International Monetary Fund downgrades outlook for world economy to 3.7% growth

Finance Minister Asad Umar says decision is taken after consulting leading economists

Finance Minister Asad Umar says decision is taken after consulting leading economists

Besides, the Azerbaijani government expects the growth of the country's GDP at the level of 2 percent for this year, 3.19 percent for 2019, and 3.5 percent for 2020. The gradual hikes by the US Federal Reserve has magnified fissures in vulnerable emerging market economies affecting countries like Argentina and Turkey, already grappling with existing economic woes. The fund expects United States economic expansion to peak at 2.9 per cent this year and start to slow down next year as the economic stimulus introduced in the wake of the 2008 global credit crisis begins to wind down and tariff impact begins to hurt. Threats include a further inflaming of the trade war between the U.S. and countries including China, and a sharper-than-expected rise in interest rates, which would accelerate capital flight from emerging markets.

"There are clouds on the horizon", he said.

"We have not been formally approached yet", said Maurice Obstfeld, the IMF's top economist, during the fund's annual meeting in Bali. The IMF also reduced its growth forecast for China next year to 6.2 percent because of the trade war, down from 6.4 percent in April.

The new forecasts, released on the Indonesian resort island of Bali where the International Monetary Fund and World Bank annual meetings are getting underway, show that a burst of strong growth, fueled partly by USA tax cuts and rising demand for imports, was starting to wane. Many business leaders welcomed the agreement as an encouraging sign that the Trump administration doesn't entirely want to blow up the global trading system that has come together in the past three decades.

And it stressed "cooperative solutions" to help boost continued growth in trade "remain essential to preserve and extend the global expansion".

Umar told Bloomberg in August that the government may need more than US$12 billion (RM50 billion).

Her statements indicated that Pakistan could be forced to disclose the full extent and terms of Chinese lending it received in recent years as part of its participation in the Belt and Road Initiative, China's vast global infrastructure-spending programme.

The IMF's cut to its outlook was broad-based. But it predicts that US growth will slow to 2.5 per cent next year as the effect of recent tax cuts wears off and as US President Donald Trump's trade war with China takes a toll.

The euro area will expand 2 per cent this year, down 0.2 point from July, as a result of weaker-than-expected growth in the first half of the year. These assets are larger than its liabilities, putting net worth - the difference between assets and liabilities - well above 100 per cent of the GDP, the highest among emerging economies, he said.

He called on countries to ensure inclusive growth, which he said was "more important than ever".

It predicted 2.9 percent US growth this year, dropping to 2.5 percent next year, and to 1.8 percent in 2020, as the effect of USA tax cuts wears off and the trade war with China inhibits growth.

But China's involvement could also bring potential risks, he said.

India's debt is lower than the best or emerging market economies in the world, a top International Monetary Fund official has said as he cautioned that the global debt has reached a new record high of $182 trillion in 2017.

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