labels: Economy - general
IMF projects $242 million shortfall in fiscal 2009 news
04 July 2008

Mumbai: The International Monetary Fund (IMF) has projected an income shortfall of $242 million in fiscal year 2009, which does not include plans to expand the IMF's investments and sell a portion of its gold reserves.

The IMF approved plans in April to sell 403.3 tonnes of its 3,217 tonnes of gold stocks and broadening its investments to set its finances on a sound footing. These, however, require the approval of legislators in some member countries, including the United States.

The IMF is heavily dependent on America and had relied much in the 1990s lending to bail out countries in Asia and Latin s. But with fewer financial crises, the IMF has lost income and faced a growing income deficit.

Still, the IMF said net income for the 2008 financial year, ended 30 April, stood at $3 million compared to a previously expected income shortfall of $234 million. This has mainly been due to expenditure cuts and a one-time income gain from the clearance of debt arrears by the West African country of Liberia.

The fiscal year, however, ended with a lower deficit of $89 million.

"This improvement stemmed primarily from the strong performance of the Fund's investment portfolio comprising primarily fixed-income securities, the one-time income effects associated with the settlement of overdue charges following Liberia's arrears clearance, and lower expenditures," the IMF said in a statement.

The IMF has eliminated 591 jobs in a voluntary separation programme and is also in the process of taking other measures, including the sale of a portion of its gold reserves.

But the latest budget projections do not include any income from gold sales.

The IMF, the lender of last resort to countries in financial crisis, has seen its own finances strained as more nations emerge from turmoil.

The decision by countries such as Argentina, Brazil, Indonesia and the Philippines and other big borrowers to repay their IMF loans and decline the conditions set by the organization has also led to a shortfall in its income.

The Washington-based IMF still has some $9 billion in reserves of gold and cash to keep it operating.


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IMF projects $242 million shortfall in fiscal 2009