Pakistan`s central bank raised its key interest rate to 12.25% on Monday, warning that already soaring inflation risked further rises on the back of higher oil prices and reforms required for a bailout from the International Monetary Fund.

The 150 basis points increase follows a preliminary agreement last week with the IMF for a $6 billion loan that is expected to come with tough conditions, including raising more tax revenues and putting up gas and power prices. It was the eighth time the central bank has increased its main policy rate since the start of last year.

With economic growth set to slow to 2.9% this year from 5.2% last year, according to IMF forecasts, the rate rise adds to pressure on Prime Minister Imran Khan, who came to power last year facing a balance of payments crisis that has now forced his government to turn to the IMF.

Higher prices for basic essentials including food and energy has already stirred public anger but the central bank suggested there was little prospect of any immediate improvement.

Noting average headline inflation rose to 7% in the July-April period from 3.8 per cent a year earlier, the central bank said recent rises in domestic oil prices and the cost of food suggested that "inflationary pressures are likely to continue for some time".

It said it expected headline inflation to average between 6.5% and 7.5% for the financial year to the end of June and was expected to be "considerably higher" in the coming year. Expected tax measures in next month`s budget, as well as higher gas and power prices and volatility in international oil prices, could push inflation up further, it said.

It said the fiscal deficit, which the IMF expects to reach 7.2% of gross domestic product (GDP) this year, was likely to have been "considerably higher" during the July-March period than in the same period a year earlier due to shortfalls in revenue collection, higher interest payments and security costs.

Despite some improvements, financing the current account deficit remained "challenging" and foreign exchange reserves of $8.8 billion were below standard adequacy levels at less than the equivalent of three months of imports.

The central bank said it was watching foreign exchange markets closely and was prepared to take action to curb "unwarranted" volatility, after the sharp fall in the rupee over recent days that saw the currency touch a record low of 150 against the US dollar.

Details of what Pakistan will be required to do under the IMF agreement, which must still be approved by the Fund`s board, have not been announced but already opposition parties are planning protests.

As well as higher energy prices that will hit households hard, there are also expectations of new taxes and spending cuts in next month`s budget to reach a primary budget deficit - excluding interest payments - of 0.6% of GDP.

With the IMF forecasting a primary deficit of 2.2% for the coming financial year, that implies squeezing roughly $5 billion in extra revenues from Pakistan`s $315 billion economies, which has long suffered from problems raising tax revenue.

Pakistan`s central bank raised its key interest rate to 12.25% on Monday, warning that already soaring inflation risked further rises on the back of higher oil prices and reforms required for a bailout from the International Monetary Fund.

Pakistan`s central bank raised its key interest rate to 12.25% on Monday, warning that already soaring inflation risked further rises on the back of higher oil prices and reforms required for a bailout from the International Monetary Fund. The 150 basis points increase follows a preliminary agreement last week with the IMF for a $6 billion loan that is expected to come with tough conditions, including raising more tax revenues and putting up gas and power prices. It was the eighth time the central bank has increased its main policy rate since the start of last year. With economic growth set to slow to 2.9% this year from 5.2% last year, according to IMF forecasts, the rate rise adds to pressure on Prime Minister Imran Khan, who came to power last year facing a balance of payments crisis that has now forced his government to turn to the IMF. Higher prices for basic essentials including food and energy has already stirred public anger but the central bank suggested there was little prospect of any immediate improvement. Noting average headline inflation rose to 7% in the July-April period from 3.8 per cent a year earlier, the central bank said recent rises in domestic oil prices and the cost of food suggested that "inflationary pressures are likely to continue for some time". It said it expected headline inflation to average between 6.5% and 7.5% for the financial year to the end of June and was expected to be "considerably higher" in the coming year. Expected tax measures in next month`s budget, as well as higher gas and power prices and volatility in international oil prices, could push inflation up further, it said. It said the fiscal deficit, which the IMF expects to reach 7.2% of gross domestic product (GDP) this year, was likely to have been "considerably higher" during the July-March period than in the same period a year earlier due to shortfalls in revenue collection, higher interest payments and security costs. Despite some improvements, financing the current account deficit remained "challenging" and foreign exchange reserves of $8.8 billion were below standard adequacy levels at less than the equivalent of three months of imports. The central bank said it was watching foreign exchange markets closely and was prepared to take action to curb "unwarranted" volatility, after the sharp fall in the rupee over recent days that saw the currency touch a record low of 150 against the US dollar. Details of what Pakistan will be required to do under the IMF agreement, which must still be approved by the Fund`s board, have not been announced but already opposition parties are planning protests. As well as higher energy prices that will hit households hard, there are also expectations of new taxes and spending cuts in next month`s budget to reach a primary budget deficit - excluding interest payments - of 0.6% of GDP. With the IMF forecasting a primary deficit of 2.2% for the coming financial year, that implies squeezing roughly $5 billion in extra revenues from Pakistan`s $315 billion economies, which has long suffered from problems raising tax revenue.

