IMF warns trade friction, market turmoil to hurt Asian growth

Marcus Newton
October 13, 2018

In its World Economic Outlook report released in July 2018, the Bretton Wood Institution had projected that Nigeria's economy would grow by 2.1% in 2018 and 2.3% in 2019.

The IMF said the balance of risks was now tilted to the downside, with a higher likelihood that financial conditions will tighten further as interest rates normalize, hurting emerging markets further at a time when US-led demand growth will start to slow as some tax cuts expire.

China has responded in kind with its own barrage of levies, rattling nerves especially among other Asian economies and already vulnerable countries like Argentina, Turkey and Brazil. "Trade policy reflects politics, and politics remain unsettled in several countries, posing further risks", he added.

It's not just the world's two most powerful economies that stand to be affected by trade policy.

Growth estimates for the eurozone and Britain were also revised down, with the report saying that growth "may have peaked in some major economies".

"Owing to these changes, our global growth projections for both this year and next are downgraded to 3.7 per cent, 0.2 percentage point below our last assessments and the same rate achieved in 2017", the report said.

Umar said he will hold talks with International Monetary Fund officials later this month.

China will achieve its growth target this year, and debt levels in the economy have stabilized, People's Bank of China (PBOC) Governor Yi Gang said in an exclusive interview with Caixin. Obstfeld, who retires from the Fund later this year, said there were bright spots with some Latin American and African nations getting growth forecast upgrades.

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Rebuilding Fiscal Buffers It noted that public debt has increased in emerging markets over the past decade, and is projected to increase further in numerous largest economies over the next five years.

"We are concerned about the downturn in economic growth", noted Jubilee USA Executive Director Eric LeCompte.

One of the most comprehensive studies of the state of banking and markets since the financial crisis warns that "dangerous undercurrents" are a rising threat to the world economy.

"But, first we will try to get assistance from other countries as we have requested three countries to deposit money in Pakistan's State Bank that would help boost national reserves", he said, without offering details or taking any name on the matter.

"Overall, compared with six months ago, projected 2018-2019 growth in advanced economies is 0.1 percentage point lower, including downgrades for the euro area, the United Kingdom, and Korea".

On the global ratings, International Monetary Fund cut its global growth forecasts as a result of the trade tensions between the US and trading partners.

The IMF warned of a permanent hit to growth if the US goes ahead with a threat to impose a 25 percent tariff on all imported cars.

Other reports by MaliBehiribAe

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