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Australia may resume leading the world in raising borrowing costs, increasing the benchmark interest rate for the fourth time in five meetings, economists say. Traders aren’t so sure.

Governor Glenn Stevens will boost the Reserve Bank of Australia’s overnight cash rate target to 4 percent from 3.75 percent, according to 14 of 19 economists surveyed by Bloomberg. Futures traders estimate a 54 percent chance of an increase when the decision is announced at 2:30 p.m. tomorrow in Sydney.

Australia’s economy probably grew the most in 1 1/2 years in the fourth quarter, a separate analyst’s survey ahead of a report on March 3 shows, boosted by A$22 billion ($20 billion) in spending by Prime Minister Kevin Rudd on roads and schools. Concerns about sovereign debt in Europe and financial markets turmoil may prompt Stevens to wait another month, some economists say.

“Tomorrow’s decision is close to a coin toss,” said Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney and the only analyst surveyed by Bloomberg who correctly predicted Stevens’ first rate increase in October. “Rates need to go up, but if they don’t it’s because there’s uncertainty about how the consumer will hold up, sovereign debt, and weak data out of the U.S.”

Group of 20

Boosting the benchmark rate tomorrow would make Stevens the first central banker from a Group of 20 economy to raise borrowing costs this year. He was the first in the world to increase rates three times last quarter, when he raised the key rate in three quarter-point steps to 3.75 percent from a half- century low of 3 percent.

By contrast, the U.S. Federal Reserve Chairman Ben S. Bernanke said last week the world’s largest economy is in a “nascent” recovery that still requires low interest rates. The Fed has kept its benchmark rate close to zero since late 2008. The European Central Bank’s rate is at a record low of 1 percent.

A rebound in Australian consumer confidence, higher business optimism, surging house prices, a drop in unemployment, and signs of an investment boom in resources projects such as Chevron Corp.’s Gorgon natural gas field off Western Australia are forecast by the central bank to fuel an acceleration in Australia’s economy, one of few to skirt last year’s recession.

Australian manufacturing expanded last month at the fastest pace in more than two years, a report showed today. The performance of manufacturing index increased 2.8 points from January to 53.8, Australian Industry Group and PricewaterhouseCoopers said.

‘Gentle Retreat’

Gross domestic product probably rose 0.9 percent in the fourth quarter from the previous three months, when it gained 0.2 percent, according to the median estimate of 18 economists surveyed by Bloomberg News. The economy probably expanded 2.4 percent from a year earlier, they said. The figures will be released at 11:30 a.m. on March 3.

“With the shrinking unemployment rate and the likely rebound in December-quarter GDP, we are convinced that another gentle retreat from the accelerator is required,” said Annette Beacher, an economist at TD Securities Ltd. in Singapore.

A report published last week showed business investment jumped in the fourth quarter at almost three times the pace predicted by analysts as companies raised their forecasts for investment plans to the highest level in five years.

Chinese Demand

BHP Billiton Ltd., the world’s largest mining company, said last month it will increase capital spending on iron-ore mines and oil fields by 63 percent next year to $20.8 billion from $12.8 billion this year.

Rising Chinese demand for Australian iron ore and coal is stoking a record boom in mining investment that may last more than a decade, central bank Deputy Governor Ric Battellino said on Feb guaranteed online payday loans. 23. Investment in new mines, ports and infrastructure may reach 6 percent of GDP, more than double the amount spent during the last resources boom in the late 1970s, he said.

Chevron, Exxon Mobile Corp. and Royal Dutch Shell Plc have this year begun construction on the A$43 billion Gorgon natural- gas venture, the nation’s single-biggest investment project that is forecast to generate as many as 10,000 jobs.

The economy has less scope than previously expected for “robust” growth that doesn’t stoke inflation, Governor Stevens told a parliamentary committee in Canberra on Feb. 19. “Monetary policy must therefore be careful not to overstay a very expansionary setting.”

House Prices

While inflation in Australia cooled in 2009 amidst the global recession, the central bank has pointed to accelerating house prices as a key reason for boosting borrowing costs last quarter.