Pakistani central bank lifts interest rate as inflation bites

Pakistan Prime Minister Imran Khan has hit out at the opposition parties which gathered in Islamabad for an Iftar-dinner, holding them responsible for the country's record foreign debt and economic woes.

In a show of unity, Pakistan Muslim League-Nawaz (PML-N) leader Maryam Nawaz met the chairman of Pakistan People Party (PPP) Bilawal Bhutto at an Iftar-dinner hosted by him here on Sunday.

It was for the first time that Maryam came face-to-face with Bilawal whose slain mother Benazir Bhutto was a strong rival of now-jailed ex-prime minister Nawaz Sharif but later the two joined hands against military ruler Pervez Musharraf.

The Iftar-dinner was also attended by other opposition leaders, including Awami National Party leader Asfandyar Wali, Pashtunkhwa Milli Awami Party (PkMAP) Chairman Mehmood Khan Achakzai among others.&nbsp;

"These people [opposition leaders] have gathered under the guise of safeguarding democracy. In fact, they are the reason for the country's present crises," Khan said.

Khan said that the Pakistan Tehreek-e-Insaf government assumed charge in the toughest of times when the country's debt was at a historic high.

He said that the nation is hopeful for the country's progress and he will prove that Pakistan will be at the top in the region.

"We inherited Pakistan in the most difficult circumstances with a record foreign debt and a huge economic deficit. But I will prove that Pakistan will emerge as the fastest growing country in the whole region."

"However, we will bring the country back on the path to progress by working tirelessly," he told the audience at a fundraiser.&nbsp;

Cash-strapped Pakistan last week reached an agreement with the International Monetary Fund on a bailout package under which the cash-strapped country will receive $6 billion over three years.

The country is seeking this money to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy.&nbsp;

The latest deal would be the 22nd bailout package since Pakistan became a member of the IMF in 1950. 
&nbsp;

Pakistan Prime Minister Imran Khan has hit out at the opposition parties which gathered in Islamabad for an Iftar-dinner, holding them responsible for the country's record foreign debt and economic woes.

Pakistan Prime Minister Imran Khan has hit out at the opposition parties which gathered in Islamabad for an Iftar-dinner, holding them responsible for the country's record foreign debt and economic woes. In a show of unity, Pakistan Muslim League-Nawaz (PML-N) leader Maryam Nawaz met the chairman of Pakistan People Party (PPP) Bilawal Bhutto at an Iftar-dinner hosted by him here on Sunday. It was for the first time that Maryam came face-to-face with Bilawal whose slain mother Benazir Bhutto was a strong rival of now-jailed ex-prime minister Nawaz Sharif but later the two joined hands against military ruler Pervez Musharraf. The Iftar-dinner was also attended by other opposition leaders, including Awami National Party leader Asfandyar Wali, Pashtunkhwa Milli Awami Party (PkMAP) Chairman Mehmood Khan Achakzai among others. "These people [opposition leaders] have gathered under the guise of safeguarding democracy. In fact, they are the reason for the country's present crises," Khan said. Khan said that the Pakistan Tehreek-e-Insaf government assumed charge in the toughest of times when the country's debt was at a historic high. He said that the nation is hopeful for the country's progress and he will prove that Pakistan will be at the top in the region. "We inherited Pakistan in the most difficult circumstances with a record foreign debt and a huge economic deficit. But I will prove that Pakistan will emerge as the fastest growing country in the whole region." "However, we will bring the country back on the path to progress by working tirelessly," he told the audience at a fundraiser. Cash-strapped Pakistan last week reached an agreement with the International Monetary Fund on a bailout package under which the cash-strapped country will receive $6 billion over three years. The country is seeking this money to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. The latest deal would be the 22nd bailout package since Pakistan became a member of the IMF in 1950.

Imran Khan blames opposition parties for Pakistan's economic woes

<a href="https://www.wionews.com/world/australian-voters-tipped-to-elect-labour-government-219514">Labour Party expected to return to power after 6 years in political wilderness as Australia votes</a>

Australians began voting in a federal election on Saturday, with bookies predicting a return to power for the Labour party after six years in the political wilderness and a campaign in which it has put climate change and tax reform at the top of its agenda.

<a href="https://www.wionews.com/south-asia/too-early-to-assess-sri-lanka-economic-damage-from-easter-bombings-imf-219527">Too early to assess Sri Lanka economic damage from Easter bombings: IMF</a>

The International Monetary Fund said on Thursday it was holding its forecast for Sri Lanka's 2019 economic growth at 3.5% in spite of devastating Easter bombings, saying it was too early to assess financial damage.

