International Monetary Fund and Pakistan Officials Scheduled to Meet Today to Seek Bailout

Alicia Cross
October 13, 2018

In the World Economic Outlook report released in July, the Bretton Wood institution had projected that Nigeria's economy would grow by 2.1 percent in 2018 and 2.3 percent in 2019.

"Owing to these changes, our worldwide growth projections for both this year and next are downgraded to 3.7 per cent, 0.2 percentage point below our last assessments and the same rate achieved in 2017", the report said.

The ongoing trade war between the USA and China could start having material effects on the economies of both countries within the coming years, according to new projections from the International Monetary Fund (IMF). The IMF has, therefore, not changed its estimate for the US' growth in 2018 keeping it as is at 2.9%.

The trade confrontation weighs on China in particular, where growth is projected to slow to 6.6 per cent this year and 6.2 per cent in 2019, a downgrade of 0.2 points.

"The challenge for the current government is to ensure that fundamental economic structural reforms are carried out to ensure that this spiral of being in an International Monetary Fund program every few years is broken once and for all".

He stated, "Nigeria's growth, 1.9 per cent this year; 2.3 next year".

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"It's tempting to be a bit depressed about this perspective but I'm actually hopeful because there is a clear appetite to improve and expand trade", she said.

"A further escalation of trade tensions, as well as rising geopolitical risks and policy uncertainty in major economies, could lead to a sudden deterioration in risk sentiment, triggering a broad-based correction in global capital markets and a sharp tightening of global financial conditions", the International Monetary Fund said.

The IMF warned that China's growth even risked declining by a full percentage point by next year in the event of a "worse-case" scenario, involving further tariffs coupled with a collapse in confidence by businesses and markets.

Speaking to journalists in Bali, the Deputy Director, Research, IMF, Gian Maria Milesi-Ferretti, said the largest economies on the continent were holding down economic development in Africa as a result of poor growth rate. The Fund's analysts point out that the steady recovery, which has been occurring since mid-2016, continues, while the growth of the world economy for 2018-2019 is projected to remain at the 2017 level. On the other hand, economic growth in China will drop below five percent in 2019 compared with a current prediction of 6.2 percent.

"Many emerging economies are managing relatively well, given the common tightening they face, using established monetary frameworks based on exchange rate flexibility".

United Kingdom growth has been drastically cut in the aftermath of the Brexit vote; uncertainties surrounding the country's divorce from the European Union have stymied investment and seen part of its key financial sector relocate to the continent.

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