International Monetary Fund cuts global economic growth target to 3.7%

Pakistan to seek IMF bailout to overcome financial crisis

Pakistan to seek IMF bailout to overcome financial crisis

They show that a burst of strong growth, fueled partly by USA tax cuts and rising demand for imports, was starting to wane.

The IMF's latest report on world financial stability, released Wednesday, said global growth could be at risk if emerging markets deteriorate further or trade tensions escalate.

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

Among emerging market and developing economies, the growth prospects of many energy exporters have been lifted by higher oil prices, but growth was revised down for Argentina, Brazil, Iran, and Turkey.

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".

After a visit last week, the International Monetary Fund said Pakistan was facing significant economic challenges, with diminishing growth, high budget and current-account deficits, and low foreign-exchange reserves.

The body now expects the US economy to grow at a rate of 2.5 percent in 2019, a 0.2 percentage point decline from its April estimates. Rupee rates to the dollar were Rs98.81, Rs101.78, Rs104.84 and Rs104.85 on 30th of June of 2014, 2015, 2016 and 2017 respectively.

"New vulnerabilities have emerged and the resilience of the global financial system has yet to be tested", it said in the twice-yearly Global Financial Stability Report.

Mainland China and Hong Kong stock markets fell sharply on Thursday after a rout in United States shares overnight caused by factors including anxiety about global trade tensions.

On Monday, it downgraded world growth forecasts for next year, blaming new trade barriers.

But growing trade tensions have also come at a time when emerging markets have been put under pressure, the International Monetary Fund noted.

The rapid build-up in debt in China in recent years also is a concern, although Chinese authorities have taken steps to rein in debt growth, he said.

"We continue to closely monitor developments in the yuan; we remain concerned about the recent depreciation of the yuan", said the official, who spoke on condition of anonymity.

"We are all deeply concerned about this news and the potential impact on the business". "I don't think it will go up to Rs150, the government won't allow the economy to spin out of control", he added.

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.

The Briton Woode institution is also projecting growth of 1.9 and 0.8 percent for Nigeria and South Africa while it is predicting contraction of 0.1 percent for Angola.

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