<a href="https://www.wionews.com/world/chinas-tough-rhetoric-leaves-trade-talks-with-us-in-limbo-219517">China's tough rhetoric leaves trade talks with US in limbo</a>

China struck a more aggressive tone in its trade war with the United States on Friday, suggesting a resumption of talks between the world's two largest economies would be meaningless unless Washington changed course.

<a href="https://www.wionews.com/world/venezuelas-maduro-says-norway-talks-sought-peaceful-agenda-with-opposition-219519">Venezuela's Maduro says Norway talks sought 'peaceful agenda' with opposition</a>

Talks in Norway this week with representatives of Venezuela's government and the opposition sought to "build a peaceful agenda" for the crisis-stricken South American country, President Nicolas Maduro said on Friday.

<a href="https://www.wionews.com/india-news/jammu-and-kashmir-encounter-underway-in-pulwama-district-one-terrorist-killed-219516">Jammu and Kashmir: Encounter underway in Pulwama &amp; Anantnag, two terrorists killed</a>

The security forces gunned down two terrorists on Saturday morning and one of the body was found in Jammu and Kashmir's Pulwama district during the post counter search.

Among the two, one of them is believed to be Showkat Dar, a Hizb-ul-Mujahideen commander.

Labour Party expected to return to power after 6 years in political wilderness as Australia votes Australians began voting in a federal election on Saturday, with bookies predicting a return to power for the Labour party after six years in the political wilderness and a campaign in which it has put climate change and tax reform at the top of its agenda.

Labour Party expected to return to power after 6 years in political wilderness as Australia votes Australians began voting in a federal election on Saturday, with bookies predicting a return to power for the Labour party after six years in the political wilderness and a campaign in which it has put climate change and tax reform at the top of its agenda. Too early to assess Sri Lanka economic damage from Easter bombings: IMF The International Monetary Fund said on Thursday it was holding its forecast for Sri Lanka's 2019 economic growth at 3.5% in spite of devastating Easter bombings, saying it was too early to assess financial damage. China's tough rhetoric leaves trade talks with US in limbo China struck a more aggressive tone in its trade war with the United States on Friday, suggesting a resumption of talks between the world's two largest economies would be meaningless unless Washington changed course. Venezuela's Maduro says Norway talks sought 'peaceful agenda' with opposition Talks in Norway this week with representatives of Venezuela's government and the opposition sought to "build a peaceful agenda" for the crisis-stricken South American country, President Nicolas Maduro said on Friday. Jammu and Kashmir: Encounter underway in Pulwama & Anantnag, two terrorists killed The security forces gunned down two terrorists on Saturday morning and one of the body was found in Jammu and Kashmir's Pulwama district during the post counter search. Among the two, one of them is believed to be Showkat Dar, a Hizb-ul-Mujahideen commander.

News brief: Big stories of the day

The International Monetary Fund said on Thursday it was holding its forecast for <a href="https://www.wionews.com/south-asia/us-sri-lanka-resolved-to-work-together-for-peace-security-in-indo-pacific-joint-statement-219526">Sri Lanka's 2019 economic growth</a> at 3.5% in spite of devastating Easter bombings, saying it was too early to assess financial damage.

The April 21 bombings, which killed more than 250 people in churches and hotels and were claimed by Islamic State, have scared tourists away and soured business sentiment on the island.

Sri Lanka's economy, which depends on tourism, garment manufacturing, tea exports and remittances, was already at a low point before the bombings.

The economy grew 3.2% last year, the weakest in 17 years, as a weeks-long political crisis and monetary policy tightenings sapped business confidence and cooled investment.

A Reuters poll of 10 analysts predicted last week that growth could slide to just 2.5% this year following the attacks.

But the IMF said it was maintaining its growth projection due to a lack of new official data and clear information to assess the impact on growth of the Easter bombings.

"It will be speculative for us to revise our growth projection at this juncture," Manuela Goretti, the IMF's mission chief for Sri Lanka, said in a teleconference with journalists in the capital Colombo.

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"So we maintain our growth projection for 2019 at 3.5% with the gradual improvement in the medium term at 5%."

Subir Gokarn, the executive director for Sri Lanka, India, Bhutan and Bangladesh at the IMF, and his alternate, Mahinda Siriwardana, said in an earlier report that Sri Lanka's budget and current account deficits could widen more than expected because of the bombings.

The IMF said in an emailed statement on Friday that the views of the executive director for Sri Lanka represent the country's authorities and are different from the fund's official position.

