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IMF Says Sudan Made Tangible Progress Toward Establishing Strong Reforms

The International Monetary Fund logo is seen during the IMF/World Bank spring meetings in Washington, US. (File photo: Reuters)
The International Monetary Fund logo is seen during the IMF/World Bank spring meetings in Washington, US. (File photo: Reuters)
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IMF Says Sudan Made Tangible Progress Toward Establishing Strong Reforms

The International Monetary Fund logo is seen during the IMF/World Bank spring meetings in Washington, US. (File photo: Reuters)
The International Monetary Fund logo is seen during the IMF/World Bank spring meetings in Washington, US. (File photo: Reuters)

The International Monetary Fund (IMF) managing director approved on Monday the first review of Sudan's Staff-Monitored Program (SMP) but called for reform of a customs exchange rate and more transparency over state-owned enterprises.

"The Sudanese authorities have made tangible progress toward establishing a strong track record of policy and reform implementation - a key requirement for eventual debt relief", an IMF statement said, citing a recent devaluation of the currency and removal of fuel subsidies.

The IMF warned that the economic situation remained "extremely fragile" in Sudan, where a deep economic crisis has seen inflation of up to 300% and shortages of basic goods, Reuters reported.

"Authorities should implement the reform of the customs exchange rate in a timely fashion to lift revenue and competitiveness and avoid a return to distortionary policy measures," the statement said.

"Enhanced transparency and management of State-Owned Enterprises operations is vital to mitigate fiscal risks and bring more revenue on-budget," it added.

The IMF also called for the timely adoption of a central bank act and the establishment of an independent anti-corruption commission.

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Fitch Revises Italy's Outlook to 'Positive' on Stronger Fiscal Performance

Porta Nuova's financial district is seen in downtown Milan, Italy, May 16, 2018. REUTERS/Stefano Rellandini/File Photo Purchase Licensing Rights
Porta Nuova's financial district is seen in downtown Milan, Italy, May 16, 2018. REUTERS/Stefano Rellandini/File Photo Purchase Licensing Rights
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Fitch Revises Italy's Outlook to 'Positive' on Stronger Fiscal Performance

Porta Nuova's financial district is seen in downtown Milan, Italy, May 16, 2018. REUTERS/Stefano Rellandini/File Photo Purchase Licensing Rights
Porta Nuova's financial district is seen in downtown Milan, Italy, May 16, 2018. REUTERS/Stefano Rellandini/File Photo Purchase Licensing Rights

Global credit ratings agency Fitch on Friday revised its outlook on Italy to 'positive' from 'stable', citing recent improvements in the fiscal performance of the euro zone's third largest economy and its commitment to EU budget regulations.
The upgrade to the outlook is a boost to Prime Minister Giorgia Meloni's government and comes shortly after Rome reached an agreement with the European Commission on a seven-year budget adjustment, said Reuters.
"Italy's fiscal credibility has increased, and the 2025 budget underscores the government's commitment to EU fiscal rules," Fitch said in a statement.
The agency confirmed Italy's rating at 'BBB'.
In June, the Commission placed Italy and six other countries under a disciplinary procedure due to high budget deficits. Italy's 2023 shortfall came in at 7.2% of gross domestic product, the highest in the 20-nation euro zone.
However, last month the Italian government revised down its targets for the deficit this year and next, to 3.8% and 3.3% of GDP respectively, and said the deficit would fall below the EU’s 3% limit in 2026.
"The judgments of the ratings agencies are the result of the responsible actions of this government and they underscore Italy's credibility," Economy Minister Giancarlo Giorgetti said in a statement after Fitch's announcement.
Earlier on Friday, S&P Global confirmed its rating on Italy at 'BBB' and left the outlook at 'stable'.
RISING DEBT
Despite the narrowing annual budget deficits, Italy's debt, proportionally the second highest in the euro zone, is forecast by the government to climb from 134.8% of gross domestic product last year to 137.8% in 2026, before gradually declining.
The Treasury says the projected increase is due to costly home renovation incentives adopted during the COVID-19 pandemic, known as the Superbonus scheme.
The premium investors pay to hold Italian government bonds over top-rated German ones narrowed on Friday to around 116 basis points, the lowest level since end-2021.
Analysts said earlier this week that positive news from any of the ratings agencies due to review Italy could trigger a further narrowing of the yield spread against Germany.
Fitch said its revision to Italy's outlook was also driven by "signs of stronger potential growth and a more stable political context."
The Italian economy expanded by 0.7% in 2023, and most analysts expect a similar modest growth rate this year, slightly below the government's official 1% target.
Meloni, who took office two years ago, retains high approval ratings and opinion polls show her right-wing Brothers of Italy party is comfortably the largest in Italy, with popular support of almost 30%, up from the 26% it won at the 2022 election.
Italy faces further credit rating reviews by Moody's, DBRS and Scope Ratings over the next few weeks up to No. 29.