Business

Saturday 2 August 2014

This week we'll see if the IMF is as good as its word

Published 19/11/2012|05:00

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Attention will focus this week on Europe as finance ministers get together to decide how Greece will plug a funding gap that will arise from allowing the country more time to get its financial house in order. But already the EU and IMF are on divergent paths, with the IMF having railed against the decision to give Greece an extension. That raised questions about whether the IMF would even keep funding going for the country. But IMF boss Christine Largarde has said the group will "never leave the table" as discussions continue. This week will tell if that is indeed true.

There will also be more key US economic data out this week as President Barack Obama tours Asia and he attempts to solve the so-called 'fiscal cliff'. Economists will be hoping for good news in Thanksgiving week, as figures come out that include the number of housing starts and jobless claims. The lowest mortgage rates on record in the US have probably helped to keep sales of second-hand homes near a two-year high and underpinned construction of new residences. Housing starts are anticipated to show that the figure eased to 840,000 in October from a four-year high that was released in September.

This week will also see Ryanair boss Michael O'Leary attend a UK parliament transport select committee as politicians seek views about aviation strategy. Mr O'Leary is unlikely to hold back on his views. The hearing will also be attended by executives from airlines including EasyJet, Virgin Atlantic and American Airlines.

At home, shareholders in food company Glanbia will vote at an EGM to see if they approve a move that will split the group's milk processing and nutritions business. It's likely to be approved, with thousands of farmer co-op members of Glanbia having last week given the green light to a new joint venture.

And last week as Bank of Ireland said it raised €1bn on the bond market (it was offered much more), and AIB might also venture back into the market. But despite the fact that ratings agencies sounded a more positive note on Ireland's economic future last week, some data showed just how challenging things remain.

The seasonally adjusted external trade balance fell to €2.9bn in September from €4.88bn in August, and the Construction Purchasing Managers' Index remained heavily subdued despite a slight increase in the index. The Department of Finance also downgraded its economic forecasts for the next three years.

Irish Independent

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