Previously, the IMF said it expected that this year's fiscal deficit would fall to 4.5% of gross domestic product (GDP) from last year's 5.3%, and the current account deficit to 2.8% from 3.2% in 2018.

Gokarn and Siriwardana did not provide fresh estimates but said normalcy had largely returned to the island, thanks to government measures including the implementation of emergency law.

"Authorities expect to get through this incident expeditiously, putting the country back on track to benefit from improving economic fundamentals," the directors said.

In March, the Fund agreed to extend a $1.5 billion loan facility to Sri Lanka for an extra year, following the country's seven-week political crisis last year.

On Tuesday, the lender approved disbursal of a $164 million tranche, bringing the total disbursed to more than $1.16 billion.

The loan is crucial for Sri Lanka to secure more attractive borrowing terms.

The International Monetary Fund said on Thursday it was holding its forecast for Sri Lanka's 2019 economic growth at 3.5% in spite of devastating Easter bombings, saying it was too early to assess financial damage.

The International Monetary Fund said on Thursday it was holding its forecast for Sri Lanka's 2019 economic growth at 3.5% in spite of devastating Easter bombings, saying it was too early to assess financial damage. The April 21 bombings, which killed more than 250 people in churches and hotels and were claimed by Islamic State, have scared tourists away and soured business sentiment on the island. Sri Lanka's economy, which depends on tourism, garment manufacturing, tea exports and remittances, was already at a low point before the bombings. The economy grew 3.2% last year, the weakest in 17 years, as a weeks-long political crisis and monetary policy tightenings sapped business confidence and cooled investment. A Reuters poll of 10 analysts predicted last week that growth could slide to just 2.5% this year following the attacks. But the IMF said it was maintaining its growth projection due to a lack of new official data and clear information to assess the impact on growth of the Easter bombings. "It will be speculative for us to revise our growth projection at this juncture," Manuela Goretti, the IMF's mission chief for Sri Lanka, said in a teleconference with journalists in the capital Colombo. "So we maintain our growth projection for 2019 at 3.5% with the gradual improvement in the medium term at 5%." Subir Gokarn, the executive director for Sri Lanka, India, Bhutan and Bangladesh at the IMF, and his alternate, Mahinda Siriwardana, said in an earlier report that Sri Lanka's budget and current account deficits could widen more than expected because of the bombings. The IMF said in an emailed statement on Friday that the views of the executive director for Sri Lanka represent the country's authorities and are different from the fund's official position. Previously, the IMF said it expected that this year's fiscal deficit would fall to 4.5% of gross domestic product (GDP) from last year's 5.3%, and the current account deficit to 2.8% from 3.2% in 2018. Gokarn and Siriwardana did not provide fresh estimates but said normalcy had largely returned to the island, thanks to government measures including the implementation of emergency law. "Authorities expect to get through this incident expeditiously, putting the country back on track to benefit from improving economic fundamentals," the directors said. In March, the Fund agreed to extend a $1.5 billion loan facility to Sri Lanka for an extra year, following the country's seven-week political crisis last year. On Tuesday, the lender approved disbursal of a $164 million tranche, bringing the total disbursed to more than $1.16 billion. The loan is crucial for Sri Lanka to secure more attractive borrowing terms.

Too early to assess Sri Lanka economic damage from Easter bombings: IMF

The<a href="https://www.wionews.com/south-asia/imf-agrees-to-6-billion-bailout-for-pakistan-but-wants-action-on-terror-funding-218179"> International Monetary Fund</a> Tuesday released a long-delayed loan instalment to Sri Lanka, providing financial relief to a government still reeling from the Easter Sunday bombings that claimed 258 lives.

The Washington-based lender said it was releasing $164.1 million to Sri Lanka under a three-year $1.5 billion bailouts that were suspended in October during a power struggle between the president and the prime minister.

With the status quo restored, the administration has been able to present a "well-targeted 2019 budget, rebuilding reserves, while maintaining a prudent monetary policy", said IMF deputy managing director Mitsuhiro Furusawa.

The power struggle was resolved after the Supreme Court ruled that <a href="https://www.wionews.com/south-asia/leave-my-country-alone-sri-lankan-president-sirisena-tells-islamic-state-215011">President Maithripala Sirisena</a> violated the constitution by sacking Prime Minister Ranil Wickremesinghe's government.

The loan programme, begun in June 2016, would be extended by a further year, the IMF said.

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Sri Lanka estimates that it will lose about $1.5 million in revenue this year as a result of a sharp dip in tourist arrivals following the April 21 suicide bombings.

The bombings, blamed on a local jihadi group, targeted three Christian churches and three luxury hotels.

During the political crisis in the final quarter of 2018, three international credit rating agencies downgraded the country's debt making it more expensive to borrow abroad.