House prices jumped 11.8 percent in the year through January, according to a Feb. 26 report by real-estate monitoring company RP Data-Rismark, whose figures are used by the central bank in its quarterly monetary policy statement.

Retail sales rose 0.5 percent in January after falling in December for the first time in five months and building approvals gained for a third straight month, according to Bloomberg surveys of analysts ahead of reports to be released tomorrow.

“Australia’s economy is in much better shape than was anticipated when rates were cut to a generation low a year ago,” said Rory Robertson, an economist at Macquarie Group Ltd. in Sydney. “I’ll be very surprised if the Reserve Bank doesn’t decide to continue its ‘normalization’ process” tomorrow.

“After all, it has already paused for nearly 90 days having hiked three times in just 60 days,” he said.

Not Convinced

Still, not all investors are convinced that Stevens and his board will boost borrowing costs in tomorrow’s announcement.

Traders are betting there is a 54 percent chance of a quarter-percentage-point rate increase, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 8:55 a.m.

Reports published late last week have stoked speculation that the global recovery will be hampered by weak growth among the world’s biggest economies.

Confidence among households and companies in the 16-nation euro economy fell and bank loans to the private sector declined for a fifth month, plus Standard & Poor’s said Feb. 25 that it may soon downgrade Greece again as the country grapples with the region’s largest budget shortfall.

The number of Americans filing first-time claims for unemployment insurance unexpectedly rose last week, the Labor Department said in Washington.

That contrasts with Australia where reports published last month showed business confidence rebounded and employers added 194,600 jobs in the five months through January, the biggest increase in more than three years that has cut the unemployment rate to an 11-month low of 5.3 percent.

“If anyone is going to boom, surely it’s Australia,” Gerry Harvey, chairman of Australia’s largest electronics retailer Harvey Norman Holdings Ltd., said in a Feb. 26 interview. “We never really went into a recession at all. Our unemployment rate was projected to reach 7, 8, 9, or 10 percent, but it never even got to 6 percent.”

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Goldman Sachs has filed a lawsuit against seven former Atlanta-based executives in its wealth management division for soliciting employees and former clients after their departure for rival Credit Suisse.

The suit, filed Feb. 17 in U.S. District Court in Atlanta, alleges that Credit Suisse facilitated the executives’ departure promising payouts worth of millions of dollars.

The suit seeks to block the defendants from contacting their former Goldman clients and colleagues.

The five vice presidents and two associates are accused of “pirating” Goldman’s clients and trying to coax employees to defect to Credit Suisse in violation of non-solicitation clauses, the suit alleges. The suit was first reported by Reuters.

Named in the suit were: David Greene, Craig Savage, Andrew Thompson, Sharran Srivatsaa, John Pitt, Stephanie Dennard and Kim Tyson.

Atlanta’s wealth management firms have been embroiled in the industry-wide shakeup of personnel and clients, with established players and newcomers fighting over top talent.

The lawsuit states that the seven investment executives “abruptly” left Goldman on Feb. 5, after Credit Suisse offered the team “tens of millions of dollars to leave.”

The group “immediately began soliciting Goldman Sachs’ clients and employees in violation of non-solicitation clauses” that Greene, Savage, Thompson, Srivatsaa and Pitt had previously accepted. The suit alleges that Dennard and Tyson did an end around the non-solicitation clauses by approaching former colleagues and clients on their superiors’ behalf to convince them to move over to Credit Suisse, and also improperly used confidential Goldman information.

The suit states that Greene and Savage met with the head of Goldman’s Atlanta office late Feb. 5 and announced their intent to leave, and later Greene said in a phone call that he had been promised $11 million to join Credit Suisse.

The suit also alleges that the defendants told clients about a shakeup and claimed that it had destabilized the Atlanta office.

Another Goldman executive claimed in the suit he received an unsolicited offer to leave for Credit Suisse in exchange for $10 million.

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European finance chiefs said Greece may have to step up its efforts to tackle a national fiscal crisis that threatens to spread to other countries across the region.

“The Greek government is aware of the magnitude of the problems facing the country,” Luxembourg’s Jean-Claude Juncker told reporters in Brussels late yesterday after leading a meeting of euro-area finance ministers that discussed Greece’s budget plan. “The measures are a step in the right direction. We’ll have to see whether they’re enough.”

