Business, Pakistan to seek International Monetary Fund loan to avert meltdown

Business, Pakistan to seek International Monetary Fund loan to avert meltdown

The IMF also revised down its growth forecast for the country for next year to 2.6 percent, down 0.3 percentage point from its earlier estimate. "The short answer is no", Odd Per Brekk, deputy director of the IMF's Asia and Pacific department, told a news conference during the Fund's and World Bank's annual meeting in the Indonesian resort island of Bali.

The fund shaved 0.1 percentage point from America's expected GDP this year and 0.4 percentage points from growth through 2019. Bond markets were closed, leading US indexes to a mixed finish after a day of light trading.

In its suggestions to boost growth, the International Monetary Fund said the United Kingdom should look at easing planning restrictions to boost housing supply, improve the quality of transport infrastructure, and facilitate the relocation of workers in industries that are likely to be more affected by higher trade barriers after Brexit. Maurice Obstfeld, the IMF's Chief Economist, noted that trade policy reflects politics and politics remain unsettled in several countries, posing further risks.

"The possibility that China and US resolve their disagreements would be a significant upside to the forecast", Obstfeld said.

The eurozone's 2018 growth forecast was cut to 2.0 per cent from 2.2 per cent previously, with Germany particularly hard hit by a drop in manufacturing orders and trade volumes.

Khan's decision came after the Pakistani stock markets tumbled by 3.4 per cent on Monday after Khan said the day before that he was still exploring options outside the International Monetary Fund.

"But there is no denying that the susceptibility to large global shocks has risen", Obstfeld said.

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The IMF said, "The growth forecast for 2018 is 0.3 percentage point lower than the April 2018 WEO forecast".

The IMF only published country forecasts through 2019.

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It also said inflation in India is on the rise, estimated at 3.6per cent in fiscal year 2017/18 and projected at 4.7per cent in fiscal year 2018/19, compared with 4.5 per cent in fiscal year 2016/17, amid accelerating demand and rising fuel prices.

The slowdown has been caused predominantly by the world's two largest economies - the U.S. and China - engaging an increasingly damaging trade war.

China's yuan currency has faced strong selling pressure this year, losing more than 8 per cent between March and August at the height of market worries, though it has since pared losses as the authorities stepped up support. It also assumes that Trump imposes a 25 per cent tariff on imported cars and auto parts imports.

USA tariffs on China, and more broadly on auto and auto part imports, may disrupt established supply chains, especially if met by retaliation, it added.

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