Pakistani Finance Minister off to Indonesia for World Bank, IMF meet

Marco Green
October 12, 2018

In its latest World Economic Outlook, released on Tuesday, the International Monetary Fund predicted global growth to expand by 3.7% in 2018, 0.2 percentage points lower than its forecast in July causing the FTSE 100 to fall to a six-month low, dropping 0.5% to 7,198 points.

"Notwithstanding the present demand momentum, we have downgraded our 2019 U.S. growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation".

Trump has led the escalating trade war because of what he believes are bad policies he said have created an $800 billion US trade deficit.

United States growth this year remained steady at 2.9 percent but is set to slow in 2019 as the effect of Trump's sweeping tax cuts wear off and the trade dispute with China begins to set in.

Director of Fiscal Affairs Department, said India's debt was substantially less than the global debt as percentage of world Gross Domestic Product (GDP).

Global growth is expected to remain steady at 3.7 per cent in 2020, as the decline in advanced economy growth with the unwinding of the USA fiscal stimulus and the fading of the favorable spillovers from U.S. demand to trading partners is offset by a pickup in emerging market and developing economy growth.

Still, the trade disputes sparked by President Donald Trump that have led to tit-for-tat exchanges of tariffs among major trading partners are affecting China, other Asian economies and more vulnerable countries like Argentina and Turkey, along with Brazil.

Yi, in a closed door meeting on Thursday with investment officials, explained that China's monetary policy was on an opposite rate cycle to that of the United States, which is tightening monetary policy due to a strong economy, two people who attended the meeting said.

The report also takes stock of global regulatory reform 10 years after the global financial crisis.

It said the dispute between the USA and China would especially leave developing economies vulnerable to sudden stresses.

The fund urged governments to focus on policies that can share the benefits of growth more widely, helping counter the growing mistrust of institutions, and to avoid "protectionist reactions to structural change".

The report analysed China's public balance sheet and found that its general government net financial worth has deteriorated in recent years to about 8 per cent of GDP, largely because of subnational borrowing and underperforming public corporations.

The new forecasts, released on the Indonesian resort island of Bali where the International Monetary Fund and World Bank annual meetings are getting underway, show that a burst of strong growth, fueled partly by USA tax cuts and rising demand for imports, was starting to wane.

Financial Tensions It said after years of an extremely supportive financial environment, the global economy remains vulnerable to a sudden tightening of financial conditions.

Some energy-rich emerging market countries have fared better due to higher oil prices, with Saudi Arabia and Russian Federation seeing forecast upgrades.

In Nigeria, he said inflation rate is projected to drop to about 12.4 per cent in 2018, from 16.5 per cent in 2017, before rising to 13.5 per cent in 2019.

Other reports by Click Lancashire

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