IMF Un-Credibility Watch: Ukraine Edition

Tyler Durden's picture

The IMF has lied (about 'not' proposing a 71% income tax) and has been shown as a serial over-optimistic forecaster (world growth disappointments and hockey sticks) but the simply incredible hope that Christine Lagarde's PhDs created in their growth expectations for Ukraine make their Greece "Oops" moment look like nothing. As CFR rebukes, we see the IMF’s growth forecasts for Ukraine and Greece not as forecasts at all, but rather as assumptions necessary to justify the IMF’s interventions. Credibility -> 0.

As we noted before: The topic of the IMF's idiocy - unquestioned here following years and years and years of absolutely horrific forecasts, not to mention charts like this one courtesy of the Troika, of whom the IMF is a proud member ...

... has been widely covered in the past.


And now CFR takes on the idiocy that is the IMF's Ukraine forecasts...

The IMF approved a $17 billion 24-month stand-by lending arrangement with Ukraine at the end of April.  The Fund sees the Ukrainian economy contracting 5% this year, but is enormously confident that its program will quickly set things right, projecting 2% growth next year and 4%+ growth in subsequent years.

We’ve seen this storyline before – in Greece, just a few short years ago.  As the graphic above shows, the recovery projected for Ukraine is a more optimistic version of that envisioned for Greece in 2010, which turned out to be way too optimistic.  The IMF saw Greece returning to growth within two years; instead, if it is lucky, Greece may just avoid yet another year of contraction in year 4.  In its ex-post evaluation of the program, the IMF acknowledges that its assumptions about the Greek economy were overly sanguine; in particular, its estimated fiscal multipliers were too low and structural reform was expected to contribute too much to private growth too soon.

Ukraine’s macro-fundamentals today are generally better than Greece’s in 2010: a debt-to-GDP of 57% (vs. 133% for Greece in 2010); a budget deficit (including Naftogaz) of 8.5% (vs. 8.1% for Greece); and a current-account deficit of 4.4% (vs. 8.4% for Greece).  But Ukraine is also on the verge of war, or civil war – unlike Greece in 2010.

In short, we see the IMF’s growth forecasts for Ukraine and Greece not as forecasts at all, but rather as assumptions necessary to justify the IMF’s interventions.

There are no doubt compelling geopolitical reasons for foreign financial assistance in both cases, yet we would assert that the IMF is the wrong institution to be intervening for such reasons.  If and when the losses start materializing for these interventions, we suspect that the historical European claim on the Fund managing directorship will be among the first casualties.


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NotApplicable's picture

Thing is, as long as they are allowed to exist (and thus act), credibility means little.

CrashisOptimistic's picture

"The IMF approved a $17 billion 24-month stand-by lending arrangement with Ukraine at the end of April. "


My recall is about 4B in first tranche was already sent to Ukraine, with 2B budgeted to Gazprom.

Gazprom was sent none of it.

debtor of last resort's picture

Stop accumulating gold, and we'll pay your gas bill.

AlaricBalth's picture

" If and when the losses start materializing for these interventions, we suspect that the historical European claim on the Fund managing directorship will be among the first casualties."

The above statement from the CFR is the most important, in my humble opinion.

There has always been an informal "gentlemens agreement" that the World Bank President is named by the US, and the IMF Managing Director is traditionally a European.

The Council on Foreign Relations is a US based, Rockerfellerian construct which massages any message emanating from it very methodically. For this group to state that European leadership of the IMF should be forfeit due to mismanagement is very telling as to the state of affairs between the US and Europe.

What is interesting is this "shot across the bow" of the IMF was released just prior to Bilderberg convening tomorrow in Copenhagen. There is clearly a "disturbance in the Force" and the US is not pleased with Brussels.

