International Monetary Fund raises Japan growth forecast, cuts global estimate due to trade tension

11 October, 2018, 10:04 | Author: Brooke Harris
  • Finance Minister Asad Minister briefed Prime Minister Imran Khan on the potential bailout package

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.

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".

This acceleration reflected a rebound from transitory shocks (demonetisation and implementation of the GST), with strengthening investment and robust private consumption, it said.

IMF's forecasts for Hong Kong's economic outlook are mixed: it raises its forecast for 2018 by 0.2 percentage points to 3.8%, while cutting its forecast for 2019 by 0.3 percentage points to 2.9%.

In a report released on Tuesday, the International Monetary Fund estimated that despite positive policy tailwinds in the USA economy resulting from things like tax reform, growth will be less than previously expected next year, as a result of the trade war.

Last month, the Swiss government, raised its GDP forecast for 2018 to 2.9% from 2.4% and, earlier this year, it was announced that Swiss exports had matched and surpassed their recent growth.

The 2018 half year revenue performance report of the Federal Inland Revenue Service (FIRS) shows that tax revenue improved by 42 per cent.

The downgrade reflects a confluence of factors, including the introduction of import tariffs between the United States and China, weaker performances by euro zone countries, Japan and Britain.

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It kept the 7.3 per cent growth projection for this year made in July.

India hopes to secure a waiver from USA sanctions on Iran before they take effect on November 4, as it had significantly cut Iranian oil imports before the deadline, officials said on Monday...

"To correct the underlying imbalances, fiscal and monetary actions needed to be undertaken without delay", the Finance Ministry said.

Again, the challenges that have confronted three major economies in Africa that is; Nigeria, South Africa and Angola, have impacted the region's growth which has also affected overall global growth.

For India the International Monetary Fund recommended "reform priorities include reviving bank credit and enhancing the efficiency of credit provision by accelerating the cleanup of bank and corporate balance sheets and improving the governance of public sector banks".

"However, it is projected to rise to 5.1 percent in 2019", the report said.

The IMF said the RRR cut, together with other easing and stimulus policies, "may help support economic growth in the near term in the face of rising external pressures.(but) may entail greater risks to financial stability over the medium term should they set back progress toward reducing financial vulnerabilities".

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