Economy

International Monetary Fund chief to US, China: De-escalate trade dispute, fix trade rules

International Monetary Fund chief to US, China: De-escalate trade dispute, fix trade rules”

In its report the International Monetary Fund said the tit-for-tat tariffs imposed by the USA and China, weaker performances by eurozone countries, Japan and Britain all conspired to increase pressure on the global economy, while "the possible failure of Brexit negotiations poses another risk".

Eric LeCompte, a financial expert and executive director of Jubilee USA said: "We are seeing growing debt crises in many developing economies, at the same time, we see risky and speculative behaviour on the raise".

In an statement, IMF Managing Director Christine Lagarde said she met on October 11 with Pakistani Finance Minister Asad Umar and the governor of the country's central bank, Tariq Bajwa, on the sidelines of a conference in Bali, Indonesia.

While noting the fact that the President Muhammadu Buhari-led administration has visibly prioritised non-oil revenue drive, International Monetary Fund said certainly, increase in revenues was the way which a country creates the space to do social spending, infrastructure and other spending that benefit economic growth.

Despite the Federal Reserve's interest rate increases, financial conditions "have eased further" in the U.S.as equity valuations have stayed lofty.

The risk of a global financial crisis initiated by sharp capital outflows in emerging markets due to the divergence of monetary policies in the U.S. and developing countries remains small but will grow as the Federal Reserve continues to raise its interest rates, as it is expected to do this year and next.

"The government has chose to do both", he said while addressing a ceremony to launch Naya Pakistan Housing Programme, a flagship project of his government to build 5 million houses in five years for low income people. "We look forward to our continuing partnership".

The spokesperson was responding to a question on the request made by Pakistan for a $8 billion bailout package. It left 2018 growth forecasts for the two countries unchanged at 2.9 percent for the USA and 6.6 percent for China.

"I'm assuming that there might be a program request on their part, but that has not been discussed and we will explore that this afternoon", she said.

A Pakistani minister told Reuters in Islamabad on Wednesday that the government was considering options, including the possible restructuring of some foreign loans. "So, we will be listening very, very attentively when and if they come to us".

She declined to comment on the recent market rout, but said USA equities and overall stock prices "in general have been extremely high".

"Unless we restructure the debt the burden will mount".

For weeks analysts have warned that a new current account crisis could undermine Pakistan's currency and its ability to repay billions in debts or purchase imports.

Azhar said Chinese projects should proceed as planned as the government views the infrastructure was vital to stimulating growth.

Critics have raised concern about opaque nature of some of the deals, saying they have left Pakistan with liabilities that could saddle it with de facto off-books debt.



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