Victoria Nuland said "...fuck the EU." Well, fuck the EU, indeed.

teslaberry's picture

astute observation. 


china has been angling for more voting power in the imf. 


what's the point of fighting ww3 for the right to rebuild and rechair imperialist debt programming instiuttions when in fact we can now hopefully negotiate the transition of these privileges to those nations that have saved the most 'money' and have created the biggest industrial production base. 

if china cannot negotiate its way to power , then evetnually a recalcitrant west will find their only option is to instiigate a protectionist trade war with china and then real war. after all ---if you cannot buy power with the money you save-------well why not dump that money into gold?

and this , is where capital controls and trade protectionism come into play as a method of corralling people into the most useless asset of all heading into a genuine war----cash. 


max2205's picture

Pretty sure everyone knows GelinYellin is printing for the EU and IMF and every other initial set

ptoemmes's picture

Too bad you can't trade IMF predictions...I'd be inclined to short this one. Vegas anyone?

i_call_you_my_base's picture

These are liar's loans where the bank lies for you.

ThisIsBob's picture

No gaz, no growth.  Pay the damn bill lady.

debtor of last resort's picture

Tylers, you leave them no room at all. Give it a break will ya....

pashley1411's picture

The IMF's role is simply to shill for the new world order.   Any charts, projections, and statements are for the bird cage.

Rusty Shorts's picture






1) United States - 8,133.5

2) Germany - 3,395.5

3) IMF - 2,813.0

4) Italy - 2,451.8

5) France - 2,435.4

6) China - 1,054.1

7) - etc.,etc.


So, on a map, IMF is located between Andorra and Spain???

Cognitive Dissonance's picture

Anyone begging for a loan from the IMF does not want credibility of any kind to interfere with the approval process.

Are you kidding? They'll never get a loan that way.

ebworthen's picture

The International Malevolence Fund steals from the public treasuries of member nations.

They are enriching banks and oligarchs at the expense of taxpayers; therefore, lying is requisite.

SmittyinLA's picture

the IMF EU is a currency debasement/mass immigration looting operation, NOT A STATE OR UNION, the EU is the antithesis of sovereignty and human rights, its a beard for Muslim invasion, they even call those opposed "Euroskeptics" or non-believers.

a person who doubts the truth of a religionespeciallyChristianity, or of important elements of it.

The Muslim dont call them skeptics, they call them infidels. 




Fix-ItSilly's picture

A poor article. The IMF forecasts for prior Ukraine bailouts should have been used, not Greece.

q99x2's picture

Hey if they have control of the printing press then whatever they say is true. That is the problem. Some nations military forces will have to take the presses from the IMF and central banks because they won't stop until war intervenes. They can't, never have and won't. Financial war has replaced physical war since atomic weapons were developed. Financial warfare provides the same outcome because when it fails physical war follows. So if military intervention removes financial warfare before financial warfare results in physical warfare then we still have a chance to survive as a species. And, the opportunity to politicians and businesses is higher than any time in the past. Intervention and removing the criminal activities of banks at this time is the easiest and most profitable way to proceed.

Volkodav's picture

If IMF was any legit, it would never deal with illegal coup installed governments....

instead is part of living high off the loot...

SpanishGoop's picture

See the hockey stick break as the gas gets turned off.


Atomizer's picture

Thank goodness people are starting to understand the IMF. The next awareness is understandings the Bank of International Settlements. Keep at it zerohege family.

JailBanksters's picture

There's a reason they earned the nick name of the

International Mafia Fund, because that's exactly what they are, the Jewish Mafia

messystateofaffairs's picture

The purpose of the IMF is to place nation states in debt slavery to reduce their sovereignty. They "lend" money stolen or fabricated from (formerly) rich nations to developing countries transient politicians knowing full well the money will be wasted and stolen. Then they come in with their conditions to override sovereign decision making. As irresponsible lenders they deserve to be defaulted on and countries citizens don't feel in any way obligated to meet the debts contracted by long dead or gone political "representatives".

The IMF is a NWO slaver mechanism and nothing more. Only two discussions about the IMF need to be made. How soon should we default and what mechanisms can a country put in place to ensure they are never allowed to return.