International Monetary Fund says not approached by Pakistan for financial assistance

Daniel Fowler
October 10, 2018

The South Asia nation's key stock measure snapped six days of losses to advance as much as 3%, the most in more than four months, before paring some gains, while its dollar-denominated bonds maturing in 2027 climbed the most since July 26.

"Although the International Monetary Fund forecast is lower than Government projections, it has observed that there is something happening", said an analyst with a local research firm.

But the United States tax cuts and rising spending that have boosted growth, helping compensate for the impact of the growing trade conflict, could spark a sudden "inflation surprise", and in turn lead to faster-than-expected rise in United States interest rates, according to the fund.

"There are clouds on the horizon". "Not only have some downside risks we identified in the last WEO been realized, the likelihood of further negative shocks to our growth forecast has risen".

Before his departure for Bali, Indonesia, for attending the annual meeting of IMF/WB from Oct 8 to 14, Federal Minister for Finance Asad Umar announced the government's decision for approaching the IMF for getting the 22nd programme of the Fund.

The Pakistani rupee on Tuesday was unofficially devalued by 7 per cent plunging to all-time low of 35.67 against the UAE dirham.

The IMF's cut to its outlook was broad-based.

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And that would have the side benefit of avoiding more than 100 million premature deaths through this century, the report said . Those cities will need more support to develop cleanly, prevent disasters and adapt to climate shifts, he added.

The IMF expects the US economy to grow 2.9 percent this year, the fastest pace since 2005 and unchanged from the July forecast. China's economy grew 6.9 per cent in 2017.

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In this worst case scenario, the USA economy would take a significant hit, while economic growth in China would drop below 5% in 2019, compared with a current prediction of 6.2%. However, it has considerably reduced its economic growth forecast for 2023 to 1.2 percent, from 1.9 percent in its previous report.

International Monetary Fund cuts 2018 #GDP growth forecast to 3.7% (from 3.9%) on #Tradewar!

It found that global GDP output under this scenario would fall by more than 0.8 percent in 2020 and remain roughly 0.4 percent lower in the long-term compared to levels without these effects, which "inflict significant costs to the global economy, especially through its impact on confidence and financial conditions". Core inflation, which excludes volatile items such as energy, will vary from country to country, it said. But it predicts that US growth will slow to 2.5 percent next year as the effect of recent tax cuts wears off and as President Donald Trump's trade war with China takes a toll.

The IMF said its forecast for investment growth for FY19 is weaker than in April, despite higher capital spending in India, on account of contracting investment in economies under stress, such as Argentina and Turkey, which is also reflected in a downward revision for import growth.

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