Pakistan To Open Talks With IMF For Emergency Financial Assistance

Pompeo has openly expressed his reservations about bailing out a former non-NATO ally

Pompeo has openly expressed his reservations about bailing out a former non-NATO ally

It's so concerned about the potential for a bad deal it has downgraded global economic growth to 3.7% for both 2018 and 2019, in its latest World Economic Outlook.

Maurice Obstfeld, the IMF Economic Counsellor, warned against the rising tide of protectionism, saying that without multilateralism "the world will be a poorer and more risky place".

China was set to grow by 6.2 in 2019, down from the 6.4 percent projected last July.

Instead it now looks like it is going to have to rein in spending and increase taxes.

"Nigeria's growth, 1.9 percent this year; 2.3 next year".

The US growth forecast for 2019 is down from 2.7% to 2.5%.

The report warned that growth "may have peaked in some major economies".

Maurice Obstfeld said the International Monetary Fund does not see a generalised pullback from emerging markets, nor contagion that will spill over to those emerging economies which have stronger economies and have thus far avoided major outflows, such as those in Asia and some oil exporting countries.

The government inherited 6.6 percent of fiscal deficit, more than a trillion rupees of unaccounted for losses in the energy sector and an unprecedented and debilitating current account deficit running at $2 billion a month.

And it stressed "cooperative solutions" to help boost continued growth in trade "remain essential to preserve and extend the global expansion".

The UK economy, meanwhile, is expected to grow 1.4 percent this year and 1.5 percent in 2019 - falling behind nearly all of Europe, with the exception of heavily-indebted Italy.

The euro zone's 2018 growth forecast was cut to 2% from 2.2% previously, with Germany particularly hard hit by a drop in manufacturing orders and trade volumes.

Threats include a further inflaming of the trade war between the U.S and countries including China, and a sharper-than-expected rise in interest rates, which would accelerate capital flight from emerging markets.

Pressure on the lira saw inflation rates soar to almost 25 percent in September, marking the highest levels since President Erdogan came to power 15 years ago.

In a report released on Tuesday, the International Monetary Fund estimated that despite positive policy tailwinds in the US economy resulting from things like tax reform, growth will be less than previously expected next year, as a result of the trade war.

However, stimulus measures by Beijing are likely to soften the impact of the tariffs.

"In the United States, momentum is still strong as fiscal stimulus continues to increase, but the forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of USA imports from China", IMF report said.

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