Business, Pakistan to seek International Monetary Fund loan to avert meltdown

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"India's growth is expected to increase to 7.3per cent in 2018 and to 7.4per cent in 2019 (slightly lower than in the April 2018 World Economic Outlook [WEO] for 2019, given the recent increase in oil prices and the tightening of global financial conditions), up from 6.7per cent in 2017", the International Monetary Fund said in its latest World Economic Outlook report.

US President Donald Trump recently sanctioned tariffs on an additional Dollars 200 billion worth of Chinese goods, nearly 15 per cent of China's total exports to the US.

"Uncertainty over trade policy is prominent in the wake of USA actions (or threatened actions) on several fronts, the responses by its trading partners, and a general weakening of multilateral consultation on trade issues", the report said.

ANALYST'S TAKE: The IMF report "should in no way surprise" as the fund's managing director Christine Lagarde warned that trade disputes were weighing on global growth last week, said Chris Weston of Pepperstone Group Limited.

"We certainly hope we don't move in either direction of a trade war or a currency war".

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Rising trade tensions are a key challenge to the world economy as "protectionist rhetoric increasingly turned into action".

In the fund's latest Global Economic Outlook, it estimated that the South African economy would grow by 0.8% this year, down from its initial projection of 1.5% in April. It left 2018 growth forecasts for the two countries unchanged at 2.9 per cent for the United States and 6.6 per cent for China.

According to the report, the Greek economy is expected to grow by 2% this year and by 2.4% in 2019.

Growth of less than five percent would be unprecedented for China since it began its economic reforms in the 1970s, and complicate its efforts to move towards a more balanced economy with a greater role for services.

Maurice Obstfeld, the IMF's economic counsellor, said at a press conference in Bali, Indonesia, after the report was released, admitted the April forecast was "overoptimistic" and that growth was "less balanced than we hoped".

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However, the Fund is revising its global growth forecast, which is now downgrading from 3.9% to 3.7% for the period 2018-2019.

It said interest rates could go up quickly depending on events in the US.

The IMF said: "The possible failure of Brexit negotiations poses another risk".

Downgrades to global growth also reflected predictions of a slower expansion in the eurozone as well as turbulence in a number of emerging market economies.

"It would also make tradable consumer goods less affordable, harming low-income households disproportionately".

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Maurice Obstfeld, the IMF Economic Counsellor, warned against the rising tide of protectionism, saying that without multilateralism "the world will be a poorer and more unsafe place".