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IMF Grants $174m Emergency Loan to South Sudan

IMF Grants $174m Emergency Loan to South Sudan
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IMF Grants $174m Emergency Loan to South Sudan

IMF Grants $174m Emergency Loan to South Sudan

The IMF has approved $174 million (148 million euros) in emergency assistance to South Sudan, the country's central bank governor said Thursday, as floods and depressed oil prices rattle its economy.

South Sudan ran out of foreign exchange reserves last year as oil prices fell sharply due to the coronavirus pandemic, depriving the fragile government in Juba of much-needed revenue and sending its currency into freefall.

Devastating flooding has deepened the economic pain and magnified a humanitarian crisis in the world's youngest country, which is enduring its worst levels of hunger since independence a decade ago.

Central Bank Governor Dier Tong Ngor said the loan would help correct "distortions" in exchange rates and pay overdue wages to public servants.

"We have agreed with the IMF that half the amount will be used for budget support to pay salary arrears, and the other half will remain with the central bank" to cover urgent balance of payment needs, he told reporters.

The money would be repaid without interest under the terms agreed with the IMF, he said.

South Sudan is emerging from five years of civil bloodshed that left 380,000 dead and shattered its economy, which is almost entirely dependent on oil.

When it split from Sudan to the north in 2011 following a decades-long war of secession, it took over three-quarters of the oil reserves.

But years of civil conflict after independence, including for control of key oil fields, deprived the country of vital income and the chance to diversify its economy.

The coronavirus pandemic drove oil prices sharply downward, gutting state coffers for a fragile new unity government that took office in February 2020 at the end of a tortured peace process.

In August, the government announced it was out of foreign reserves and unable to pay its civil servants.

The following month President Salva Kiir sacked the finance minister, the head of the tax authority and the director of the state-owned petrol company as inflation soared and the economy teetered.

Corruption and mismanagement are also often blamed for South Sudan's economic troubles.

There are few other sources of foreign currency to prop up the ailing pound, which has freefallen in value and is traded at two different rates.

Ngor says the bank was working "to unify the official exchange rate with the market rate".

South Sudan's economy is forecast to contract by 4.2 percent in the 2020/2021 fiscal year, the IMF said on Tuesday, predicting a modest recovery for the 2021/2022 fiscal year as oil prices climb.

It is the second loan extended by the Washington DC-based lender since South Sudan gained independence from Sudan.

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China’s Factory Activity Snaps Record Slump on Festive Stockpiling

People walk down steps near a residential building area with a view of China Zun, the tallest skyscraper in Beijing, Tuesday, Dec. 23, 2025. (AP)
People walk down steps near a residential building area with a view of China Zun, the tallest skyscraper in Beijing, Tuesday, Dec. 23, 2025. (AP)
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China’s Factory Activity Snaps Record Slump on Festive Stockpiling

People walk down steps near a residential building area with a view of China Zun, the tallest skyscraper in Beijing, Tuesday, Dec. 23, 2025. (AP)
People walk down steps near a residential building area with a view of China Zun, the tallest skyscraper in Beijing, Tuesday, Dec. 23, 2025. (AP)

China's factory activity unexpectedly grew in December, snapping a record eight straight months of decline, lifted by a rise in pre-holiday orders ​as officials seek to spur the $19 trillion economy's manufacturing sector without worsening deflation.

The official purchasing managers' index (PMI) rose to 50.1 in December from 49.2 in November, the National Bureau of Statistics' survey showed on Wednesday, topping the 50-point mark separating growth from contraction and beating a forecast of 49.2 in a Reuters poll.

"Assuming the improvement in the PMIs is borne out in the hard data, we think it will likely be a short-lived upturn in activity on the back of month-to-month swings in fiscal spending rather than the start of a more sustained pick-up," said Julian Evans-Pritchard, head of China economics at Capital Economics.

"The big picture is that the structural headwinds from the property ‌downturn and industrial ‌overcapacity are set to persist in 2026," he added.

Still, the data should ‌give ⁠policymakers ​cause for ‌optimism after choosing to see out 2025 without major additional stimulus to meet the full-year growth target of around 5%.

The production sub-index jumped to 51.7 from 50.0 in November, while new orders climbed to 50.8 from 49.2, marking their strongest performance since March. Supplier delivery times also improved, pushing the production and activity expectations component to 55.5, its highest reading since March 2024.

New export orders remained sluggish, however, edging up to 49.0 from November's 47.6, underscoring the need for officials to boost domestic demand and rely less on US demand, the world's top consumer market, in the face of President Donald Trump's ⁠tariffs.

Huo Lihui, an NBS statistician, said confidence appeared to be improving due to pre-holiday stockpiling, as the world's second-largest economy prepares to celebrate the Lunar ‌New Year in February, pointing to an uptick in the agricultural, food processing ‍and food and beverage sectors.

A separate private-sector PMI ‍published on Wednesday also showed marginal expansion in activity in December, driven by stronger production and domestic demand ‍in the absence of more foreign orders.

DEPRESSED DOMESTIC DEMAND

Ginning up domestic manufacturing without taking further steps to boost consumer demand risks worsening deflationary pressures, however.

