Pakistan seeks largest loan package from International Monetary Fund

Andrew Cummings
October 11, 2018

The country returned to a growth rate of 1.5 percent in 2017 after two years of decline.

India hopes to secure a waiver from USA sanctions on Iran before they take effect on November 4, as it had significantly cut Iranian oil imports before the deadline, officials said on Monday...

The IMF said higher trade barriers could disrupt global supply chains, slow the spread of technology and ultimately lower global productivity and welfare.

But in its latest World Economic Outlook, the International Monetary Fund cut its global economic growth forecasts for 2018 and 2019, saying trade policy tensions and the imposition of import tariffs are taking a toll on commerce while emerging markets struggle with tighter financial conditions and capital outflows.

"India's growth is expected to increase to 7.3 per cent in 2018 and to 7.4 per cent in 2019 (slightly lower than in the April 2018 World Economic Outlook (WEO) for 2019, given the recent increase in oil prices and the tightening of global financial conditions), up from 6.7 per cent in 2017", the International Monetary Fund said in its latest World Economic Outlook report.


The IMF expects the U.S. economy to grow 2.9 per cent this year, the fastest pace since 2005 and unchanged from the July forecast.

Since the last stability report in April, global economic conditions have become less balanced, with a more pronounced divergence between advanced and emerging economies.

The IMF, in its twice annual assessment of global financial stability, said conditions remain broadly conducive to economic growth, but are at risk of worsening should emerging markets deteriorate further or trade tensions escalate.

The IMF issues the report ahead of the Annual IMF and World Bank meetings where world leaders, finance ministers and nongovernmental organizations will gather this week in Bali, Indonesia.

Growth in the 19-nation zone is forecast to slow further to 1.9 percent in 2019, unchanged from the July estimate.


"The central bank has given an indication to let the rupee go with market forces", said one broker.

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

On Monday, it downgraded world growth forecasts for next year, blaming new trade barriers. "There is an appetite to improve and expand trade", she said, citing the TPP-11 - a revised Trans-Pacific Partnership after the US pullout - and progress on the US-Mexico-Canada deal.

Global economic expansion remains strong, but the trade war could potentially shock investor confidence, with "significant adverse consequences" for global macroeconomic activity, Tobias Adrian, IMF monetary and capital markets department director, told reporters. In September, Trump imposed tariffs on almost $200 billion of Chinese imports, with China responding with higher tariffs on about $60 billion of US imports.


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