U.S. to evaluate Pakistan's bailout request on merit

"An IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic programme", she said.

"We need to join hands to fix the current trade system, not destroy it", she added.

In a new simulation exercise to show trade war risks to the global economy, the International Monetary Fund modeled the effect of an all-out US-China trade war, coupled with threatened global US auto tariffs and retaliation from trading partners.

Over the weekend, the PBOC cut bank reserve requirement ratios for a fourth time this year to ease credit conditions and support businesses, including exporters hit by the USA trade war.

Share markets in Asia plunged to a 19-month low on Thursday after Wall Street's worst losses in eight months led to broader risk aversion, partly due to the heated global trade tensions as well as rapidly rising dollar yields.

The two-yearly International Monetary Fund report is one of the most comprehensive reviews it has carried out since the 2008 crash and is a health assessment of the financial system.

Brazil will see a 0.4 percentage-point drop in GDP growth to 1.4% for 2018 as a nationwide truckers strike paralysed much of the economy.

Lagarde told her audience on October 10 that she did not feel overly gloomy about global conditions. "So - last question and then I've got to go", she said.

Prominent U.S. academic Jeffrey Sachs was less diplomatic in his assessment of Trump's shepherding of American trade relationships, slamming the president's repeated claims that deficits with China and other nations meant Americans were being taken advantage of.

But the gyrations that rocked Wall Street the day before and Asia and Europe on Thursday, taking the Shanghai Composite index down 5.2 percent and Japan's Nikkei 225 almost 4 percent, do partly reflect rising interest rates in the US and some other countries and growing uncertainty over trade, she said. "This is the United States trying stop China's growth - it's a awful idea", Sachs, director of the Center for Sustainable Development at Columbia University, told a seminar in Bali.

The exercise assumes that US President Donald Trump imposes tariffs on the remaining $267 billion worth of Chinese goods imports not already under punitive tariffs and China retaliates in kind.

"To really understand the extent and composition of that debt, both in terms of sovereign, in terms of state-owned enterprises and the likes of it, so that we can actually really appreciate and determine the debt sustainability of that country, if and when we consider a programme, Lagarde said".

That would include boosting foreign currency reserves that could be used in a crisis, as well as working with local bond markets to build a local investor base, rather than relying on financing from overseas.

Imran Khan said the construction industry was one of the most important sectors of the economy as over 40 other industries were related to it and added it was vital for reviving economic activity and employment generation.

Despite the Federal Reserve's interest rate increases, financial conditions "have eased further" in the U.S.as equity valuations have stayed lofty.

In China, the situation remains "broadly stable", although corporate debt is above historical levels and household borrowing is at the high end among emerging countries.