In separate data released last week, Chinese industrial firms saw their profits fall 13.1% year-on-year in November, the steepest drop in over a year, suggesting households are not stepping in to pick up the shortfall as a slowing global economy weighs ​on exports.

At an agenda-setting gathering in early December, the ruling Communist Party leadership promised to boost income and stimulate consumption, although similar pledges in the past have struggled to deliver results.

Chinese consumers ⁠have so far been reluctant to spend, held back by an uncertain employment outlook and as a prolonged property crisis drains household wealth.

The official non-manufacturing PMI, which includes services and construction, was at 50.2, after shrinking in November for the first time in nearly three years.

Beijing's policymakers have come to recognize the need to rebalance the economy and transform its production-driven model as tensions with key export markets mount.

"The country's economic development still faces many old problems and new challenges; the impact of changes in the external environment is deepening, and the contradiction between strong supply and weak demand is prominent domestically," the readout of the Central Economic Work Conference said.

In an article published by the flagship party magazine Qiushi Journal in mid-December, President Xi Jinping said there was "overall capacity excess" and that "ultimately consumption is the sustainable driver of economic growth."

Beijing had previously rejected "overcapacity" as unfair criticism by Western governments towards China's industrial policies.

In a nod to those concerns, authorities ‌have this year vowed to crack down on price wars, prune production in some sectors and step up so-called "anti-involution" efforts.

The NBS composite PMI of manufacturing and non-manufacturing was 50.7 in December, compared with November's 49.7.

Business

China Will Push More Proactive Macro Policies in 2026, Xi Says

Pedestrians walk along a street in the Central Business District of Beijing, China, 31 December, 2025. (EPA)
Pedestrians walk along a street in the Central Business District of Beijing, China, 31 December, 2025. (EPA)
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China Will Push More Proactive Macro Policies in 2026, Xi Says

Pedestrians walk along a street in the Central Business District of Beijing, China, 31 December, 2025. (EPA)
Pedestrians walk along a street in the Central Business District of Beijing, China, 31 December, 2025. (EPA)

China will implement more proactive ​macroeconomic policies next year, President Xi Jinping said on Wednesday, according ‌to state ‌media.

The ‌Chinese ⁠economy ​is ‌expected to achieve about 5% growth for 2025, to about 140 ⁠trillion yuan ($20 trillion), ‌Xi said.

The ‍country ‍will promote ‍effective qualitative improvement and reasonable quantitative growth in ​the economy, Xi said at ⁠a New Year's tea party of top Chinese Communist Party officials.

Business

India Overtakes Japan as World's 4th Largest Economy

 A man walks at the seafront as scattered clouds are seen over Mumbai's skyline, India, June 10, 2015. (Reuters)
 A man walks at the seafront as scattered clouds are seen over Mumbai's skyline, India, June 10, 2015. (Reuters)
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India Overtakes Japan as World's 4th Largest Economy

 A man walks at the seafront as scattered clouds are seen over Mumbai's skyline, India, June 10, 2015. (Reuters)
 A man walks at the seafront as scattered clouds are seen over Mumbai's skyline, India, June 10, 2015. (Reuters)

India has overtaken Japan as the world’s fourth largest economy and officials hope to pass Germany within three years, the government’s end-of-year economic review revealed.

Official confirmation, however, depends on data due in 2026 when final annual gross domestic product figures are released, with the International Monetary Fund (IMF) suggesting India will cross over Japan next year, reported AFP.

“India is among the world’s fastest-growing major economies and is well-positioned to sustain this momentum,” read the government economic briefing note, which was released late on Monday.

“With GDP valued at $4.18 trillion, India has surpassed Japan to become the world’s fourth largest economy, and is poised to displace Germany from the third rank in the next two-and-a-half to three years, with projected GDP of $7.3 trillion by 2030.”

IMF projections for 2026 put India’s economy at $4.51 trillion, compared with Japan’s $4.46 trillion.

The upbeat assessment comes despite economic worries after Washington in August hit India with huge tariffs over its purchases of Russian oil.

New Delhi said continued growth reflects its “resilience amid persistent global trade uncertainties”. But other measurements offer a less rosy outlook.

In terms of population, India overtook neighboring China as the most populous nation in 2023.

India’s GDP per capita was $2,694 in 2024, according to the latest World Bank figures, 12 times smaller than Japan’s $32,487, and 20 times smaller than Germany’s $56,103.

Government figures show that more than a quarter of India's 1.4 billion people are aged between 10 and 26. Creating enough well-paid jobs for millions of young graduates is an upcoming hurdle, but the report offered a rosy outlook.

“As one of the world's youngest nations, India's growth story is being shaped by its ability to generate quality employment that productively absorbs its expanding workforce and delivers inclusive, sustainable growth,” a note in the review said.

India’s Prime Minister Narendra Modi this year unveiled sweeping consumption tax cuts and pushed through labor law reforms after growth slowed to a four-year low in the 12 months ending March 31.

Currency pressures have also mounted.

The rupee hit a record low against the dollar in early December, after falling about 5% in 2025.

That came amid concerns over the lack of a trade deal with Washington and the impact of higher levies on Indian goods.

India became the world's fifth largest economy in 2022, when its GDP overtook that of former colonial ruler Britain, according to IMF figures.