Official figures show that Sri Lanka will have to repay a record $5.9 billion in foreign loans in 2019.

The IMF also renewed its call to the Sri Lankan government to restructure the loss-making national carrier Sri Lankan Airlines, which has accumulated losses and debts of over $2 billion.

The government has failed to privatise the airline, but the president has revived attempts to find a partner who could inject new capital to keep the airline afloat.&nbsp;

The International Monetary Fund Tuesday released a long-delayed loan instalment to Sri Lanka, providing financial relief to a government still reeling from the Easter Sunday bombings that claimed 258 lives.

The International Monetary Fund Tuesday released a long-delayed loan instalment to Sri Lanka, providing financial relief to a government still reeling from the Easter Sunday bombings that claimed 258 lives. The Washington-based lender said it was releasing $164.1 million to Sri Lanka under a three-year $1.5 billion bailouts that were suspended in October during a power struggle between the president and the prime minister. With the status quo restored, the administration has been able to present a "well-targeted 2019 budget, rebuilding reserves, while maintaining a prudent monetary policy", said IMF deputy managing director Mitsuhiro Furusawa. The power struggle was resolved after the Supreme Court ruled that President Maithripala Sirisena violated the constitution by sacking Prime Minister Ranil Wickremesinghe's government. The loan programme, begun in June 2016, would be extended by a further year, the IMF said. × Sri Lanka estimates that it will lose about $1.5 million in revenue this year as a result of a sharp dip in tourist arrivals following the April 21 suicide bombings. The bombings, blamed on a local jihadi group, targeted three Christian churches and three luxury hotels. During the political crisis in the final quarter of 2018, three international credit rating agencies downgraded the country's debt making it more expensive to borrow abroad. Official figures show that Sri Lanka will have to repay a record $5.9 billion in foreign loans in 2019. The IMF also renewed its call to the Sri Lankan government to restructure the loss-making national carrier Sri Lankan Airlines, which has accumulated losses and debts of over $2 billion. The government has failed to privatise the airline, but the president has revived attempts to find a partner who could inject new capital to keep the airline afloat.

IMF provides financial relief to Sri Lanka, releases long-delayed cash

The head of the International Monetary Fund said Tuesday that <a href="https://www.wionews.com/world/chinas-top-trade-negotiator-to-visit-us-despite-tariffs-216689">fresh trade tensions between the United States and China</a> were the main threat to the world economy.

"Clearly the tensions between the United States and China are the threat for the world economy," Christine Lagarde told journalists at a conference in Paris, adding that recent "rumours and tweets" made an agreement between the countries less likely.&nbsp;

President Donald Trump jolted global markets on Monday by threatening on Twitter that <a href="https://www.wionews.com/world/trump-announces-higher-us-tariffs-on-china-goods-216186">tariffs already imposed on $200 billion in Chinese exports</a> to US would more than double to 25 per cent on Friday from their current level of 10 per cent.

Also speaking at the Paris Forum event, French Economy Minister Bruno Le Maire warned about the impact of a trade war between the world's two biggest economies.

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"We are looking very carefully at the current negotiations between China and the US. We want these negotiations to stick with principles of transparency and multilateralism," he said, speaking in English.

He called on the two sides to "avoid decisions that would threaten and jeopardise world growth in the coming months."

"Raising tariffs is always a deadlock and a negative decision for everybody -- for the US, for China, for the eurozone, for Europe and for growth all over the world," he said.

Le Maire cautioned that during a period of slowdown in world growth there should not be "negative decisions that could accelerate that slowdown."

China said Tuesday its top trade negotiator will visit the United States for talks with his American counterparts this week.

The countries have been locked in talks to resolve tensions that have seen both of them impose tariffs on goods worth $360 billion.

Treasury Secretary Steven Mnuchin has described the negotiations as 90 per cent complete but told reporters that in recent days the talks went "substantially backwards", which he blamed on China reneging on previous commitments.

The head of the International Monetary Fund said Tuesday that fresh trade tensions between the United States and China were the main threat to the world economy.

