International Monetary Fund says trade spat curbing growth

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The global finance agency dropped its projection for world economic growth by two-tenths of a percentage point for both 2018 and 2019 to 3.7 percent, the first time it had trimmed its economic outlook in more than two years.

The IMF expects a 2.9 percent growth outlook on the USA economy, but thinks growth will shrink to 2.5 percent for 2019, attributing to the slowdown to the country's escalating trade war with China.

The projection was raised from 3.8 percent in a forecast released in April, but is still under the government's official target for 4.3 percent growth.

Finance Minister Asad Umar left for Indonesia on Monday night to participate in the annual meetings of the International Monetary Fund and World Bank at Bali, scheduled to run until October 12, and formally request a bailout programme, reports Dawn news. The IMF projections don't take into account Mr Trump's threat to expand the tariffs to effectively all of the more than US$500 billion in goods the U.S. bought from China past year.

"The risks of a slowdown in global growth have increased over the past six months, and the potential for unexpected improvements has decreased", the report said.

As Washington and Beijing trade tariffs, economic growth is slowing for both countries and others.

Pakistani officials on Thursday met the International Monetary Fund (IMF) chief Christine Lagarde in Indonesia and sought IMF's assistance to address the mounting balance of payment crisis faced in the country, an official said. "In this environment, economic growth will likely slow significantly, and inflation will rise", he said in a statement.

Equally, Angola is at the moment contracting by about 0.1 per cent this year, with a projection of almost four per cent in 2019.

Trump renewed his threat to impose tariffs on $267 billion worth of additional Chinese imports if Beijing retaliates further with its own higher levies on USA products entering China.

Global trade is projected to expand by 4.2 percent this year, six tenths less than expected in July and almost a full point lower than the forecast in April.

The number is the same as last year's 3.7 percent growth.

The IMF report said "protectionist rhetoric" was being "increasingly turned into action", warning that such uncertainty "could lead firms to postpone or forgo capital spending, and hence slow down growth in investment and demand".

"In several key economies, moreover, growth is being supported by policies that seem unsustainable over the longer term".

Core inflation, which excludes volatile items such as energy, will vary from country to country, it added.