IMF Chief warns Pakistan against China's involvement in economy

Pakistan       by Usman Arshad | Published

Pakistan by Usman Arshad | Published

The International Monetary Fund forecast Monday that Japan's economy will grow 1.1 percent this year, up 0.1 percentage point from its estimate in July due to the uptick in growth and domestic demand in the April-June quarter.

The IMF expects the U.S. economy to continue growing this year at 2.9%, but sees that rate falling to 2.5% next year amid the country's escalating trade war with China.

Last year, China shipped goods worth $375 billion more to the USA than it took in from the United States, a figure Trump has often said he wants to curb sharply in an effort to promote American businesses. -China tariff war's impact to be felt next year, the Fund cut its 2019 USA growth forecast to 2.5 percent from 2.7 percent previously, while it cut China's 2019 growth forecast to 6.2 percent from 6.4 percent.

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.

These included easing planning restrictions to boost housing supply, improve the quality of transport infrastructure and facilitating the relocation of workers likely to be affected by trade barriers created by Brexit. 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.

When the world´s two biggest economies - the United States and China - are "at odds", that is going to create "a situation where everyone is going to suffer", Obstfeld said.

The fund urged governments to focus on policies that could share the benefits of growth more widely, helping counter the growing mistrust of institutions and avoiding "protectionist reactions to structural change".

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Overall, global growth will remain steady - about 3.7 percent this year - and exceed that of 2012-2016.

The Fund says the global economy's growth target has dropped by 2 percent from the initial 3.9 percent. The benchmark Shanghai Composite Index has already plunged 17.7 per cent this year, making the Chinese equity market the second worst stock market worldwide, only next to the Greek market, which has fallen 18.4 per cent.

"That said, risks could rise sharply, should pressures in emerging-market economies mount or if trade tensions escalate".

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.

USA stimulus also adds to the "already-unsustainable" debt and deficit that will undercut future growth, the report warns. "However, it is projected to rise to 5.1 percent in 2019", the report said.

While the IMF's outlook for the Chinese economy stayed at 6.6% this year, its forecast for next year of 6.2% represents the slowest growth rate the Asian country has seen since 1990.

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