Greece last week presented its plan to push down a budget deficit that is still more than four times the European Union limit of 3 percent of gross domestic product. European Central Bank President Jean-Claude Trichet on Jan. 14 turned up the pressure on Greece, saying no nation can expect any “special treatment” after rating downgrades sparked a rout in Greece’s bonds in December and fueled concerns about default.

The Greek government’s latest proposals call for about 10 billion euros ($14.4 billion) of spending cuts and revenue increases this year to bring the budget shortfall from 12.7 percent of output to 8.7 percent by year end.

“The Greek plan leans heavily on the income side,” Dutch Finance Minister Wouter Bos said after yesterday’s meeting. “It leans heavily on one-time measures,” he said, adding that the program “needs to be more substantial.”

More-Reliable Statistics

The government in Athens presented a “very ambitious” budget-cutting program, Greek Finance Minister George Papaconstantinou told reporters yesterday. Greek officials also pledged to provide more-reliable statistics after the EU said earlier this month that the country’s data contained “severe irregularities.”

While the Greek government still has “difficult work to do,” German Finance Minister Wolfgang Schaeuble said the “serious reforms made to their statistics will help detect and avoid more problems like this in the future.” Bos said a “strong exercise” is required to make Greek data “reliable again.”

Juncker, who serves as Luxembourg’s premier and treasury minister, won a new term as head of the so-called eurogroup at yesterday’s meeting. He was unanimously appointed to a fresh term of two and half years under the Lisbon Treaty, which came into force in December.

The finance chiefs delayed until next month a decision on who will succeed Lucas Papademos as vice president of the European Central Bank, Juncker said. Luxembourg central bank chief Yves Mersch, his Portuguese counterpart Vitor Constancio and ECB Banking Supervision Committee Chairman Peter Praet are the three candidates being considered for the post.

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Personal income posted its largest gain in half a year in November and spending by individuals rose for a second straight month, according to government data released Wednesday.

The Commerce Department said income climbed by 0.4%, or $49.7 billion, during the month, after an upwardly revised 0.3% rise in October. That was the biggest gain since May, when it rose 1.5%. The figure was still below a consensus estimate of a 0.5% rise collected by Briefing.com.

Spending by individuals rose 0.5% last month, or $47.9 billion, below analysts’ expectations of a 0.7% hike. Personal spending was up 0 emergency payday loan.6% in October.

Personal savings totaled $521.1 billion in November, or 4.7% of disposable income, compared to $516.7 billion in October.

The report came one day after the government said that gross domestic product, the broadest measure of economic activity, grew 2.2% in the third quarter.

Tuesday’s report showed that consumer spending, which accounts for two-thirds of the nation’s economy, was weaker than previously thought. 

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Tiger Woods’ much-publicized marital problems have started to cost him money. But they’re probably going to hurt the pro golf tour, and its various sponsors and broadcasters, even more.

At the very least, Woods could lose significant earnings from the tour. In 2009, he was the sport’s top money winner with purses totaling $10.5 million.

Sports marketing consultant Marc Ganis said that Woods’ estimated $1 billion in lifetime earnings on and off the course mean his finances are completely secure, even if he has to pay a large divorce settlement. He said the bigger hit could be for the rest of his sport.

"The golf industry needs Woods far more today than he needs the golf industry," said Ganis.

The PGA Tour issued its own statement Friday saying it supported Woods’ decision to take a leave. "We look forward to Tiger’s return to the PGA Tour when he determines the time is right for him," the statement said.

Ty Votaw, executive vice president of the PGA Tour, said the tour couldn’t speculate on the economic impact of Woods’ absence because the length of his leave isn’t known yet.

He said final financial figures from the 2009 season are not yet available, but that they will show a decrease from the record $124 million the tour donated to charities in 2008, a close approximation of the tour’s profit. He attributed the decline to the recession.

David Carter, executive director of the Sports Business Institute at the University of Southern California, said losing Woods comes at a bad time for the PGA, given the bite the recession has put on sponsorships.

"The PGA is just now fully appreciating what the financial fallout may be," he said. "Its fallout may last for years."

