Part One
Part Two
The International Monetary Fund (IMF) aims at providing loans to the nations in need as well as stabilizing the exchange rates. Among the roles of this organization include helping countries handle the economic crisis, promoting the stability of their exchange rates, and surveilling the economies. Greece, Iceland, Ukraine, and Hungary are among the numerous countries that the International Monetary Fund has given financial support during their difficult economic and financial times. Thus, this part of the paper explains the recovery process in each of these four countries.
Greece has been experiencing economic challenges and financial difficulties for a couple of years. In the first quarter of 2010, the International Monetary Fund provided this country with financial assistance to help it cope with the problems as above mentioned. In particular, the purpose of this financial assistance was to support Greece’s efforts to resolve the social challenges, deal with the economic inequities, and create employment as well as grow its economy. According to PricewaterhouseCoopers (2014), the recovery process in Greece remains fragile. In other words, the economic conditions in Greece have not improved as expected. It continues experiencing a recession. Greek’s government debt is 157 percent of GDP (PricewaterhouseCoopers, 2014). Besides, the country’s Gross Domestic Product has not increased despite the financial assistance by the International Monetary Fund.
As reported by the PricewaterhouseCoopers (2014), the GDP in Greece has declined by 25 p.p. In essence, the GDP in this country has been dropping every year since 2010, and this explains why its recovery process has not been below the expectations. Besides, the rate of unemployment in Greece has continued to rise despite the 2010 bailout. According to the PricewaterhouseCoopers (2014), the rate of unemployment in this country for the period 2009-2013 rose to 27 percent. The country only received a slight decline in the rate of unemployment in 2014. Youth unemployment has remained very high in Greece. It is disheartening to note that Greece has continued to face economic problems. The prices in Greece have been falling for the last three years. In fact, this can be attributed to the political upheaval and economic decline. As a matter of fact, the rate of inflation in Greece from 2010 has been decreasing substantially. For instance, it was negative during the start of this year.
Unlike in Greece, the recovery process in Iceland has been substantial since the financial assistance by the International Monetary Fund in the fourth quarter of 2008. It is crucial to note that Iceland has recovered after the 2008 financial crisis. During this crisis, Iceland was on the verge of collapsing. Notably, the financial assistance offered by the IMF to this country has significantly improved its economic performance. In essence, the country has lately been among the best-performing economies in Europe. It is worth noting that the recovery process in Iceland has been very encouraging. Iceland has been one of the countries in Europe with low rates of unemployment. Besides, this country has experienced low inflation and stable exchange rate.
As reported by the Iceland Magazine Staff (2016), Iceland’s GDP is estimated to grow 4.2 percent in this year, and both the unemployment and inflation remain low. Iceland has a robust balance of payments, which has helped it repay a significant percentage of its International Monetary Fund loans. The Icelandic economy has continued to grow, and the trend will remain. According to Iceland Magazine Staff (2016), the Iceland’s domestic demand is expected to be the main driver of the country’s economic growth. The positive recovery process in Iceland can be attributed to its sound policies. In essence, Iceland quickly restored its banking system. During the financial crisis, the country sought help from the International Monetary Fund after the nationalization of its banks. The Iceland Magazine Staff (2016) reports that the unemployment in Iceland continued to drop during last years and is anticipated to remain low. The Iceland’s central bank policies have significantly helped steer the rate of inflation close to the target.
The Ukraine’s economic is continuing to recover thanks to the financial assistance by the International Monetary Fund during the second quarter of 2014. Ukraine’s economy performed poorly during the initial quarter of 2015, but, as time progressed, it improved quickly. The rate of unemployment in Ukraine has remained high. In 2014, Ukraine’s GDP declined significantly and this also continued in 2015. The trend will continue since it is anticipated that the GDP will also fall in this year. The falling Ukraine’s GDP suggest that the rate of unemployment will continue increasing. Ukraine’s budget and fiscal performance continued performing better in 2015 despite a low growth in the Gross Domestic Product. The rate of inflation in Ukraine is expected to continue falling.
Just like Iceland, the recovery process in Hungary is also positive. It is imperative to note that Hungary fully repaid the loan it had taken in 20008 from the International Monetary Fund and other international lenders. In essence, the country’s economy has grown progressively. Hungary’s economic outlook at the moment is optimistic. The rate of unemployment in this country has continued to decline. Besides, Hungary’s interest rate, as well as inflation rate, have continued to decline. The consumer prices have also been declining. Hungary has also experienced a steady growth in its GDP.
References
PricewaterhouseCoopers (2014). Directions for Economic Recovery in Greece. PricewaterhouseCoopers Business Solutions SA. Retrieved from http://www.mostimportantreform.info/Directions_for_Economic_Recovery_in_Greece_PWC.pdf
Iceland Magazine Staff. (2016, February 11). GDP of Iceland projected to grow 4.2% in 2016, unemployment and inflation to remain low. Iceland Magazine. Retrieved from http://icelandmag.visir.is/article/gdp-iceland-projected-grow-42-2016-unemployment-and-inflation-remain-low
