risks. Curaçao can further improve upon these important accomplishments, including by passing and implementing the aforementioned legislations in a timely manner and enhancing coordination and monitoring across relevant agencies.

    Sint Maarten

    Near-term growth is strongly anchored but preserving the positive momentum hinges on investments to revamp an ailing infrastructure and improve tourism’s value added. The economic recovery is well underway, underpinned by tourism recovery and the reconstruction. GDP is expected to surpass its pre-Irma level in 2025. However, without investments to upgrade an ailing infrastructure, growth will falter as the island approaches its maximum carrying capacity. Strategies should continue to focus on enhancing tourist’s experience, differentiating from other Caribbean destinations, and improving tourism’s value added.

    A comprehensive strategy is required to durably resolve the electricity crisis. Mobile electricity generators have been leased and efforts to replace old engines are underway. Once the immediate crisis is resolved, efforts should be devoted towards developing a detailed masterplan for the energy transition with targets, projects, costing, timeline, and a comprehensive assessment of ancillary investments. The Trust Fund could receive a new mandate, beyond 2028, to operate as a public investment agency in charge of planning, securing the financing, and implementing plans for the energy transition.

    Revenue mobilization efforts are essential to ensure fiscal sustainability. Plans to lower tax rates, to make the country more competitive with neighboring islands, should be avoided as this would reduce government’s revenues and endanger fiscal sustainability. Instead, additional revenues are required to satisfy the fiscal rule, service loans with the Netherlands, raise public wages to attract and retain talent, increase transfers to cover public health costs, and clear public arrears with the SZV. Envisaged reforms to enhance the tax administration and to digitize and interface government systems should be complemented with plans to i) tax casinos’ profits, turnover, and winnings; ii) enforce the lodging tax on short-term rentals, and income and profit tax on the proceeds from such rentals; iii) update the price of land leases; and iv) institute a tourist levy at the airport.

    Without reforms, the healthcare and pensions funds are unsustainable. Health premiums and government transfers are insufficient to cover health costs, which are being cross-financed with pension savings. With unchanged policies, given population aging and rising administrative costs, both health and pensions funds will run deficits by 2027, and the SZV would deplete its liquid assets by 2027. By 2030, the government would need to transfer about 4 percent of GDP per year to sustain the system. Reforms are urgently needed to contain health costs including: i) introducing the General Health Insurance, ii) rationalizing benefits, iii) extending the use of generics, iv) optimizing referrals, v) strengthening preventing care, and vi) adopting out-of-pocket payments. Given the rapid pace of population aging, additional measures such as increasing the contribution rates and linking the retirement age to life expectancy, should also be considered.

    Strengthening the implementation of AML/CFT measures is necessary to increase effectiveness of the AML/CFT regime. Laws for an effective AML/CFT framework were approved but their implementation is lagging. UBO registration is yet to begin, while the investigation and prosecution of suspicious activities is lacking. Granting the FIU full independence to investigate and prosecute cases, and increasing its budget for recruitment and operations could strengthen the AML/CFT framework.

     

    The Monetary Union of Curaçao and Sint Maarten

    The current account deficit is expected to improve in the medium term but would remain elevated, while international reserves are expected to remain broadly stable. Large CADs in both countries are expected to improve and remain well-financed, leading to a stable and broadly adequate level of international reserves over the medium term. Curaçao’s external position is assessed to be weaker than implied by fundamentals and desired policy settings due to an elevated CAD and sustained appreciation of the real effective exchange rate, while that of Sint Maarten is considered in line with fundamentals and desired policy settings.

    Monetary policy is appropriately targeted towards maintaining the peg. In line with global monetary policy tightening, the CBCS increased its benchmark rate during 2022-23 and has kept it unchanged since September 2023. Efforts to absorb excess liquidity should continue while closely monitoring developments in core inflation driven by tourism-related services. Even though credit growth declined further and reached negative territory in real terms amidst monetary tightening, the transmission mechanism of monetary policy remains weak. Structural factors include the absence of interbank and government securities markets. The continued increase in mortgages, the only credit component to display growth, was accompanied by a broadly stable loan-to-value ratio on aggregate, albeit more granular data is needed to monitor potential vulnerabilities. Further acceleration in mortgage credit could warrant introducing a macro prudential limit below the currently by banks self-imposed ratio.

