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‘People Who Are Salaried Are Crying’: Taxes on Workers Add to Debt Misery

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The pay stubs tell the story. Hefty deductions to help cover the cost of Kenya’s new funds for affordable housing and health insurance. More money subtracted for jacked-up contributions to the National Social Security Fund and an increase in the tax rate.In a matter of months, Kenyans with a 45,000-shilling-a-month salary — roughly $350 — saw their take-home pay shrink 9 percent, to $262.Pay stubs for an employee at Shining Hope for Communities, a nonprofit in Kenya:JUNE 2024JANUARY 2025“People who are salaried are crying,” said Kennedy Odede, the founder of a self-help association in Nairobi’s Kibera slum.The increased payroll taxes are one element of President William Ruto’s desperate bid to raise revenue to keep the government running and pay off Kenya’s staggering foreign debt.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Scott Bessent Accuses IMF and World Bank of ‘Mission Creep’

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    Treasury Secretary Scott Bessent on Wednesday called for major overhauls to the missions of the International Monetary Fund and the World Bank but said the United States remained committed to maintaining its leadership role at the global economic institutions.The comments, at a speech on the sidelines of the spring meetings of the I.M.F. and the World Bank, come at a moment of concern among policymakers that the Trump administration could withdraw the United States entirely from the fund and the bank.The United States has upended the global trading system in recent months, and the views of the Trump administration on climate change, international development and economic equity are often at odds with those of the other nations that are shareholders in the global institutions.On Tuesday, the I.M.F. downgraded its outlook for growth globally and in the United States as a result of President Trump’s punishing tariffs. Trade tension between the United States and China, the world’s largest economies, threaten to weigh on output this year and next.In his remarks, Mr. Bessent defended the Trump administration’s trade actions and called for China to curb economic practices that he said were destabilizing international commerce. He noted that the United States was engaged in trade talks with dozens of countries and expressed optimism that these negotiations would help rebalance the world economy and make the global trading system more fair.It remains unclear when, or if, the United States and China will begin to engage in talks. Mr. Trump has said he expects to speak with Xi Jinping, China’s leader, but no formal conversations have been scheduled.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    IMF Warns Trump Tariffs Will Weaken Economy and Increase Inflation

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    Kristalina Georgieva, the managing director of the International Monetary Fund, warned in a speech that protectionism erodes productivity.The world economy is expected to grow slower this year and experience higher inflation than previously anticipated, according to new forecasts to be released by the International Monetary Fund that will show the global fallout of the U.S. trade war.The growth projections, to be released early next week, will offer the clearest indication to date of the damage that President Trump’s economic policies are having on global output. Since taking office in January, Mr. Trump has imposed a wide range of tariffs on most of America’s trading partners, while ratcheting levies even higher on imports from China, Canada and Mexico.“Our new growth projections will include notable markdowns, but not recession,” Kristalina Georgieva, the I.M.F. managing director, said on Thursday in a speech ahead of the spring meetings of the I.M.F. and the World Bank. “We will also see markups to the inflation forecasts for some countries.”Ms. Georgieva’s comments added to a growing chorus of top economic officials, including the heads of the Federal Reserve and the World Bank, who have sounded alarms this week about the potential harm that Mr. Trump’s policies could cause.The European Central Bank on Thursday lowered interest rates, saying that “the outlook for growth has deteriorated owing to rising trade tensions.” Central bankers, finance ministers and other policymakers will gather in Washington next week as they continue to grapple with how to respond.Ms. Georgieva was careful in her criticism of the Trump administration’s policies, which have created widespread uncertainty for businesses and are disrupting international supply chains. But she made clear her concerns about the costs of protectionism.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Prepares to Take On the US Trade Deficit, a Familiar Nemesis

