The country defaulted on a debt of $95bn in January
2002 after a crippling four-year recession.
In January, the IMF gave Argentina about $6.78bn in
credit and loan repayment extensions, helping the country avoid default
on earlier loans from the IMF.
"The arrangement is designed to cover all
payment obligations to the IMF through August 2003," the IMF said
"It is expected that Argentina will use these
resources to repay obligations falling due to the IMF."
The latest IMF approval was widely expected after the
lender said in early March that Argentina's economic programme was on
Meanwhile, the Argentine government said its economy
shrank by 10.9% in 2002, in what it said was the worst performance in a
A record debt default and steep devaluation flattened
consumer spending and sent investors fleeing.
Gross domestic product sank last year to levels on a
par with the United States during the Great Depression of the 1930s.
The government is forecasting 4.2% growth this year
as the economy bottoms out.
And some analysts expect to see growth of as much as
10 % this year.
CHINA'S LEADERS STRESS REFORM
Chinese President Hu Jintao and Prime Minister Wen
Jiabao have pledged to forge ahead with economic reforms, in their first
public comments since being appointed.
Mr Wen, 60, whose main task is to oversee China's
economy, told a news conference that rural living standards had to be
raised and that unemployment was a continuing concern.
The new premier, who referred to his reputation for
having a brain like a "computer", reeled out a string of
numbers which illustrated his daunting task — a 740-million-strong
labour force increasing by 10 million a year, 14 million laid-off state
workers and 30 million people living below the poverty line.
Mr Hu stressed that "only socialism can save
China", but that continuing reforms would be an important job.
Mr Wen also called for an early resumption of the
stalled dialogue with Taiwan — which Beijing considers a renegade
province and would like to see reunited with the mainland.
Both men pledged to continue with the work of their
predecessors — Jiang Zemin and Zhu Rongji.
Mr Wen highlighted the problems of a growing wealth
gap between rich and poor, as well as unemployment, which has risen as
state firms laid off millions of workers in a drive to become
He said he would continue to pump money into the
economy to keep it growing fast enough to provide jobs.
"I think the main problems facing us — lagging
agricultural development and slowing income growth of farmers — have
become a major factor restraining our efforts to expand domestic
demand," he said.
He said the private sector was an important channel
for creating jobs and would no longer be discriminated against in terms
of bank loans and taxes.
FRANCE HALVES GROWTH TARGET
France's economy will grow at barely half the pace
previously predicted this year thanks to the global downturn and the
effect of impending war, the country's prime minister has admitted.
In an interview with French business daily Les Echos,
Jean-Pierre Raffarin said the government saw expansion of 1.3% rather
than the 2.5% predicted in the budget six months ago.
It had considered a 1.5% prediction, but decided to
err on the side of caution because the effect of war in Iraq, and of the
increasingly volatile exchange rate of the euro, he said.
He also called for the European Central Bank to cut
interest rates further, after its cautious quarter-point cut last month.
And he warned that the rolling tax cuts the centre-right
government promised when it won last year's election might have to wait
till economic growth returned to 2.5%.
WAR WORRIES EUROPE'S INVESTORS
European investors are showing jitters at the start
of war in Iraq.
Ending a four-day rally, European markets initially
saw their main stock indexes fall by up to 1%, but an hour later they
had all recovered their losses.
Asian markets, in contrast, had posted strong gains,
while the US dollar was trading firm after US aircraft began to strike
targets in Iraq.
Tokyo's Nikkei index gained 1.8% or 144 points to
close at 8,195 — although during the market experienced fairly hefty
In Hong Kong there was more uncertainty. The Hang
Seng index initially gained more than 120 points or 1.3%, only to lose
all of that.
TEA GROWERS FEAR PRICE FALLS
Kenya's tea exporters are struggling to cope with
falling prices which they fear could threaten the viability of their
Tea is a major export crop for Kenya, outflanking
coffee and contributing 20% of the country's foreign earnings.
But a mix of falling demand and rising output has
caused a sustained drop in prices.
Part of the problem, Kenyan tea traders say, is that
South East Asian countries such as Indonesia and Vietnam have increased
the amount of tea they are growing.
"Vietnam, which expanded their coffee industry
to the detriment of Kenya — they are going to expand their tea
industry without a doubt," says Norman Wilson, managing director of
Africa Tea Brokers in Mombasa.
US REJECTS ARCTIC OIL DRILLING PLAN
The US Senate has narrowly rejected a plan to allow
oil drilling in an Alaskan wildlife refuge.
The defeat is a major setback for President George
Bush's administration, which had insisted that oil exploration in the
19m acre (7.7m hectare) Arctic National Wildlife Refuge would help
safeguard America's supply of energy.
Despite intense lobbying by the White House, an
amendment was passed by 52 votes to 48 removing the provision allowing
drilling to commence from the 2004 budget resolution.