    The financial sector is sound and risks to financial stability have substantially diminished as the CBCS advances its reform agenda. Banks are highly liquid and adequately capitalized and systemic risks are contained. Near-term risks to financial stability have substantially diminished with the agreement for a controlled wind-down of ENNIA and the start of the restructuring process, as well as the CBCS’s continued improvements in supervision, regulation, and governance. Staff welcomes CBCS’s initiatives to establish a financial stability committee, further refine stress-testing, and enhance crisis management capacities, including lender of last resort and a deposit insurance scheme.

    Table 1. Curaçao: Selected Economic and Financial Indicators, 2020–25

    (Percent of GDP unless otherwise indicated)

     

    2020

    2021

    2022

    2023

    2024

    2025

    Prel.

    Prel.

    Prel.

    Prel.

    Proj.

    Real Economy

    Real GDP (percent change)

    -18.0

    4.2

    7.9

    4.2

    4.5

    3.5

    CPI (12-month average, percent change)

    2.2

    3.8

    7.4

    3.5

    3.2

    2.4

    CPI (end of period, percent change)

    2.2

    4.8

    8.4

    3.1

    3.2

    2.4

    GDP deflator (percent change)

    2.2

    3.8

    4.0

    3.5

    3.2

    2.4

    Unemployment rate (percent) 1/

    13.1

    13.5

    7.2

    7.0

    6.9

    6.6

    Central Government Finances 2/

    Net operating (current) balance

    -15.0

    -10.6

    0.7

    0.6

    0.0

    0.5

    Primary balance

    -13.2

    -8.8

    2.0

    2.5

    2.0

    1.9

    Overall balance

    -14.5

    -10.0

    1.0

    1.3

    0.1

    0.5

    Central government debt 3/

    87.1

    90.3

    81.6

    70.8

    65.4

    61.1

    General Government Finances 2, 4/

    Overall balance

    -15.7

    -10.4

    0.3

    0.9

    -0.3

    -0.1

    Balance of Payments

    Current account

    -27.2

    -18.6

    -26.8

    -19.7

    -17.9

    -16.5

    Goods trade balance

    -37.0

    -41.6

    -47.9

    -38.3

    -40.4

    -39.9

       Exports of goods

    10.7

    12.5

    18.0

    16.9

    16.5

    16.2

       Imports of goods

    47.7

    54.1

    65.9

    55.2

    56.9

    56.1

    Service balance

    9.6

    21.7

    20.5

    18.4

    22.6

    23.7

       Exports of services

    29.3

    37.2

    48.6

    46.6

    50.3

    51.3

       Imports of services

    19.7

    15.6

    28.1

    28.2

    27.7

    27.6

    External debt

    197.3

    194.8

    180.9

    177.1

    169.1

    164.0

    Memorandum Items

    Nominal GDP (millions of U.S. dollars)

    2,534

    2,740

    3,075

    3,318

    3,578

    3,789

    Per capita GDP (U.S. dollars)

    16,492

    18,135

    20,648

    22,160

    23,775

    25,065

    Credit to non-government sectors (percent change)

    0.1

    -9.7

    3.2

    2.5

    …

    …

    Sources: The Curaçao authorities and IMF staff estimates and projections.

    1/ Staff understands that the unemployment rate of 7.0 percent published in the 2023 Census data is not comparable to the historically published unemployment rates from the labor force survey by the Curacao Bureau of Statistics. As such, staff estimated the unemployment rate and overall labor force for the period of 2012 to 2022. Staff understands that the Curacao Bureau of Statistics intends to revise the historical series in the near future.

    2/ Defined as balance sheet liabilities of the central government except equities. Includes central government liabilities to the social security funds.

