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

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

IMF's forecast for Singapore's economic outlook remains steady at 2.9% for 2018, but has been revised downward by 0.2 percentage points to 2.5% for the following year.

The US simultaneously threatened to add tariffs to a further $267 billion (£205 billion) of products, which saw China retaliate with 10 percent tariffs on $60 billion (£46 billion) of US imports. "As the government is expecting inflows from friendly countries, Saudi Arabia and China, and inflow of investment in the CPEC project, the country may achieve 5 percent growth rate", Dr. Bilal Ahmed, an economic analyst, said. The reserve requirement ratio (RRR) was cut by a full percentage point, effective Octover 15, injecting a net 750 billion yuan (US$109.2 billion) in cash into the banking system.

The IMF chief economist said emerging economies were coping better than the developed ones, but their susceptibility to large global shocks has risen.

The benchmark USA 10-year Treasury yield climbed to its highest since May 2011 on Tuesday. It added that downside risks detailed in the April WEO "have become more pronounced or have partially materialized" such as trade barriers and reversal of capital flows to emerging market economies with weaker fundamentals and higher political risk.

It is also lower than the IMF's 4.9-percent average forecast for 2018 and 4 percent for 2019.

Maurice Obstfeld said the International Monetary Fund does not see a generalised pullback from emerging markets, nor contagion that will spill over to those emerging economies which have stronger economies and have thus far avoided major outflows, such as those in Asia and some oil exporting countries.

Russian Federation was among the few energy-rich emerging market countries whose growth forecasts were bumped up.

"Considerable progress was made in Russian Federation in recent years to shore up financial stability, including by closing weak banks, introducing reforms to the resolution framework, enacting measures to reduce dollarization, and increasing the risk weights of unsecured consumer and mortgage loans", the International Monetary Fund said.

Trade tensions are expected to continue although Fund officials view U.S. -Mexico-Canada trade agreement as a positive sign. "We see the future of industry as being bleak as investors are trying hard to sustain growth momentum", Syed Mazhar Ali Nasir, senior vice president of the Pakistan Chambers of Commerce and Industry, told Arab News.

He said the talks would be held for "such a programme, a stabilisation, a recovery programme, on which basis we could overcome this financial crisis". China was the fastest-growing economy in 2017. The contract lost 0.1 percent to settle at $74.29 per barrel in NY.

China was set to grow by 6.2 in 2019, down from the 6.4 percent projected last July.

Trump renewed his threat to impose tariffs on $267 billion worth of additional Chinese imports if Beijing retaliates further with its own higher levies on USA products entering China.

It also assumes that Trump imposes a 25% tariff on imported cars and auto parts imports.

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