The head of the International Monetary Fund said Tuesday that fresh trade tensions between the United States and China were the main threat to the world economy. "Clearly the tensions between the United States and China are the threat for the world economy," Christine Lagarde told journalists at a conference in Paris, adding that recent "rumours and tweets" made an agreement between the countries less likely. President Donald Trump jolted global markets on Monday by threatening on Twitter that tariffs already imposed on $200 billion in Chinese exports to US would more than double to 25 per cent on Friday from their current level of 10 per cent. Also speaking at the Paris Forum event, French Economy Minister Bruno Le Maire warned about the impact of a trade war between the world's two biggest economies. "We are looking very carefully at the current negotiations between China and the US. We want these negotiations to stick with principles of transparency and multilateralism," he said, speaking in English. He called on the two sides to "avoid decisions that would threaten and jeopardise world growth in the coming months." "Raising tariffs is always a deadlock and a negative decision for everybody -- for the US, for China, for the eurozone, for Europe and for growth all over the world," he said. Le Maire cautioned that during a period of slowdown in world growth there should not be "negative decisions that could accelerate that slowdown." China said Tuesday its top trade negotiator will visit the United States for talks with his American counterparts this week. The countries have been locked in talks to resolve tensions that have seen both of them impose tariffs on goods worth $360 billion. Treasury Secretary Steven Mnuchin has described the negotiations as 90 per cent complete but told reporters that in recent days the talks went "substantially backwards", which he blamed on China reneging on previous commitments.

IMF chief Christine Lagarde says US-China tensions 'threat' to world economy

A Pakistani economist working for the International Monetary Fund (IMF) has been appointed as the governor of the State Bank of Pakistan (SBP), as the cash-strapped country seeks to finalise a multi-billion dollar bailout package from the global lender.

Prime Minister Imran Khan's government Saturday removed chiefs of the SBP and the Federal Board of Revenue (FBR), in a surprise move days after an IMF team visited Islamabad to hold talks for the bailout package. Both the SBP governor and the FBR chairman are key players in any IMF programme.

"The President of Pakistan is pleased to appoint Dr Reza Baqir as Governor State Bank of Pakistan (SBP) for a period of three years from the date he assumes office," read a notification from the government issued late Saturday night.

A Harvard and Berkeley University of California alumnus, Baqir has been with the IMF since 2000. He is currently serving in the IMF as senior resident representative to Egypt.

Baqir has been the chief of the IMF's Debt Policy Division and worked on IMF policies on external debt sustainability and restructuring of member countries. Before the IMF, Baqir worked at the World Bank, the Massachusetts Institute of Technology and the Union Bank of Switzerland.

The government also appointed Ahmed Mujtaba Memon as the chairman of the FBR - the tax collection body.

Memon comes from the Pakistan Customs Service and is presently an additional secretary in the Finance Division. A notification for Memon's appointment is likely to be issued shortly, Geo TV reported.

The key appointments come weeks after Finance Minister Asad Umar abruptly quit the Cabinet last month in the middle of the negotiations to secure the crucial multi-billion dollar IMF bailout package, amid mounting criticism over the handling of the economic crisis.

Prime Minister Khan appointed Dr Abdul Hafeez Sheikh as Adviser on Finance in place of Umar, as inflation rose to its highest in six years.

Both the finance minister and the SBP governor co-sign the Letter of Intent that a country sends to the IMF managing director for requesting a bailout package.

A delegation of the IMF arrived in Pakistan on Monday to hold technical discussions for the bailout package, days after Prime Minister Khan met IMF chief Christine Lagarde in China.

Pakistan is seeking $8 billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy.

Islamabad has so far received a total of $9.1 billion in financial aid packages from friendly countries like China, Saudi Arabia and the UAE during the current fiscal year.

The talks with the IMF are supposedly 'progressing' according to Shaikh.

According to some analysts, the fresh appointments have taken away the control of Pakistan's economy from the civilian government.

While in opposition, Khan was against taking loans from the IMF but in the last few months, he not only twice requested the IMF chief to approve the loan package but has now also hired their man to oversee the programme on behalf of the government of the Pakistan Tehreek-e-Insaf (PTI).

Citing sources, the Express Tribune reported that Baqir was residing in the Guest House of the PM's House, which is also temporary residence of the de facto finance minister Shaikh.

Baqir's immediate responsibilities will be to roll out policies set out by the IMF including implementing a flexible exchange rate regime, reducing the government's reliance on central bank borrowings and ensuring transparency in many loans transactions.

A Pakistani economist working for the International Monetary Fund (IMF) has been appointed as the governor of the State Bank of Pakistan (SBP), as the cash-strapped country seeks to finalise a multi-billion dollar bailout package from the global lender.