    3/ Budgetary central government consolidated with the social security fund (SVB).

    4/ The latest available datapoint is as of 2018. Values for 2019-2023 are IMF staff estimates based on BOP flow data.

     

     

    Table 2. Sint Maarten: Selected Economic Indicators 2020–25

    (Percent of GDP unless otherwise indicated)

     

    2020

    2021

    2022

    2023

    2024

    2025

    Est.

    Est.

    Est.

    Est.

    Proj.

    Real Economy

     

    		    

    Real GDP (percent change) 1/

    -20.4

    7.1

    13.9

    3.5

    2.7

    3.0

    CPI (12-month average, percent change)

    0.7

    2.8

    3.6

    2.1

    2.5

    2.3

    Unemployment rate (percent) 2/

    16.9

    10.8

    9.9

    8.6

    8.5

    8.2
       

    Government Finances

     

    		    

    Primary balance excl. Trust Fund operations 3/

    -8.7

    -5.4

    -0.6

    1.5

    0.9

    0.9

    Current balance (Authorities’ definition) 4/

    -9.6

    -6.3

    -1.5

    0.5

    -0.1

    0.0

    Overall balance excl. TF operations

    -9.3

    -5.9

    -1.1

    1.0

    0.2

    0.2

    Central government debt 5/

    56.1

    55.3

    49.3

    49.0

    46.2

    44.1
       

    Balance of Payments

     

    		    

    Current account

    -25.5

    -24.6

    -3.9

    -7.5

    -7.8

    -3.0

    Goods trade balance

    -40.7

    -49.8

    -59.2

    -59.3

    -62.4

    -60.5

       Exports of goods

    11.8

    11.4

    14.1

    14.8

    13.1

    11.2

       Imports of goods

    52.4

    61.2

    73.2

    74.1

    75.5

    71.7

    Service balance

    20.2

    33.1

    62.8

    60.3

    62.6

    65.2

       Exports of services

    34.4

    51.0

    78.7

    81.4

    81.5

    83.9

       Imports of services

    14.3

    17.9

    15.9

    21.1

    18.9

    18.7

    External debt 6/

    274.3

    253.7

    213.6

    206.3

    200.8

    194.0
       

    Memorandum Items

    		    

    Nominal GDP (millions of U.S. dollars)

    1,141

    1,268

    1,479

    1,563

    1,645

    1,733

    Per capita GDP (U.S. dollars)

    26,796

    29,646

    34,437

    36,088

    37,570

    39,160

    Credit to non-gov. sectors (percent change)

    2.4

    1.3

    4.5

    1.0

    …

    …
               

       Sources:

    		            

       1/ Central Bank of Curacao and Sint Maarten and IMF staff estimates.

    		            

       2/ The size of the 2022 labor force reported by the 2023 Census was adjusted to ensure consistency with the reported total population.

       3/ Excludes Trust Fund (TF) grants and TF-financed special projects.

    		  

       4/ Revenue excl. grants minus interest income, current expenditure and depreciation of fixed assets.

    		  

       5/ The stock of debt in 2018 is based on financial statements. Values in subsequent years are staff’s estimates and are higher than the values under authorities’ definition in quarterly fiscal reports.

       6/ The latest available datapoint is as of 2018. Values for 2019-2022 are IMF staff estimates based on BOP flow data.

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] The Executive Board takes decisions under its lapse-of-time-procedure when the Board agrees that a proposal can be considered without convening formal discussions.

    [3] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Reah Sy

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/17/pr-24330-curacao-and-sint-maarten-imf-board-concludes-2024-article-iv-consultation-discussions

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI Russia: Paid Inactivity – PayPal Introduces Fees on Inactive Accounts of Russians

    MIL OSI Translation. Region: Russian Federation –

    Source: Mainfin Bank –

    When will PayPal charge users a fee?