Viewership for golf tournaments is likely to plunge as long as he stays off the tour. A study by rating firm Nielsen a year ago, when Woods was returning from a six-month injury rehabilitation, found that ratings for tournaments he missed in 2008 after playing them in 2007 were down an average of 47%.

Even the major tournaments are likely to take a hit in their television audience if he misses them. Nielsen found that viewership for the final day of the Masters fell 20% in the years that Woods did not win the most watched tournament.

Neal Pilson, a sports broadcasting consultant who used to run CBS Sports, said the market for ads on this year’s tournaments was soft even before Woods’ problems burst into view. "Now everyone is in a wait-and- see mode," he said.

Most of the tournaments have multi-year contract deals, but networks might need to offer additional ad time to advertisers if the ratings plunge as much as feared, said Pilson. But he said the market won’t collapse altogether, given the fact that the average golf viewer is more affluent than the fans of many other sports.

"We did sell golf before Tiger showed up. But just as there was a Michael Jordan bubble when he was winning championships with the Bulls, there has been a Tiger bubble in golf ratings," he said.

But Ganis said even after Woods returns networks might be less willing to sign new deals for the second-tier tournaments due to losses they might suffer during his absence.

But television deals are only part of the revenue stream for the PGA. It also depends heavily on sponsorship dollars cash till payday. He said Woods’ problems give sponsors one more reason to question the money they’ll spend on golf tournaments.

"They have to try to calibrate what their spending will be in the sport at a time when marketing budgets are very hard to justify," said Carter.

While some tournaments have gone out of business in the last two years, they have generally been replaced by new tournaments, including one which Woods himself hosts along with AT&T (T, Fortune 500), one of his sponsors.

Woods’ sponsors pull back

But the tour isn’t the only one that could lose sponsors. The bad publicity about his admitted infidelity could also cost Woods some of his own sponsorship deals down the road.

The first golf shoe to drop came Sunday when business consultant Accenture, which had previously made Woods the focus of its marketing campaign, announced it would no longer use him because "the company has determined that he is no longer the right representative for its advertising."

But Accenture did not respond to questions about whether it would have to continue to pay Woods under terms of his contract. Experts in the field say that while sponsors are likely to keep their Tiger Woods commercials off the air while he takes his leave from the game, most will continue to pay him the millions owed under those contracts.

The loss of sponsorship money in the future is inevitable given the damage done to the Woods image in the last couple of weeks.

"He probably won’t have to take less from the sponsors he keeps," said Ganis. "He’s made a lot of money for those guys. But he’ll probably have fewer sponsors in the future as these deals come up for renewal."

He said he thinks the deals with AT&T (T, Fortune 500), PepsiCo’s (PEP, Fortune 500) Gatorade brand and Procter & Gamble’s (PG, Fortune 500) Gillette are the deals most at risk. AT&T issued a statement over the weekend that it is "presently evaluating our ongoing relationship with him."

But Ganis said Woods is certain to keep at least a couple of his top sponsorship deals — including his biggest at Nike (NKE, Fortune 500), reported to be worth $40 million.

"There was no Nike Golf before Tiger. Nike’s not going anywhere," he said. "Neither is (video game maker) Electronic Arts."

Nike issued a statement saying that Woods and his family has "Nike’s full support," and that it looks forward to his return to playing. Nike Golf suffered a $77 million, or 11%, revenue decline in the fiscal year ended May 31, which it attributed to the recession cutting into discretionary spending, even as the company’s overall revenue rose 3%.

EA (ERTS) also issued a statement supporting Woods Friday, stating "At this time, the strategy for our Tiger Woods PGA Tour business remains unchanged."

Gillette’s statement over the weekend did not speak of its long-term plans for its deal with Woods, saying only "As Tiger takes a break from the public eye, we will support his desire for privacy by limiting his role in our marketing programs."

Gatorade did not respond to requests for comments Monday. 

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One year since the arrest of Ponzi mastermind Bernard Madoff, most of his victims are still trying to recoup their losses.

"We’ve got nothing back," said Dana Foy, a 57-year-old computer programmer in New Mexico.