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    The trade deficit has long drawn the president’s ire. Now, he’s preparing to take it on again.To President Trump, one economic number represents everything that is wrong with the global economy: America’s trade deficit.That deficit is the total value of what the United States imports from other nations, minus its exports to other countries. The fact that America runs a trade deficit reflects how the nation’s appetite for foreign goods now far outpaces what U.S. factories and farms send abroad.Official data set for release on Wednesday morning is expected to show that the U.S. trade deficit widened to nearly $1.2 trillion in 2024. For Mr. Trump, the fact that the United States imports more goods than it exports is a sign of economic weakness and evidence that the world is taking advantage of America. While the country’s trade deficit has been widening for years, that gap could end up being a key reason Mr. Trump decides to impose tariffs on Europe, China, Canada, Mexico and other governments.Mr. Trump rolled out a dramatic series of trade actions against Canada, Mexico and China in recent days, signing executive orders to put tariffs on all three nations in what he said was an effort to stem the flow of drugs and migrants to the United States.But he also cited the trade deficit as he talked about tariffs writ large, making clear that the gap between what America sells and what it buys remains top of mind for Mr. Trump.

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    America’s Trade Deficits and Surpluses With Other Countries
    Note: Data is adjusted for inflation and shows 2023 trade in goods, the latest available full year of data.Source: Census BureauBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    For Syria’s Economy, the Way Forward Starts With Sanctions Relief

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    Years of strife ruined the energy sector, battered the currency and strangled growth. The West must ease financial controls to help the economy, experts say.Although the collapse of President Bashar al-Assad’s government in Syria was shockingly quick, rebuilding the devastated economy he left behind will be painfully slow.After nearly 14 years of brutal civil war and political repression, most of Syria’s oil and gas wells, roads, electricity grids, farmland and infrastructure are in ruins. Ninety percent of the population is living in poverty. The value of the Syrian pound has plummeted, and the central bank’s reserves of foreign currency — needed to buy essentials like food, fuel and spare parts — are nearly depleted.Before the war, oil accounted for two-thirds of Syria’s exports and agriculture made up roughly a quarter of economic activity. More recently, Syria’s most profitable export was captagon, an illegal, addictive amphetamine controlled by a cartel of politically connected elites.“The whole economic system in Syria is not functioning,” said Samir Aita, a Syrian economist and the president of the Circle of Arab Economists.Ahmed al-Shara, the leader of the rebel coalition that has taken power in Syria, has a daunting task ahead to unify the rebel factions, reconstitute the government, re-establish the rule of law, provide security and manage essential services like the distribution of water and other scarce resources.Even so, there is widespread agreement that the single most important step in rebuilding Syria’s economy can be taken only by the United States: Lift the punishing layers of sanctions that have effectively cut off Syria from international commerce and investment.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Countries Weigh How to Raise Trillions for Climate Crisis at COP29

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    Low-income countries need at least $1 trillion a year to manage climate change. Donald Trump’s victory just made that more difficult, but options exist.Money: It’s the most contentious subject at the international climate talks this week in Baku, Azerbaijan. How much? From where? What for?Getting big cash commitments would be hard enough without wars, a pandemic and inflation having drained the reserves of rich countries that are expected to help poorer ones cope with climate hazards.It just got even harder. The election of Donald J. Trump as president of the United States all but guarantees that the world’s richest country will not chip in. (Mr. Trump has said he would withdraw from the global climate accord altogether, as he did during his first term.)So now what?Several creative ideas are circulating to raise money for countries to invest in renewable energy and adapt to the dangers of climate change. They include levying taxes, tackling debt and pushing international development banks to do more, faster.The new proposals come with steep hurdles of their own, but the traditional way of raising money — passing around the hat and asking donor countries to make pledges — has failed to meet the need.The last time a climate finance goal was established, in 2009, rich countries promised to mobilize $100 billion a year by 2020. They were two years late in meeting that target, and about 70 percent of the money came as loans, infuriating already heavily indebted countries.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    I.M.F. Says Inflation Fight Is Largely Over but Warns of New Threats