    PayPal’s updated user agreement will go into effect on October 7th – the platform will charge fees to inactive accounts according to the following terms:

    there have been no withdrawal transactions on the wallet in the last year; the account balance is positive – the amount and currency do not matter; the commission will be 3.5 thousand rubles per year or the total balance, if the amount on the balance is less; the commission will be withheld for the extension of service; if the user does not agree with the updated terms, the wallet must be closed before October 7.

    Inactive clients of the platform, from whom a commission will be withheld, also include persons who have not entered their profile for a year – the new rules will affect not only Russians, but also users from other countries.

    Why did PayPal suspend work with Russian clients?

    PayPal’s departure from the Russian Federation became known in early March 2022 – then, against the backdrop of the beginning of the Cold War and the sanctions imposed by the United States, the company suspended operations in the country, promising users time to withdraw funds. Now, registration of new clients from Russia is unavailable on the platform, and services for receiving and sending payments are closed for compatriots.

    “The departure of PayPal from Russia was a blow to freelancers and small businesses working with foreign partners. Russians also lost the ability to pay for purchases in a number of foreign stores, such as Steam and PS Store,” the expert noted.

    Although PayPal promised Russians the ability to withdraw funds from wallets, access to the payment system’s website was closed immediately after the announcement of its withdrawal from the country – no instructions on how to withdraw money from the balance were provided either. The service continues to operate in more than 200 countries around the world, serving over 300 million active clients.

    12:00 09/24/2024

    Source:

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

    http://mainfin.ru/news/paid-inactivity-paypal-introduces-commissions-on-inactive-accounts-of-Russians

    EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

    MIL OSI Russia News –

  • MIL-OSI Russia: Navigating Through Financial Turbulences with Preparedness, Competence, and Confidence

    Source: IMF – News in Russian

    OeNB | SUERF | Joint Vienna Institute | Yale Program on Financial Stability Conference on Building Resilience and Managing Financial Crises
    Vienna, Austria
    Tobias Adrian, IMF Financial Counsellor and Director of the Monetary and Capital Markets Department

    September 18, 2024

    It is a great pleasure to speak to you today on a policy area at the forefront of our work at the IMF in helping our members prepare for, and deal with, financial instability. I will provide a snapshot of the progress that has been made and what remains to be done to deal effectively with bank runs and bank failures. I will also explain what we are doing at the IMF to help our membership make further progress in this critical area.

    The bank failures in 2023 in the US and Switzerland presented the most significant test since the global financial crisis of the reforms taken collectively to end “too-big-to-fail.” It’s not often that policymakers get to field test plans for dealing with failing systemic banks, let alone one for a global systemically important bank (G-SIB).

    In our view, the failures of Credit Suisse in Switzerland and SVB, Signature, and First Republic in the US, showed that while significant progress has been made, further progress is still required to deliver on the too-big-to-fail reform agenda and reduce the risk that taxpayers bail out shareholders and creditors when banks fail.

    On the one hand, the actions the authorities took last year successfully avoided deeper financial turmoil. In addition, unlike many of the failures during the global financial crisis, significant losses were shared with the shareholders and some creditors of the failed banks. However, taxpayers were once again on the hook as extensive public support was used to protect more than just the insured depositors of failed banks.

    In Switzerland, amid a massive creditor run, the Credit Suisse acquisition was backed by a government guarantee and liquidity facilities nearly equal to a quarter of Swiss economic output. While the public support was ultimately recovered, it entailed very significant contingent fiscal risk, and created a larger, more systemic bank. Indeed, UBS now has the largest ratio of assets to home country GDP of any individual G-SIB.

    The use of standing resolution powers to transfer ownership of Credit Suisse, after bailing in shareholders and creditors, rather than relying on emergency legislation to effect a merger, would have fully wiped out the equity of Credit Suisse shareholders and limited the need for public support.

    What lessons have we learnt?