Foy, who wouldn’t identify how much money he lost, saw his dream of a comfortable retirement with his wife wiped out by Madoff’s scheme, which came crashing down when he was arrested on Dec. 11, 2008.

About $20 billion in investor funds were lost to Madoff’s scam, according to the Web site of the court-appointed trustee Irving Picard, who is tasked with recovering and allocating as much of the money as possible. Some of the victims have been reimbursed, but many are still waiting.

Of the 16,000 claims that have been filed, about 70% have been processed, according to Picard. Of those 11,563 processed claims, 1,647 have been determined to be valid. Most of the claims, some 9,916, have been denied.

Most of the denied claims are "indirect" investors who did not have an account at Madoff’s firm, according to Stephen Harbeck, chief executive of the Securities Investor Protection Corporation. Indirect investors include those in feeder funds, which are other funds that place their money with Madoff. Claimants have to try and get reimbursement from those fund managers, not through the trustee.

The SIPC has allocated $561.3 million to the 1,647 approved claims. Some of those claims have been paid out and some have not. But that still falls short of the $4.69 billion the trustee has earmarked for victim compensation - much of which would come from the sale of Madoff’s assets.

The trustee has not yet sent out money from confiscated assets, which it is still in the process of recovering.

"We don’t understand why it’s taken so long," said Ilene Kent, coordinator with Investor Action Group, which was organized for Madoff victims like herself.

In an e-mail to CNNMoney.com, Harbeck identified the various factors that can affect "the reconstruction of a claim," including "the length of time a customer had an account, coupled with multiple withdrawals in addition to deposits and the completeness of the paperwork submitted by the customer."

The SIPC covers up to $500,000 per account for victims who’ve lost money. That includes Korean War veteran Allan Goldstein, 77, who said he had invested $2 million with Madoff’s firm.

His final statement from Madoff said his investments had grown to $4.7 million. Goldstein had also drawn down about $300,000 annually to live on for a number of years.

Goldstein said the trustee subtracted the withdrawals from his $2 million investment, resulting in the $320,000 he received from SIPC. He and his wife used that money to buy a house in Great Barrington, Mass. Because of his withdrawals, Goldstein is not expecting to receive money from Madoff’s confiscated assets.

Ponzi schemers operate by masquerading as legitimate money managers. Madoff didn’t invest his clients’ money — he stole it no faxing payday loan. He kept the scam going for years by allowing some of his clients to withdraw money, while fraudulently portraying those withdrawals as legitimate returns.

Goldstein said that he and his wife currently live on Social Security and assistance from their children. That’s a stark contrast from the affluent retirement that he’d planned.

"The whole thing is a nightmare," he said. "We do the best we can, and we’re surviving. We’re very happy, at least, to be living in our own home."

Madoff’s money trail

Any losses beyond SIPC are set to be recouped through the recovery of stolen assets, such as Madoff’s yacht and his multi-million dollar properties in Manhattan, Montauk, N.Y., Palm Beach, Fla. and Cap d’Antibes on the French coast.

Maureen Ebel, 61, of West Chester, Pa., said she invested $5.3 million in Madoff’s firm through two separate accounts, and the latest statement from the firm said her investments had grown to $7.3 million. She recovered $1 million from SIPC — $500,000 for each of her two accounts — but she’s still missing millions.

"I don’t think I’ll ever see any of it, quite frankly," said Ebel. "We don’t even know where it is."

So far, investigators say they have confiscated about $1.5 billion worth of assets from Madoff’s estate, which falls far short of the approximately $20 billion in investor funds that were lost to his scheme.

The recovery process continues. Picard has filed 14 lawsuits against Madoff’s friends and family.

Investigators have no idea how long it will take to track down the stolen money and have not set a deadline for discontinuing the recovery, according to the trustee’s office.

Madoff’s trail of victims

Meanwhile, Madoff languishes in prison. He pleaded guilty in March to 11 counts related to running his Ponzi scheme and was sentenced to 150 years. Madoff, 71, is incarcerated at the Federal Correctional Institution Butner in North Carolina and faces an official release date of Nov. 14, 2139.

But this provides little comfort to some of this victims.