A Pakistani economist working for the International Monetary Fund (IMF) has been appointed as the governor of the State Bank of Pakistan (SBP), as the cash-strapped country seeks to finalise a multi-billion dollar bailout package from the global lender. Prime Minister Imran Khan's government Saturday removed chiefs of the SBP and the Federal Board of Revenue (FBR), in a surprise move days after an IMF team visited Islamabad to hold talks for the bailout package. Both the SBP governor and the FBR chairman are key players in any IMF programme. "The President of Pakistan is pleased to appoint Dr Reza Baqir as Governor State Bank of Pakistan (SBP) for a period of three years from the date he assumes office," read a notification from the government issued late Saturday night. A Harvard and Berkeley University of California alumnus, Baqir has been with the IMF since 2000. He is currently serving in the IMF as senior resident representative to Egypt. Baqir has been the chief of the IMF's Debt Policy Division and worked on IMF policies on external debt sustainability and restructuring of member countries. Before the IMF, Baqir worked at the World Bank, the Massachusetts Institute of Technology and the Union Bank of Switzerland. The government also appointed Ahmed Mujtaba Memon as the chairman of the FBR - the tax collection body. Memon comes from the Pakistan Customs Service and is presently an additional secretary in the Finance Division. A notification for Memon's appointment is likely to be issued shortly, Geo TV reported. The key appointments come weeks after Finance Minister Asad Umar abruptly quit the Cabinet last month in the middle of the negotiations to secure the crucial multi-billion dollar IMF bailout package, amid mounting criticism over the handling of the economic crisis. Prime Minister Khan appointed Dr Abdul Hafeez Sheikh as Adviser on Finance in place of Umar, as inflation rose to its highest in six years. Both the finance minister and the SBP governor co-sign the Letter of Intent that a country sends to the IMF managing director for requesting a bailout package. A delegation of the IMF arrived in Pakistan on Monday to hold technical discussions for the bailout package, days after Prime Minister Khan met IMF chief Christine Lagarde in China. Pakistan is seeking $8 billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. Islamabad has so far received a total of $9.1 billion in financial aid packages from friendly countries like China, Saudi Arabia and the UAE during the current fiscal year. The talks with the IMF are supposedly 'progressing' according to Shaikh. According to some analysts, the fresh appointments have taken away the control of Pakistan's economy from the civilian government. While in opposition, Khan was against taking loans from the IMF but in the last few months, he not only twice requested the IMF chief to approve the loan package but has now also hired their man to oversee the programme on behalf of the government of the Pakistan Tehreek-e-Insaf (PTI). Citing sources, the Express Tribune reported that Baqir was residing in the Guest House of the PM's House, which is also temporary residence of the de facto finance minister Shaikh. Baqir's immediate responsibilities will be to roll out policies set out by the IMF including implementing a flexible exchange rate regime, reducing the government's reliance on central bank borrowings and ensuring transparency in many loans transactions.

Pakistan appoints former IMF official as new State Bank of Pakistan governor

A delegation of the IMF arrived in Pakistan on Monday to hold technical discussions for a bailout package to the cash-strapped country, days after Prime Minister Imran Khan met IMF chief Christine Lagarde in China.

Pakistan is seeking $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy.

With the generous Chinese assistance, Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries during the current fiscal year.

According to adviser and spokesman for the Ministry of Finance Khaqan Najeeb, the IMF team will meet officials of the ministry, the Federal Board of Revenue and the State Bank during its visit.

The two sides will discuss the possibility of a $7 to $8 billion loans for Pakistan, Geo News reported.

"The talks aim to determine the terms and conditions of the three-year programme," an official at the finance ministry told PTI.

The details of the package will be finalised between the funds' team lead by the director for the Middle East and Central Asia Ernesto Meris and Finance Secretary Yunus Dhaga.

The talks will continue for about a week, the official said.

Pakistan has already finalised the summary of data on various economic matters as demanded by the IMF, including details about the performance of the economy in the first nine months of the current fiscal year.

The IMF will also get details about the upcoming budget for 2019-20 which is expected to be announced towards the end of May.

Details about loans from China and the IMF insistence to increase the tax-to-GDP ratio to 13.2 per cent were some of the sticking points to finalise the package.

It is not clear how much assistance IMF will provide but Pakistan is expecting between $6-8 billion, the official said.

Pakistan was already taking measures to fulfil some of the pre-conditions to increase exports, widen the tax base and adjust the exchange rate.

Prime Minister Khan met IMF Director Lagarde on Friday on the sidelines of the second Belt and Road Forum in Beijing, China.

During the meeting, they agreed on the importance of the IMF programme for the country and reviewed the relationship between Pakistan and the global lender, the report said.

Khan had identified areas of reforms and initiatives being undertaken by his government to stabilise the economy, control inflation and achieve fiscal balance.

They also agreed on the need for a social safety net for vulnerable groups of society.

"We discussed prospects for a comprehensive policy package and international financial support to help stabilise the economy of Pakistan, and also the need to strengthen governance and protect the poor," Lagarde said in a post after the meeting.

Pakistan wants the IMF to focus on the long-term structural reforms that help revive its economy instead of attaching conditions that would be difficult to implement.&nbsp;

A delegation of the IMF arrived in Pakistan on Monday to hold technical discussions for a bailout package to the cash-strapped country, days after Prime Minister Imran Khan met IMF chief Christine Lagarde in China.

