International Monetary Fund raises Israel growth forecast

PM Khan talks to media persons in Lahore. —DawnNewsTV

The Pakistani government has chose to approach the International Monetary Fund (IMF) for a bailout to address the mounting balance of payments crisis faced by the South Asian country, Finance Minister Asad Umar announced on Monday.

The IMF said a new database in its semi-annual Fiscal Monitor report showed considerable net worth in 31 countries that account for 61 percent of global economic output.

The US simultaneously threatened to add tariffs to a further $267 billion (£205 billion) of products, which saw China retaliate with 10 percent tariffs on $60 billion (£46 billion) of US imports.

"The oil market mood is exceptionally bullish, with fears growing that the US demands for an Iran oil embargo could cause a significant supply shortfall", said Julius Baer commodities research analyst Carsten Menke. -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, while it cut China's 2019 growth forecast to 6.2 percent from 6.4 percent.

"An assessment by the State Bank of Pakistan and the finance ministry showed that Pakistan needed $11.7 billion to service its external debt in current fiscal year 2018-19".

As stakeholders look for a categorical position of Khan's administration in going or not going to the IMF for financial assistance or the arrangement of funds from alternative resources, the country's stock market remains in a tight spot due to uncertainty.

"We'll be listening very attentively when and if they come to us", Obstfeld said. It also noted that "while financial market conditions remain accommodative in advanced economies, they could tighten rapidly if, for example, trade tensions and policy uncertainty were to intensify (and) monetary policy is another potential trigger".

In the IMF's most recent World Economic Outlook (WEO), the global financial authority forecast the Philippines's inflation numbers to hit 3 percent in 2023. Previous forecast rate for 2018, announced in July, was 4.2 percent. The S&P 500 index edged 0.1 percent lower to 2,884.43, while the Dow Jones Industrial Average gained 0.2 percent to 26,486.78. Inflation forecast for 2018 was 15 percent and for 2019 16.7 percent.

The IMF said Tuesday it projects continued growth in the United States, but at a slower pace next year.

Russian Federation was among the few energy-rich emerging market countries whose growth forecasts were bumped up.

USA growth this year remained steady at 2.9 percent but is set to slow in 2019 as the effect of Trump's sweeping tax cuts wear off and the trade dispute with China begins to set in.

The new accord could be in place by the end of 2019, Gordon D. Sondland, the U.S. ambassador to the European Union, told press in Brussels last week.

Maurice Obstfeld on Tuesday told the annual meeting of the International Monetary Fund that there were "both benefits and risks" to Pakistan's cooperation with China.

Argentina, which recently agreed an International Monetary Fund bailout, is also predicted to see its economy shrink in 2018 and 2019.

ANALYST'S TAKE: "Renewed tension between the U.S. and China has capped risk sentiment as a range of issues from trade to diplomacy are likely to challenge China-U.S. relationship", Zhu Huani of Mizuho Bank said in a commentary. For next year, trade is seen growing just four percent, a half point less than the prior forecast. The Trump administration has penalized almost half of all imports from China and has threatened more for the other half. It also assumes that Trump imposes a 25 percent tariff on imported cars and auto parts imports.

Beijing has answered with taxes on $110 billion worth of US exports.

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