Nigeria To Witness Sluggish Economic Growth In 2019

Kenny Grant
October 11, 2018

International Monetary Fund (IMF) chief Christine Lagarde on Thursday defended central bank rate hikes in a veiled rebuke to Donald Trump after the U.S. president blamed "crazy" Fed policies for contributing to financial market turmoil.

He did not specify how much in emergency financing the government would seek, but he had earlier said the government would need at least $8 billion to meet external debt payments through the end of the year.

Trump has led the escalating trade war because of what he believes are bad policies he said have created an $800 billion US trade deficit.

The IMF expects SA's economy to expand by 1.4% in 2019, down from its April projection of 1.7%.

An escalation in global trade tensions, together with rising geopolitical risks and policy uncertainty in major economies, could trigger a broad-based correction in global capital markets and cause a sharp tightening of global financial conditions, the International Monetary Fund (IMF) warned on Wednesday.

The worldwide organisation downgraded its predictions for global growth this week, and is now forecasting 3.7 percent global growth in both 2018 and 2019.

The IMF expects the USA economy to grow 2.9 per cent this year, the fastest pace since 2005 and unchanged from the July forecast. That's a significant downgrade from the IMF's assessment in April, when it projected a 3.9 percent growth rate.

Lagarde met with Finance Minister Asad Umar and State Bank of Pakistan Governor Tariq Bajwa, who are attending the fund's annual meeting in Bali.

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Reflecting such sentiments, growth in trade of goods and services across the world was revised down 0.6 point from the July forecast to 4.2 percent in 2018 and 0.5 point to 4.0 percent in 2019, according to the report.

Growth in the 19-nation zone is forecast to slow further to 1.9 percent in 2019, unchanged from the July estimate.

"The government has chose to approach the International Monetary Fund for stabilisation and an economic recovery programme", said the Finance Ministry in a statement after the stock market suffered an over 1,300-point plunge, losing nearly 270 billion Pakistani rupees ($2 billion) of its capitalisation - the highest single-day loss in a decade.

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

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

Washington simultaneously threatened to add tariffs to a further $267 billion (£205 billion) of products, which saw Beijing retaliate with 10 percent tariffs on $60 billion (£46 billion) of U.S. imports.

More tariffs and their countermeasures "could lead to a broader tightening of financial conditions, with negative implications for the global economy and financial stability", the fund warned. In September, Trump imposed tariffs on almost $200 billion of Chinese imports, with China responding with higher tariffs on about $60 billion of USA imports.

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