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    The International Monetary Fund said protectionism and new trade wars could weigh on growth.The global economy has managed to avoid falling into a recession even though the world’s central banks have raised interest rates to their highest levels in years to try to tame rapid inflation, the International Monetary Fund said on Tuesday.But the I.M.F., in a new report, also cautioned that escalating violence in the Middle East and the prospect of a new round of trade wars stemming from political developments in the United States remain significant threats.New economic forecasts released by the fund on Tuesday showed that the global fight against soaring prices has largely been won: Global output is expected to hold steady at 3.2 percent this year and next. Fears of a widespread post-pandemic contraction have been averted, but the fund warned that many countries still face a challenging mix of high debt and sluggish growth.The report was released as finance ministers and central bank governors from around the world convened in Washington for the annual meetings of the I.M.F. and the World Bank. The gathering is taking place two weeks ahead of a presidential election in the United States that could result in a major shift toward protectionism and tariffs if former President Donald J. Trump is elected.Mr. Trump has threatened to impose across-the-board tariffs of as much as 50 percent, most likely setting off retaliation and trade wars. Economists think that could fuel price increases and slow growth, possibly leading to a recession.“Fear of a Trump presidency will loudly reverberate behind the scenes,” said Mark Sobel, a former Treasury official who is now the U.S. chairman of the Official Monetary and Financial Institutions Forum. Mr. Sobel said global policymakers would probably be wondering what another Trump presidency would “mean for the future of multilateralism, international cooperation, U.S.-China stresses and their worldwide ripples, and global trade and finance, among others.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Yellen Rebukes Chinese Lending Practices in Call for Debt Relief

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    In an interview, the Treasury secretary also highlighted progress at the World Bank and the International Monetary Fund ahead of annual meetings this week.Treasury Secretary Janet L. Yellen rebuked China’s “opaque” lending practices and urged global financial institutions and other creditors to accelerate debt relief to low- and middle-income countries in an interview on Monday.Her comments came ahead of this week’s annual meetings of the International Monetary Fund and the World Bank, where global economic policymakers are gathering in Washington at a pivotal moment for the world economy. Inflation has eased, but war in the Middle East has threatened to jolt energy markets. High interest rates are dogging poorer economies, which have struggled to pursue critical development initiatives given their mounting debt burdens.“It’s a substantial burden and can impede their investments in things that will promote sustainable development or dealing with pandemics or climate change,” Ms. Yellen said of the debt burdens of low- and middle-income countries.The I.M.F. and the World Bank have faced backlash in recent years for moving too slowly in their efforts to help struggling economies and for pushing nations to enact economic reform measures, such as sharp spending cuts, that have brought resistance and social unrest.The Treasury secretary will hail signs of progress at multilateral institutions like the monetary fund and the World Bank in a speech on Tuesday that highlights an expansion of lending capacity and faster approval of new projects under the direction of the Biden administration.Global debt continues to be a problem, however, and the United States has been pushing for a broader international relief initiative that goes beyond efforts to aid countries that are on the brink of defaulting on their loans.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Raises New Concerns Over Chinese Lending Practices

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    A Treasury official will call for greater transparency over emergency currency “swap” loans to struggling countries by China’s central bank.The United States is raising new concerns about China’s practice of making emergency loans to debt-ridden countries, warning that a lack of transparency surrounding such financing can mask the fiscal predicaments facing fragile economies that have turned to China for help.A senior Treasury official, Brent Neiman, publicly aired concerns about the practice in a speech on Tuesday in which he urged the International Monetary Fund to push China for greater clarity about its lending terms. The Biden administration broached the issue directly with Chinese officials in Washington this year during a meeting of a recently created bilateral economic and financial working group.Chinese loans to countries already struggling to repay their debts are being made through China’s central bank using so-called swap agreements. These agreements allow countries to borrow Chinese renminbi and keep those funds in their central reserves while using the U.S. dollars that they hold to repay foreign debts.The financing is essentially a line of credit, in which a country swaps its own currency for renminbi and agrees to pay Beijing a high interest rate. The arrangement allows those countries to use their dollar reserves to finance trade or other government needs. They can also use the funds to pay debts owed to Chinese banks or to make purchases from China, creating even deeper ties to its economy.China has provided more than $200 billion in emergency financing in recent years. Chinese state media reported this year that the central bank had 31 currency swap agreements in force worth a combined $586 billion. Chinese currency loans tend to come with higher interest rates than those offered by the Federal Reserve or the I.M.F.Such currency loans do not always appear on the balance sheet of the borrowing nation, obscuring the extent of its liabilities. That lack of information can make it harder for other investors to know how deeply in debt a country is and has fueled criticism that the Chinese loans could leave the recipients worse off.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More