    Domestic and international authorities have published extensively on the lessons learnt and we share many of the conclusions. The key points I would highlight include:

    The importance of intrusive supervision and early intervention. Credit Suisse depositors lost confidence after prolonged governance and risk management failures. The banks which failed in the US pursued risky business strategies and very rapid growth with inadequate risk management. Supervisors in both jurisdictions should have acted faster and been more assertive and conclusive. Policymakers need to empower supervisors with both the ability and the will to act.

    Even relatively small banks can prove systemic. A lesson from many past crises, including the US bank failures in 2023, is that you can’t always judge in advance which banking problems will become systemic. In many countries, including the US and Switzerland, we think authorities should do more to be ready for crises affecting their medium-sized banks. Banking supervisory and resolution authorities should ensure that sufficient recovery and resolution planning takes place across the banking sector as a whole. This should include, on a proportional basis, banks that may not be systemic in all circumstances, but that could certainly be systemic in some.

    Central banks should be prepared to provide extensive liquidity support during a crisis. Banks should be familiar with the central bank’s operations and facilities and be ready to use them at short notice. Who can access central bank lending is also an important question as liquidity risks have partially moved away from the usual central bank counterparties. While widening the counterparty list could help central banks intervene more broadly in a crisis, it runs the risk of rewarding regulatory arbitrage, giving raise to difficult trade-offs and requiring careful assessment. Central banks may well have to lend against illiquid collateral in a crisis. In that context, prepositioning would help to ensure operational preparedness especially to ascertain the legal claim on the collateral and to calibrate appropriate haircuts. An open question is whether the prepositioning should be voluntary or required, and how much counterparties should preposition if required. The benefits of enhanced lending “fire power” would have to be compared with the cost that prepositioning entails for the banks and the costs to the central bank, including risks to its balance sheet. If propositioning is directly linked with risk (e.g., a percentage of uninsured deposit), the impact on intermediation and the interaction with other prudential regulation would need to be carefully assessed.

    Resolution plans and regimes need sufficient flexibility. We very much support the conclusion of the Financial Stability Board’s lessons learned report that resolution authorities need to “better operationalize a range of resolution options for different circumstances.” Every bank failure presents different challenges and resolution authorities need to be flexible enough to deal with the actual crisis that presents itself, balancing risks to financial stability with those to taxpayers. Authorities should make sure that they carefully balance rules versus discretion and detailed planning versus optionality in designing their resolution regimes. The rapid sale of Credit Suisse should prompt us to think about what would be needed for the successful sale in resolution of even the largest banking groups, at least in some circumstances.

    Strikingly, every one of the cases I mentioned from Spring 2023, involved the transfer of the failing bank’s business lines to an acquiring bank, even where this had not been the focus of prior resolution planning. Two of the US cases also involved the intermediate step of transfer to bridge banks. So, we have timely and high-profile reminders that transfer powers should be a core part of the resolution toolkit and should be duly planned for and readily implementable, including at short notice.

    Cooperation and effective implementation of resolution powers across borders is imperative. One notable feature of last year’s bank failures was the degree of international cooperation between regulators and resolution authorities in their handling of these cases. The Swiss authorities worked intensively with international counterparts to prepare for a resolution of Credit Suisse, which would have needed supportive actions from the supervisors and resolution authorities responsible for Credit Suisse’s main foreign operations, including in the US, UK, and EU. SVB’s UK subsidiary was resolved by the Bank of England, ultimately being sold to HSBC, and the FSB report highlights that the UK relied on the deep relationships built over the years with their US counterparts to help implement this. This cooperation seems to have begun earlier and worked a lot better than in similar cases during the global financial crisis, such as the failure of Lehman Brothers.

    That experience highlights how global financial stability depends on authorities being able to work together across borders and to build in peacetime the routine contacts and good understanding ex ante of what each authority would be likely to do to make that possible. However, there was a wrinkle in this otherwise positive experience, as highlighted in the Financial Stability Board’s report on the bank failures, which relates to the importance of the US securities markets to most major foreign banks. Credit Suisse and most other major banks have debt securities issued in US dollars and/or under New York law, the holders of which may incur losses in a resolution. As a recent report of the Financial Stability Board highlighted, there remain significant open questions about how disclosure and other US securities legal requirements would be applied in the circumstances where securities issued in the US are envisaged to be converted in a short period, for example, over a resolution weekend. This is an important issue where further work is needed and this is being taken forward by the Financial Stability Board, the Securities and Exchange Commission, and others.

