(c) Other income. Other income consists mainly of interest income, gains losses as a result of exchange rate movements and other miscellaneous items.

a) Other income includes interest income and miscellaneous income in the range of 3 million per annum.

Other income consists of 1.498 million exchange rate gains and 1.928 million interest income.

Interest and other income of 3.1 million bring to 174.5 million the total income for other resources for 2004.

Miscellaneous income interest income

This includes 322.5 million in voluntary contributions, 3.5 million in interest income, and other income of 5.6 million.

Additional income was derived from miscellaneous sources, such as currency exchange adjustments, interest income, inter fund transfers and other adjustments.

Interest income includes all interest from various bank accounts and investment income earned on invested funds.

A further 61 million (3 per cent) was derived from other sources (including interest and miscellaneous income).

Savers, on the other hand, may be compelled to save more in the face of shrinking interest income.

Compared to 2003, total 2004 income, inclusive of interest income and other income, increased by 7 per cent to 882 million, and total 2004 expenditure increased by 12 per cent to 836 million.

Interest income is credited to the account.

Other income is forecast to be 55 million in 2005 and 50 million per year for 2006 2007, levels which reflect the fact that interest income is likely to be positively influenced by the changing interest rate environment.

(b) To decide on the treatment of other income adjustments for the period ended 30 June 2004 amounting to 28,284,000 from interest income ( 4,631,000), other miscellaneous income ( 957,000), prior period adjustments ( 10,000) and savings on or cancellation of prior period obligations ( 22,686,000).

a Loss is due to declines in market values of short term investments which more than offset other interest income.

(iv) Interest and miscellaneous income. Interest income arising from the RPTC is credited to the General Fund however, the miscellaneous income relating to the RPTC is credited to the special account.

(c) Interest income in excess of the budgetary estimates

These costs are more than offset by interest income earned on cash balances, which are budgeted under income section 2, General income.

UNENCUMBERED BALANCES OF APPROPRIATIONS, INCOME FROM NEW MEMBER STATES AND INTEREST INCOME IN EXCESS OF BUDGETARY ESTIMATES

(q) Other income

Other resources contributions, net of interest and other income, received in 2004 totalled 3.1 billion, of which 38 per cent 1.2 billion accounted for local resources (46 per cent in 2003).

The disposal of the interest income is governed by agreements with donors.

Other income and adjustments

Interest income credited to the Global Environmental Facility, excluding interest income earned on funds transferred as UNIDO fees, is set aside as accounts payable pending instructions to its return to the trustee

The latter category includes income from sales publications, interest earned on surplus funds and other sundry items for which details are provided in a separate section.

Other items of interest

Other meetings of interest.

The gains in interest income are expected to be offset to a certain extent by the strengthening of the United States dollar compared to other major donor currencies.

However, other low income and middle income developing countries also needed special attention.

Table 2 Other income and adjustments

Current ultra low interest rates may be scaring people about the adequacy of future income.

Interest income attributable to the Montreal Protocol is treated immediately as an additional programmable balance.

Other low income countries should follow suit.

Figure 4. Contribution income other resources, 2004

And the Fund has assisted low income countries with large loans at unprecedented zero interest rates.

By creating more competition for interest income and reducing net interest rate differentials, liberalized interest rates could reduce banks profitability, while SOEs will likely suffer the most, owing to much higher financing costs.

The funding gap for the regular budget would have been 12.1 million if the exchange rate gains and the interest income were excluded from the total income.

UNDP received a total contribution, net of interest and other income, of 4.0 billion in 2004 (including regular resources, other resources and funds), the highest level ever, up by 27 per cent from the 2003 level of 3.2 billion.

Net contributions of 833 million were mobilized in regular resources (exclusive of interest and other income) in 2004, a growth of 9 per cent over the regular resource contributions recorded in 2003.

Income and expenditure by category other donor resources

Higher interest rates can spur consumption if their impact on income outweighs the increased incentive to save.

Interest income arising from UNDP activities is credited to the operating fund account maintained with that organization.

That provides the rationale for the Fed s zero interest rate policy but at the obvious cost of discriminating against savers, who lose any semblance of interest income.

Total income available for programme activity under MSAs in 2004, including interest income, amounted to 92 million, up by 12 per cent compared to 82 million in 2003.

Any income received for these or other miscellaneous items during the biennium will be recorded against other income and reported in the financial performance reports.