Britain's public finances worse than Gambia, Uganda and Kenya, because of privatisation, IMF finds

[TrueBlueTerrier]

https://www.independent.co.uk/news/busi ... 77671.html" onclick="window.open(this.href);return false;

Britain’s underlying public finances are among the worst in the world, behind the Gambia, Uganda and Kenya, a new study has concluded.

International Monetary Fund (IMF) economists found that £1 trillion had been wiped off UK public sector net wealth since the 2008 financial crisis, largely thanks to bank bailouts and increasing pension liabilities.

The IMF looked at the assets and liabilities of 31 countries and found the UK was in a worse position than every other country apart from Portugal.

This surprising conclusion came from using a different approach to the public finances to the one favoured by the government.

Rather than looking at each country’s debt and the deficit – a government’s income minus its expenditure – the IMF’s approach takes into account the benefit of assets such as publicly owned corporations and natural resources. These figures more closely resemble a company’s balance sheet.

The IMF said the cost of bailing out banks had been a significant factor dragging the UK down the rankings. The UK also has one of the largest pension liabilities of any nation in the study but is towards the bottom of the pile when it comes to public assets.

Using the public sector balance sheet method, countries such as Gambia, Uganda and Kenya rank above the UK because, while they have smaller assets and liabilities than Britain, they have a higher net wealth relative to GDP.

The IMF’s report takes particular aim at the privatisation of public assets, the benefits of which it says are often merely an “illusion”.

The UK has undergone one of the most drastic privatisations of any economy since the early 1980s.

Under the Conservative government since 2015, policy has gone a stage further, incentivising departments and local authorities to sell off assets to fund day-to-day spending under the premise that such an approach is necessary to cut the deficit.

But the IMF economists said the tendency of governments to focus on debt “misses large swaths of government activity and can fall victim to illusory fiscal practices”.

When public assets are taken into account, selling a public utility, for example, may do nothing to improve the public finances, the IMF said.

“For instance, privatisations increase revenue and lower deficits but also reduce the government’s asset holdings,” the report stated.

“Similarly, cutting back maintenance expenditure reduces the deficit and lowers debt, but also reduces the value of infrastructure assets, which could cost more in the long term.”

In this view, Labour’s proposal to renationalise railway franchises and water companies would not, as the Conservatives have claimed, cost hundreds of billions of pounds.

The government would merely create debt on the liability side of the balance sheet while gaining an asset of the corresponding value, resulting in a net cost of zero.

The asset in turn has the potential to generate future income. For example, privatised water companies paid £6.5bn in dividends and interest to shareholders over the last five years, according to data compiled by the GMB union.

The IMF also warned on Tuesday that Brexit is among the primary risks to global economic stability.

The Washington-based organisation urged financial institutions to “step up their preparations for a post-Brexit landscape”, including for a no-deal scenario.

It warned that concerns about a no-deal Brexit appear to have increased, driving volatility in the pound and suppressing company valuations.

The IMF pointed to “growing anxiety” that Brexit negotiations could break down, increasing uncertainty in the UK and beyond, potentially triggering a “sharp tightening of global financial conditions”.

[Danelectro]

And the IMF should know as that's their bag.Providing bailouts that can only be paid back by selling state assets.

30 years of that s**t takes it toll but for some the penny never drops.

[Woody Guthrie]

Selling the family silver and then pissing away the money makes you poorer.
Who'd a thunk it?

Next up bear sh***s in wood shocker.

[dancingqueen]

The IMF.

LOL

Biggest bunch of fraudsters going.

Their figures are never to be trusted.

Their economic forecasts are nearly always way out.

They forecast a UK recession in the UK in the first 12 months after we voted for Brexit. How wrong where they.

Their forecasts for the USA economy are always way off the mark.

Oh and the leader of the IMF namely Christine Lagarde is a convicted con woman.

[TrueBlueTerrier]

The IMF.

They forecast a UK recession in the UK in the first 12 months after we voted for Brexit. How wrong where they.

Oh and the leader of the IMF namely Christine Lagarde is a convicted con woman.

The only stuff I see is that IMF forecast a recession when Brexit happens, as do such pro-Brexit papers such as the Express and Telegraph, any chance of a link as Brexit interests me.

Also, she wasn't convicted for a Con, but for negligence

French judges found Ms Lagarde guilty of negligence for failing to challenge the state arbitration payout to the friend of former French President Nicolas Sarkozy.