DIAMOND MINERS FACE 8% CHARGE
Mining companies in South Africa are to be charged
royalties of up to 8% on the sales of diamonds and other minerals they
The government says the money will be used as part of
its programme to repair some of the social and economic damage done to
the country's non-white communities by decades of apartheid.
Under the proposals gold producers will pay a 3%
royalty, platinum miners 4% and diamond producers 8%.
The coal-mining industry will be charged only a 2%
royalty and the whole system will be phased in by 2007.
BAPTISM OF FIRE FOR JAPAN BANK BOSS
Japan's central bank chief has started his first day
on the job just as a massive push is prepared to prop up the finances of
the country's banks.
Taking office as US missiles began to fall on
Baghdad, the new Bank of Japan governor Toshihiko Fukui walked straight
into a meeting of a special committee to work out what the war might do
to Japan's fragile economy.
As well as "closely monitoring"
developments, the central bank plans to inject 1 trillion yen into the
economy by buying up government bonds.
US AND JAPAN TO PROTECT MARKETS
Just days ahead of a war, the US and Japan are
prepared to co-operate to support the financial markets if there is a
A deal was struck in the US between a former Japanese
finance minister and the head of the US central bank, the Federal
Reserve's Alan Greenspan.
FED ON WAR ALERT
US interest rates have been left unchanged at a
41-year low of 1.25%.
But the Federal Reserve signalled it was ready to cut
rates quickly if a war in Iraq takes an economic toll.
The Fed said it would practice "heightened
surveillance" over the situation in Iraq.
And, in an unusual move, it failed to issue its usual
assessment of the risks facing the US economy.
The Fed's Federal Open Markets Committee (FOMC)
usually releases a statement with a clear signal to the markets about
whether it is leaning to a future lowering, raising or no change in
LONRHO DESERTS AFRICA
Lonrho Africa, once one of the continent's most
powerful and wide-reaching business empires, has decided to desert
Africa for more profitable ventures elsewhere.
Chairman Bernard Asher said in a statement that the
firm would sell its remaining assets in Africa this year to seek
opportunities with "good investment returns and more secure
operating conditions than prevail in much of Africa today".
US SEEKS $289BN IN TOBACCO CLAIM
The US Justice Department is suing the world's
leading tobacco companies for $289bn (£184.5bn) of their profits for
the alleged fraudulent marketing of cigarettes.
A court filing by the US government claims the
companies lied about the link with cancer and the addictiveness of
"In short, defendants' scheme to defraud
permeated and influenced all facets of defendants' conduct — research,
product development, advertising, marketing, legal, public relations and
communications — in a manner that has resulted in extraordinary
profits for the past half-century, but has had devastating consequences
for the public's health," the court document said.
SMITH & NEPHEW BUYS £1.5BN RIVAL
British medical devices company Smith & Nephew
has said it is buying Swiss firm Centerpulse for £1.5bn.
Smith & Nephew said in a statement the deal would
create a "leading global orthopaedics company."
The newly combined group is set to become the global
number three in the $14bn (£8.9bn) orthopaedics market with a market
capitalisation of £4.7bn.
UK HOUSE PRICES FALLING
UK house prices have dropped for the first time in
two years and the fall is the largest since 1995, according to a survey
by the Royal Institution of Chartered Surveyors (RICS).
Surveyors reported London was hardest hit as
prospective buyers worried about war, possible terror attacks and
continued economic uncertainty.
Other parts of southern England suffered price falls
but further north the market continued to enjoy robust growth.
UK INFLATION REACHES 3%
UK inflation jumped by more than expected last month
to reach 3%, its highest level since May 1998.
The underlying rate — which excludes mortgage
interest payments — rose from January's figure of 2.7%, pushed higher
by the rising cost of clothes and shoes.
The figures, from the Office for National Statistics,
showed the headline rate of inflation rose to 3.2%, up from 2.9% in
Despite the increase in prices, analysts said the
Bank of England was unlikely to respond by raising interest rates.
BUSINESS LEADERS' BUDGET PLEA
The CBI has urged the Chancellor Gordon Brown not to
raise taxes on business in next month's budget.
The employers' organisation said any tax increases
risked more cuts in investment by companies which would damage the UK
It said investment by firms has dropped by 15% over
the past couple of years, mainly due to higher taxes and more red tape.
The CBI also called for £1bn of measures to help
business deal with urgent problems with pensions and employer insurance.
BANK VOTED 8-1 FOR STEADY RATES
One member of the Bank of England's monetary policy
committee (MPC) voted for a cut in interest rates earlier this month.
Minutes of the latest MPC meeting, showed that
Christopher Allsop voted for a 0.25% cut in rates.
The minutes of the March 5-6 meeting showed the
committee voted 8 against 1 to keep UK interest rates steady at a
48-year low of 3.75%.
OIL GIANTS SHUT NIGERIA PLANTS
A second major oil producer has shut down some of its
facilities in the southern Delta region of Nigeria following several
days of clashes which have left 10 people dead.
The Nigerian subsidiary of Chevron Texaco said it was
withdrawing staff from the area to ensure their safety.