Pakistan says it will seek International Monetary Fund bailout as reserves dwindle

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

"That is going to trigger some outflows of capital that has flown very strongly from advanced economies to emerging markets in recent years", Adrian said at a briefing in Bali on Wednesday.

Overall for the global economy, the IMF cut the growth projections made in July for this year and the next by 0.2 per cent to 3.7 per cent, as IMF Chief Economist Maurice Obstfeld warned that "there are clouds on the horizon" and "the likelihood of further negative shocks to our growth forecast has risen".

The three leading economies of the continent, Nigeria, South Africa and Angola were projected "to witness sluggish growth in 2019 and beyond".

The global organisation warned a full-blown trade war between the United States and China could have wider implications for the financial growth around the world.

The IMF issues the report ahead of the Annual IMF and World Bank meetings where world leaders, finance ministers and nongovernmental organizations will gather this week in Bali, Indonesia.

"Growth has proven to be less balanced than we had hoped", International Monetary Fund chief economist Maurice Obstfeld told reporters on Tuesday in Bail.

According to the IMF, Japan's growth is projected to soften to 0.9 percent in 2019, unchanged from the July estimate. Over the medium term, growth is expected to gradually slow to 5.6 per cent as the economy continues to make the transition to a more sustainable growth path with continued financial de-risking and environmental controls, it noted.

'Strong growth over the summer is likely to reassure policymakers that the recent interest rate rise was warranted, but they'll be hoping to see the momentum maintained as Brexit approaches.

The IMF, in its twice annual assessment of global financial stability, said conditions remain broadly conducive to economic growth, but are at risk of worsening should emerging markets deteriorate further or trade tensions escalate. The fund expected inflation at 10.8 percent in 2018.

The financial market volatility will likely continue next year, because the US Federal Reserve, after raising the federal funds rate by 25 basis points in its September 26 meeting, nonetheless signaled another rate hike by the end of this year and maintained its projection for three rate hikes in 2019.

The country recorded an average 4.7 percent growth between 2000 and 2009.

It predicted 2.9 percent US growth this year, dropping to 2.5 percent next year, and to 1.8 percent in 2020, as the effect of USA tax cuts wears off and the trade war with China inhibits growth.

After a visit last week, the International Monetary Fund said Pakistan was facing significant economic challenges, with diminishing growth, high budget and current-account deficits, and low foreign-exchange reserves.

Pakistan's previous government had set a growth rate target of 6.2 percent for the current fiscal year but global and local institutions predict that the country will not be able to achieve this.

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