    Finally, effective deposit insurance regimes are crucial. Banks typically fail when creditors lose confidence, even before their balance sheet reflects potential losses. Authorities in many countries need to strengthen deposit insurance regimes. New technology like 24/7 payments, mobile banking, and social media have accelerated deposit runs. Last year’s failures followed rapid deposit withdrawals, and deposit insurers and other authorities should be ready and able to act more quickly than many currently can.

    IMF staff are working actively to support efforts in member countries to strengthen their supervision, resolution, liquidity assistance, and deposit insurance frameworks including through FSAPs and technical assistance. In the US, we have seen lessons learned reports and policy proposals from many of the US banking authorities, several of which pick up on issues and recommendations that were discussed in the IMF’s assessment of the US financial sector (“FSAP”) in 2020. Our next FSAPs for Switzerland and the Euro Area will be published next year, and as we start work on that we will be taking a close look at the authorities’ and the FSB’s findings and will likely reiterate many of our previous findings, including on strengthening deposit insurance regimes. We are also contributing to policy formulation at the international level, including a recently announced review of the international deposit insurance standard, and by earlier this year hosting with the Financial Stability Board a workshop for policymakers on the use of transfer powers in resolution.

    The bottom line is that progress has been made, but there is still further to go in putting an end to too-big-to-fail. Most of the areas where further progress is needed are already well known; last year’s bank failures should provide the impetus for policymakers to cover the remaining ground.

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER:

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    @IMFSpokesperson

    https://www.imf.org/en/News/Articles/2024/09/16/sp091824-navigating-through-financial-turbulences-with-preparedness-competence-and-confidence

    MIL OSI

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  • MIL-OSI Russia: Moscow Metro Embraces Innovation: QR Code Payment Now Available at Turnstiles

    Source: Moscow Metro

    Moscow’s transportation system is taking a leap forward with the launch of QR code payment via the Faster Payment’s System (FPS) at Metro and Moscow Central Circle (MCC) turnstiles. This innovative service, powered by the Bank of Russia, is also being implemented at 1,700 ticket vending machines across the city.

    Moscow Metro QR code-ready.

    The FPS is already integrated into all regular river transport turnstiles and ground transport validators. This is a convenient and modern service. Now, this innovative payment method is available at ticket booths and vending machines, – said Maksim Liksutov, Moscow’s Deputy Mayor for Transport and Industry.

    To utilize QR code payment, passengers need to generate a QR code in the Moscow Metro app and hold their smartphone screen up to the scanner at the turnstile. The phone should be held 20-25 cm away from the scanner, at a 45-degree angle, with the active QR code facing the scanner. A green signal will appear on the turnstile when the payment is successful.

    Additionally, passengers registered in the mobile app and loyalty program are eligible for a special promotion. They will receive cashback for each payment made through the FPS, credited to their account within one minute.

    This new payment option offers Moscow residents a convenient, modern, and secure way to pay for their transportation needs.

    The FPS was first launched in June 2023 in the ticket offices of all open stations of the Big Circle Line (BCL).

    The Moscow Transport news channel https://t.me/DTRoadEn            

    MIL OSI Russia News –

  • MIL-OSI: Danske Bank A/S, transactions by persons discharging managerial responsibilities

    Source: GlobeNewswire (MIL-OSI)

    24 September 2024

    Notification no. 94/2024

    Transactions made by persons obliged to report transactions to the Danish FSA and Nasdaq Copenhagen, cf. the EU Market Abuse Regulation.

    In connection with the share buy-back program in Danske Bank A/S, APMH Invest A/S continuously sells shares pro rata.

    For further details, please find the attached templates for notifications and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.