"He’s away, he can’t hurt anyone else, and that’s a good thing," said Mike De Vita, a computer programmer from Philadelphia who lost 40 years worth of retirement savings to Madoff’s scam. "But other than that, what happens to Bernard Madoff doesn’t really matter."

Ebel, who ditched her plans for a comfortable retirement and reentered the workforce as an office manager, resents Madoff for wiping out the savings that her late husband had left her.

"[Madoff] has ruined so many lives and caused so much pain to so many people that he will never get what he deserves until he dies," she said. "May God have mercy on him." 

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The Obama administration threatened on Monday to punish mortgage lenders with fines unless they speed up efforts to give hard-pressed homeowners a permanent break on monthly payments.

With foreclosures still rising and roughly 375,000 borrowers seen as eligible for permanent loan modifications by year-end, the U.S. Treasury and Housing and Urban Development departments want to make sure that banks come through on the promise of lower payments.

“Banks should be moving more rapidly and more efficiently to decisions once documents are in and we will have more detailed metrics on that in coming months,” Assistant Treasury Secretary Michael Barr said during a conference call.

Some 650,000 borrowers have completed trial modifications under the Home Affordable Modification Program that was initiated by the Obama administration earlier this year.

The $75 billion taxpayer-financed program is aimed at slowing the pace of foreclosures. But there are frequent complaints that loan servicers are slow and lose or misplace paperwork that people have sent in.

Rick Mullen, a Valencia, California, homeowner told Reuters he had delivered documents four times to three different addresses while seeking a modification from Chase Home Mortgage.

His monthly payment was reduced more than $1,000 on a trial basis several months ago but the document requests continue.

“The bottom line is, I figure if I keep making my payments they are not going to throw me out of my house,” he said.

ANYTHING HELPS

Industry observers offered mixed praise for the Treasury’s efforts, commenting that the administration seemed overwhelmed by the rising volume of troubled loans but at least it was trying to get the system performing better.

“It’s good they are doing this,” said Thomas Lawler, founder of Lawler Economic & Housing Consulting in Leesburg, Virginia. “It’s hard to tell if the HAMP is delaying a horrible problem or is working.”

A slumping housing sector was at the center of the financial crisis that struck in 2007, dragging the U.S. economy into a deep recession that has pushed jobless rates to their highest in nearly 30 years and piled pressure on homeowners.

The Treasury and HUD want lenders to step up now to make sure trial modifications are converted into permanent cuts in monthly payments. The federal agencies are setting performance standards to make sure banks do so or explain why not.

Mortgage servicers will have to submit plans saying how they would decide whether a loan will be permanently modified. If a bank fails to meet guidelines set in an agreement with the Treasury, it would face “consequences which could include monetary penalties and sanctions,” the Treasury said.

But Barr refused to offer any details on how large fines might be or what potential sanctions banks might face. 

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U.K. house prices will rise in the next year, according to a majority of consumers in a survey last month by Rightmove Plc.

Fifty-four percent of respondents expect average house prices to be higher in 12 months, the U.K.’s biggest property Web site said in an e-mailed statement today in London. In the first quarter, more than 68 percent of consumers polled forecast lower prices in a year’s time.

House prices are rebounding from a rout that shaved about 20 percent off average values as demand for new property outstrips supply. Bank of England policy makers said this month that the outlook for the housing market’s recovery depends on the availability of mortgage finance.

“Those surveyed may feel that prices will increase, but that does not necessarily mean that they are willing or able to purchase themselves, especially given the tight lending criteria required to access the best rates,” Miles Shipside, commercial director of Rightmove, said in the statement loans until payday.

The Bank of England said last week the outlook for the housing market “will depend, in part, on the supply of mortgage credit.” While U.K. mortgage approvals climbed to their highest level for 18 months in September, they’re still only half what they were when the credit crisis started in September 2007.

Prices rose for a third month in October after they had dropped as much as a fifth from 2007, Hometrack Ltd. said earlier this month.

Rightmove said more than 68 percent of respondents described now as a good time to buy while 5 percent said it was a good time to sell. The poll of 34,056 people was conducted from Oct. 5 to Oct. 19.

