IMF cuts forecast for global growth as trade war takes toll

IMF cuts world economic growth forecasts as import tariffs emerging market issues bite

People walk past a mural on a bank showing symbols for American Chinese and other world currencies in Beijing

Asian markets are mostly lower after the International Monetary Fund downgraded its economic outlook, citing rising interest rates and mounting tensions over trade.

The Pakistani government has also told Beijing it wants to reconsider some of the projects it signed up to under the US$62 billion China-Pakistan Economic Corridor. "They also have a low level of reserves and a currency that is too rigid and overvalued", he added.

This is the country's fifth currency devaluation since December a year ago.

"China and a number of Asian economies are also projected to experience somewhat weaker growth in 2019 in the aftermath of the recently announced trade measures", it said. "For an economy that has become addicted to foreign loans and bailouts, the future is very much like the past", said Uzair Younus, a South Asia director at Washington-based consultancy Albright Stonebridge Group LLC.

Emerging Asia continued to register strong growth, supported by a domestic demand-led pickup in the Indian economy from a four-year-low pace of expansion in 2017, even as activity in China moderated in the second quarter in response to regulatory tightening of the property sector and non-bank financial intermediation, it said.

The government has deep problems to fix.

The Washington-based institution had predicted a 2019 growth rate of 1.5 percent for Russian Federation in its last update in July.

China's involvement in Pakistan's economy could bring both benefits and risks, Maurice Obstfeld said.

Pixel 3 XL On Sale In Hong Kong Ahead Of Launch
The round keys also match the icons on the Slate's screen, with Android apps alongside Chrome OS software. There is no information on the exact size of the screen and resolution of the Pixel Slate .

Senior Pakistan Tehreek-i-Insaf (PTI) leader Ali Zaidi said that the jump in the exchange rate would "affect everyone, even us ministers".

Sources in the finance ministry said the government explored all options including asking friendly countries for support as well as seeking donations from overseas Pakistanis before going to the International Monetary Fund. "That is a very good sign going forward". The last time was in 2013, when Islamabad got a $6.6 billion loan to tackle a similar crisis.

In this regard the finance minister shall hold meetings with the top leadership of IMF during the annual meetings of World Bank/IMF at Bali later this week, the statement concluded.

According to experts, such inclination in the USA dollar rate against Pakistani rupee is an impact of government's decision to approach the International Monetary Fund (IMF) in order to handle the financial crisis that Pakistan is facing.

According to official announcement made by the Ministry of Finance on Monday stated that immediately upon assuming office, the present government had expressed serious concerns over the dire economic situation of the country and had committed to undertake a quick evaluation of all possible options.

"We will have to swallow this bitter pill", Pakistan's Maritime Affairs Minister Syed Ali Haider Zaidi told Bloomberg in Karachi on Tuesday.

This story has been published from a wire agency feed without modifications to the text.

Latest News