IMF team to visit Pakistan after request for bailout loans

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

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

The IMF expects a 2.9 percent growth outlook on the U.S. economy, but thinks growth will shrink to 2.5 percent for 2019, attributing to the slowdown to the country's escalating trade war with China.

China's growth is still expected to be more than 6% next year, but the IMF's chief economist Maurice Obstfeld warned Beijing to concentrate on quality and sustainability of growth, not quantity of growth. Its forecast for China's 2018 GDP growth remains unchanged at 6.6%, while revised downward by 0.2 percentage points for 2019 to 6.2%.

In its latest World Economic Outlook, the organisation downgraded global economic growth to 3.7% for both 2018 and 2019 - 0.2% lower for both years than had been forecast in April.

Existing, proposed and new retaliatory tariffs could cause maximum gross domestic product (GDP) losses of 1.6% in China and close to 1% in the United States, it said.

The reason for the International Monetary Fund reducing its initial growth estimates is because of the imposition of duties on imports - read between the United States and China - and the under-performance of certain economies both developed and developing, including countries in the European Union, Great Britain, Japan, South Africa, Argentina, Turkey and Brazil.

China was the fastest growing economy in 2017 as it was ahead of India by 0.2 percentage points.

If China and the United States were to resolve their trade differences, it "would be a significant upside to the forecast". "Looking ahead, renewed impetus to reform labour and land markets, along with further improvements to the business climate are also crucial (in India)", it said.

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"But there is no denying that the susceptibility to large global shocks has risen", Obstfeld said.

According to the International Monetary Fund, growth in the United States, buoyed by a procyclical fiscal package, continues at a robust pace and is driving U.S. interest rates higher.

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.

Tensions have soared in recent months with US President Donald Trump's administration rolling out billions of US dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington views as unacceptable trade practices by the Asian giant.

Yi also expressed his confidence in the progress of this campaign to reduce financial risks.

It found that global GDP output under this scenario would fall by more than 0.8 percent in 2020 and remain roughly 0.4 percent lower in the long-term compared to levels without the effects of a trade war.

Washington has also imposed tariffs on steel and aluminium, citing national security concerns, and has also warned it could impose a 25% levy on imported cars and vehicle parts.

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