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Ukraine’s government must endorse a package of policy steps and veto a wage and pension law approved by lawmakers before it gets the fourth chunk of a $16.4 billion bailout loan, the International Monetary Fund said.

The eastern European nation was due to receive $3.4 billion after a mission from the Washington-based fund arrived in Kiev on Oct. 12 to review implementation of economic reforms.

The IMF is demanding an “agreed policy package, including assurances that the wage and pension law approved by Ukraine’s parliament, which is at odds with the objectives of the authorities’ program, will be vetoed,” the fund said in an e- mailed statement yesterday.

Ukraine is relying on the loan, approved in November, to stay afloat after the global recession and credit crisis undermined demand for exports such as steel and hammered its banking industry. The IMF program was suspended for three months this year because of government disputes over state spending.

“Ukraine is interested in getting the IMF money as soon as possible as part of it is likely to be used to cover the state budget gap,” said Olena Bilan, an analyst at Kiev-based investment bank Dragon Capital. “I think it may take between two to three weeks for Ukraine to solve the issue.”

The loan program was renewed in May after Prime Minister Yulia Timoshenko pledged to narrow the state budget deficit. The country has received $10.6 billion in loan payments to date.

Failure to Comply

Since then, Ukraine has failed to comply with the loan’s terms, including raising natural gas prices for households and adopting laws needed to stabilize the financial system. At the same time, Ukraine’s parliament approved a law on Oct. 20 increasing social payments, including the minimum wage, in an effort to win voter support ahead of Jan. 17 general elections.

The IMF said in July that reducing the budget deficit would be key to releasing the next tranche. The government will run a budget gap equivalent to 8.6 percent of gross domestic product this year, the IMF estimates. That figure excludes the cost of rebuilding the financial industry.

“The mission found that the economic and financial situation in Ukraine is stabilizing as a result of policies under this program,” the IMF said yesterday. “Preserving these gains will require policy discipline and corrective actions in some areas.”

Wage, Pension Law

Timoshenko said on Oct. 21 she would ask President Viktor Yushchenko to veto the wage and pension law adopted by the parliament as it “undermines the budget and fuels inflation.”

Larysa Mudrak, the spokeswoman for Yushchenko, declined to comment when Bloomberg news called her yesterday.

The economy contracted an annual 17.8 percent in the second quarter, after shrinking 20.3 percent in the three months through March.

Yushchenko and Timoshenko have clashed over fiscal policy. The president has criticized the government running a “huge” budget gap, while the opposition has blocked the passage of legislation through parliament until its demands for higher social spending are met.

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Bankrupt U.S. chicken producer Pilgrim’s Pride Corp reported a $56.71 million profit for the fiscal fourth quarter that ended September 26 and the company said on Wednesday that, upon exiting bankruptcy, it will be a “stronger, leaner company.”

The financial report was filed late on Tuesday as required by the bankruptcy court. It is not comparable with quarterly earnings reports filed with the U.S. Securities and Exchange Commission because the data may be incomplete. But it does give an indication of the company’s financial health.

The earnings of $56.71 million were on revenue of $1.63 billion.

Pilgrim’s Pride entered bankruptcy in December 2008 and did not file a fiscal 2008 fourth quarter earnings report, but at that time it had forecast a fourth quarter loss of $802 million on sales of $2.17 billion.

It filed a reorganization plan in September and expects to exit bankruptcy by the end of this year 24 hour payday loan.

As part of its reorganization plan, Pilgrim’s Pride agreed in September to sell a majority stake to Brazilian meat company JBS SA. Earlier this month, U.S. regulators approved that deal, but bankruptcy court approval is still needed.

In addition, while under bankruptcy protection, Pilgrim’s Pride has closed and sold plants and reduced production.

“Our financial position has improved significantly this year,” Pilgrim’s Pride spokesman Gary Rhodes said in an email on Wednesday. “We have returned to profitability, the quality of our asset base has improved significantly and we are gaining additional business.”

Pilgrim’s Pride shares were down 1 cent at $6.39 in midday Pink Sheet trading.

(Reporting by Bob Burgdorfer, editing by Gerald E. McCormick)

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