International Monetary Fund lowers SA's economic growth forecasts

The International Monetary Fund (IMF) on Tuesday downgraded its outlook for the world economy, warning that the imposition of import tariffs between the U.S. and China were taking its toll on global trade.

He admitted that the continent "will witness growth next year but the growing number of working class coupled with less jobs opportunities, huge public debts and poor infrastructure present a challenge in achieving the developmental goals of the United Nations".

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.

"I hope that the Pakistani market doesn't encounter the same weakness seen in the Turkish lira and Argentine peso over the past few months".

Canada's main stock index opened lower on Tuesday, tracking global stocks, after the International Monetary Fund cut its global growth forecasts blaming the Sino-U.S. trade war. It said the dispute between the USA and China would especially leave developing economies vulnerable to sudden stresses. "While Nigeria will grow from 1.9 per cent in 2018 to 2.3 percent in 2019, South Africa and Angola are projected to move from 0.8 to 1.4 and -0.1 to 3.1 per cents respectively".

The fund kept its forecast for growth in the Chinese economy unchanged at 6.6 percent this year.

Obstfeld said the International Monetary Fund does not see a generalized 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 some in Asia and some oil and metals exporting countries.

"But there is no denying that the susceptibility to large global shocks has risen", Obstfeld said. "Any sharp reversal for emerging markets would pose a significant threat to advanced economies".

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The Washington-based institution had predicted a 2019 growth rate of 1.5 percent for Russian Federation in its last update in July.

The IMF has slashed its latest growth forecasts, downgrading the US, China, the eurozone and the United Kingdom, as tit-for-tat tariffs bite.

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

It said, the prediction is lower due to recent increase in oil prices and the tightening of global financial conditions.

"Iran and Russian Federation, both faced with U.S. sanctions, have devised plans to increase trade interaction and ease mercantile regulations", Iran's state-run Tasnim News Agency added.

"We'll be listening very attentively when and if they come to us", Obstfeld said.

The IMF's analysis suggests that there is a 5 per cent probability, emerging market economies (excluding China) could face debt portfolio outflows of US$100 billion or more over a period of four quarters (equivalent to 0.6 per cent of their combined GDP), broadly similar in magnitude to the Global Financial Crisis.

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