I am only stating this so the site can't be held responsible if your accusation is incorrect. If its correct, then a link would also be of great benefit to the site/

[dancingqueen]

"The only stuff I see is that IMF forecast a recession when Brexit happens, as do such pro-Brexit papers such as the Express and Telegraph, any chance of a link as Brexit interests me."





https://www.theguardian.com/business/20 ... referendum" onclick="window.open(this.href);return false;


Article dated June 2106 where the useless IMF said "The IMF used its annual report on the British economy to say Brexit would plunge the UK into recession next year"


"Next year" being 2017 and guess what it never happened.

The IMF are a rancid organisation.

[dancingqueen]

Some more dreadful forecasting by the IMF:


"It was a similar story in the global crisis of a decade ago. In April 2008, eight months after the beginning of the credit crunch, the IMF was predicting that the UK economy would grow by 1.6 per cent in 2008 and another 1.6 per cent in 2009. In the event, the economy shrank by 0.5 per cent in 2008 and 4.2 per cent in 2009. Having failed to see the crash, the IMF then failed to see the recovery. In July 2009 it predicted growth of 0.2 per cent in 2010. Actually, the economy went on to grow by 1.7 per cent in that year."


https://blogs.spectator.co.uk/2018/09/w ... t-warning/" onclick="window.open(this.href);return false;

[dancingqueen]

"The evidence is pretty straightforward: the IMF has an appalling record at economic forecasting – as, indeed, does virtually every other organisation which tries its hand at it. So why do its forecasts still make the headlines? My tea leaves, by the way, predict growth of 1.9 per cent in 2019 and minus 0.6 per cent in 2020 as a shallowish global recession catches us all out. In fact, I don’t drink tea and therefore don’t even have any tea leaves to consult – I just plucked the figures from thin air."

[Spedley]

Thanks dancingqueen, I'll look to you for financial forecasts in the future. :(

[Woody Guthrie]

The IMF like any other organisation that makes financial forecasts can only guess using the data available at the time.

What they can't do is predict what individual governments will do to stop these predictions from happening. The reason we didn't slide straight into a deep recession after 2008 and after the Brexit vote is because the government pumped eye watering amounts of money into the economy in the form of Quantitative Easing. It's like a mechanic predicting that your engine will cease if you don't put oil in it. Just because you put oil in it and it doesn't cease doesn't mean his prediction was wrong.

[dancingqueen]

When the IMF made their predictions quantitative easing (pumping money in tot financial system) had already started. They knew this was happening when they made their predictions and were still wildly wrong.

[Tman]

This how effective the IMF is-

https://www.theguardian.com/business/20 ... he-problem" onclick="window.open(this.href);return false;

Even the Grauniad is less than complimentary.

[toomuchcoke]

https://www.theguardian.com/business/20 ... referendum
Article dated June 2106 where the useless IMF said "The IMF used its annual report on the British economy to say Brexit would plunge the UK into recession next year"

I think that could just be dreadful reporting by the Guardian? Since that very same article says that the IMF is saying that leaving the EU is what would cause a recession. Seems rather extreme to be claiming that deciding to leave would cause a recession and then actually leaving 2 years later would cause another one!

Since the Guardian doesn't give us a link to the actual IMF report it's hard to say for certain, however if it's this report https://www.imf.org/external/pubs/ft/sc ... r16169.pdf" onclick="window.open(this.href);return false; then what the IMF said was "an adverse scenario could push the economy into a recession in 2017" which was presumably based on their assumption that the then Prime Minister David Cameron would do as he'd said he'd do and initiate Article 50 the day after the result (if it the vote was for Leave). And to put that quote I gave into proper context the entire paragraph was :-

These processes and their eventual outcomes could well remain unresolved for years, weighing heavily on investment and economic sentiment during the interim and depressing output. In addition, volatility in key financial markets would likely rise as markets adjust to new circumstances. Estimates of the effects on output and incomes are naturally highly uncertain. Nonetheless, even a comparatively limited amount of uncertainty, associated with a relatively smooth transition to an EEA-type trading arrangement, could have a material impact on short-term growth, while an adverse scenario could push the economy into a recession in 2017.

... which to my mind is all seems pretty reasonable.

[Tman]

https://www.bbc.co.uk/news/business-45875599" onclick="window.open(this.href);return false;

Further proof that the same old harbingers of doom can't predict the future with any degree of accuracy.