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International Monetary Fund cuts global growth forecasts

10 Octobre 2018

At its annual meeting in Bali it downgraded its prediction to 3.7% from 3.9% in July. It was the first downgrade since July 2016.

The UK economy is expected to expand by 1.4% this year and 1.5% in 2019.

The fund left its 2018 USA forecast unchanged but cut its expectation for next year, citing the impact of the trade conflict. However, the road to formal approval and disbursement of International Monetary Fund support was both bumpy and protracted because of the possible delay in negotiations and agreement on further policy action.

The International Monetary Fund has warned a trade war between the United States and China risks making the world a "poorer and more unsafe place" in its latest assessment of the global economy.

PM Imran said he wanted to provide relief to citizens and will steer the country clear of the impending financial disaster.

Maurice Obstfeld, the IMF's chief economist, said at a media briefing about the fund's latest World Economic Outlook: "When you have the world's two largest economies at odds, that's a situation where everyone suffers". "Several of the downside risks highlighted in the April 2018 World Economic Outlook (WEO) ... have become more pronounced or have partially materialized".

The Philippines' 6.5 percent 2018 projection is the second highest growth estimate in the trade bloc after Vietnam's 6.6 percent.

The Nikkei closed down 1.32 per cent this morning at 23,469.39.

That has also increased fears that the terms of any International Monetary Fund programme could be more restrictive than in the past, undercutting Khan's welfare drive.

President Trump has slapped tariffs on US$250 billion in Chinese goods this year, and Beijing has retaliated with levies on US$110 billion of American products.

The IMF chief economist said that while government officials have been moving to rein in China's credit expansion, it was understandable they would take steps to boost growth in the face of trade tensions with the USA, and these have impacted short-term economic growth, affecting the yuan.

The cut its 2019 USA growth forecast to 2.5 percent from 2.7 percent previously, while it reduced China's 2019 growth forecast to 6.2 percent from 6.4 percent.

French growth would shrink by a similar degree, it said, while the U.S. itself would suffer a 0.4 point drop.

The IMF maintained a previous forecast for growth of 6.6 percent for 2018.

China is trying to move away from its long-time reliance on heavy industry and manufactured exports towards a growth model based more on domestic consumption by its increasingly wealthy populace.

It said, the prediction is lower due to recent increase in oil prices and the tightening of global financial conditions.

United Kingdom growth has been drastically cut in the aftermath of the Brexit vote; uncertainties surrounding the country's divorce from the European Union have stymied investment and seen part of its key financial sector relocate to the continent.

But the BSP, after the 6.7-percent inflation rate in September was announced last Friday (October 5), said inflation may have actually peaked during that month and is expected to decelerate in 2019 and 2020 in the absence of further shocks.

International Monetary Fund cuts global growth forecasts