    Contact: Stefan Singh Kailay, Head of Media Relations, tel. +45 45 14 14 00

    Attachment

    The MIL Network –

  • MIL-OSI Economics: ESX Gruppe AG: BaFin warns consumers against offers on website esx-gruppe.com

    Source: Bundesanstalt für Finanzdienstleistungsaufsicht – In English

    The Federal Financial Supervisory Authority BaFin warns consumers against offers on website esx-gruppe.com. According to information available to BaFin, financial and investment services are being provided on this website without the required authorisation.

    Anyone conducting banking business or providing financial or investment services in Germany may do so only with authorisation from BaFin. However, some companies offer these services without the required authorisation. Information on whether companies have been authorised by BaFin can be found in BaFin’s database of companies.

    The information provided by BaFin is based on section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG).

    Please be aware:

    BaFin, the German Federal Criminal Police Office (Bundeskriminalamt – BKA) and the German state criminal police offices (Landeskriminalämter) recommend that consumers seeking to invest money online should exercise the utmost caution and do the necessary research beforehand in order to identify fraud attempts at an early stage.

    MIL OSI Economics –

  • MIL-OSI China: Chinese shares surge on stimulus package

    Source: China State Council Information Office

    A staff member walks past the Shenzhen Stock Exchange in Shenzhen, south China’s Guangdong province, Sept. 21, 2020. [Photo/Xinhua]

    Chinese stocks rallied on Tuesday, fueled by a package of stimulus measures announced on the same day.

    The benchmark Shanghai Composite Index was up 4.15% to 2,863.13 points, and the Shenzhen Component Index closed 4.36% higher at 8,435.7 points.

    China’s central bank, top securities regulator and financial regulator earlier in the day announced a raft of monetary stimulus, property market support and capital market strengthening measures to support the country’s high-quality economic development at a press conference.

    The country will cut the reserve requirement ratio, lower mortgage rates on existing home loans, and create new monetary policy tools to support the stock market, among others.

    These policies, which exceed market expectations, will boost market confidence, stimulate the vitality of market entities, stabilize credit levels, and enhance the sustainability of financial support for the real economy, said Wen Bin, chief economist at China Minsheng Bank.

    Gains are seen across the board on the two bourses, with shares related to steel and coal leading the surge.

    The combined turnover of stocks covered by the two indices stood at 974.8 billion yuan (about $138.25 billion), up from 551 billion yuan recorded on the previous trading day.

    The ChiNext Index, tracking China’s Nasdaq-style board of growth enterprises, surged 5.54% to close at 1,615.32 points Tuesday.

    MIL OSI China News –

  • MIL-OSI Germany: Executive Board agrees allocation of responsibilities

    Source: Deutsche Bundesbank in English

    With effect from Monday, 2 September 2024, Dr Sabine Mauderer was appointed Vice-President of the Deutsche Bundesbank. Furthermore, Lutz Lienenkämper and Michael Theurer joined the Bundesbank’s Executive Board. The responsibilities within the Executive Board have therefore been reallocated. The following reallocation of responsibilities comes into effect immediately.
    President Dr Joachim Nagel
    Economics
    Directorate for Board and International Affairs
    Communications
    Strategy and Innovation
    Legal Services
    Deputy President Dr Sabine Mauderer
    Markets
    Controlling, Accounting and Organisation
    Sustainability
    Burkhard Balz
    Cash management
    Digital Euro
    Payments and Settlement Systems
    Centre for International Central Bank Dialogue
    Lutz Lienenkämper
    Human Resources
    Internal audit
    Compliance
    Michael Theurer
    Banking and Financial Supervision
    Financial Stability
    N.N.
    Information Technology
    Data and Statistics
    Risk Control
    Research
    Responsibilities within the unallocated area have been temporarily assigned to Dr Joachim Nagel (Risk Control and Research Centre), Dr Sabine Mauderer (Data and Statistics) and Burkhard Balz (Information Technology).

    MIL OSI

    MIL OSI German News –