A delegation of the IMF arrived in Pakistan on Monday to hold technical discussions for a bailout package to the cash-strapped country, days after Prime Minister Imran Khan met IMF chief Christine Lagarde in China. Pakistan is seeking $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. With the generous Chinese assistance, Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries during the current fiscal year. According to adviser and spokesman for the Ministry of Finance Khaqan Najeeb, the IMF team will meet officials of the ministry, the Federal Board of Revenue and the State Bank during its visit. The two sides will discuss the possibility of a $7 to $8 billion loans for Pakistan, Geo News reported. "The talks aim to determine the terms and conditions of the three-year programme," an official at the finance ministry told PTI. The details of the package will be finalised between the funds' team lead by the director for the Middle East and Central Asia Ernesto Meris and Finance Secretary Yunus Dhaga. The talks will continue for about a week, the official said. Pakistan has already finalised the summary of data on various economic matters as demanded by the IMF, including details about the performance of the economy in the first nine months of the current fiscal year. The IMF will also get details about the upcoming budget for 2019-20 which is expected to be announced towards the end of May. Details about loans from China and the IMF insistence to increase the tax-to-GDP ratio to 13.2 per cent were some of the sticking points to finalise the package. It is not clear how much assistance IMF will provide but Pakistan is expecting between $6-8 billion, the official said. Pakistan was already taking measures to fulfil some of the pre-conditions to increase exports, widen the tax base and adjust the exchange rate. Prime Minister Khan met IMF Director Lagarde on Friday on the sidelines of the second Belt and Road Forum in Beijing, China. During the meeting, they agreed on the importance of the IMF programme for the country and reviewed the relationship between Pakistan and the global lender, the report said. Khan had identified areas of reforms and initiatives being undertaken by his government to stabilise the economy, control inflation and achieve fiscal balance. They also agreed on the need for a social safety net for vulnerable groups of society. "We discussed prospects for a comprehensive policy package and international financial support to help stabilise the economy of Pakistan, and also the need to strengthen governance and protect the poor," Lagarde said in a post after the meeting. Pakistan wants the IMF to focus on the long-term structural reforms that help revive its economy instead of attaching conditions that would be difficult to implement.

IMF delegation arrives in Pakistan to hold talks on bailout package

Sri Lanka faces a likely collapse in tourism following <a href="https://www.wionews.com/west-asia/islamic-state-claims-responsibility-for-sri-lanka-bombings-212899">Easter Sunday bomb attacks</a> on churches and hotels, which would deal a <a href="https://www.wionews.com/south-asia/danish-billionaire-loses-three-children-in-sri-lanka-blasts-212889">severe blow to the island's economy</a> and financial markets, and potentially force it to seek further IMF assistance.

The International Monetary Fund extended last month a $1.5 billion loan for an extra year into 2020, a key step in keeping foreign investors involved in what so far this year has been a top-performing frontier debt market.

But with growth, and therefore state revenues, now likely to slow significantly, the budget targets agreed with the IMF may have to be reviewed, and the government is expected to resist pressure for any spending cuts before elections expected later this year.

There is even a possibility that more IMF money may be needed if foreign investment falls, adding to the hard currency gap left by plunging tourism receipts.

"If growth slows a lot more and the budget deficit assumptions need to be reassessed, then they'll have to sit down and negotiate something more feasible," said Alex Holmes, Asia economist at Capital Economics.

The Sri Lankan stock index dived 2.6 per cent on Tuesday in its first day of trading after the attacks that killed more than 300 people, while the heavily-managed rupee held steady.

Tourism is Sri Lanka's third-largest and fastest growing source of foreign currency, after remittances and garment exports, accounting for almost $4.4 billion or 4.9 per cent of gross domestic product (GDP) in 2018.

A fall in tourism receipts is bound to weaken the rupee over time. The central bank, whose coffers are too light to defend the currency through interventions, is likely to have to raise interest rates.

This, in turn, would choke lending, hurting consumers and the investment plans of local businesses, while also making it more costly for the government to seek funding from foreign investors via bond markets.

"The central bank may be forced to hike rates again this year," said Win Thin, global head of currency strategy at Brown Brothers Harriman (BBH).

"With foreign reserves very low right now, the central bank cannot actively support the rupee."

After falling 16 per cent against the US dollar last year to record lows, the rupee had gained 4.6 per cent this year as of last week.

Sri Lankan bonds have been among the best performing globally, only bettered by Argentina and Chile. But the main stock index has lost about 10 per cent.

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Weak finances

Sri Lanka's external position was already precarious.

To help fund a record $5.9 billion in foreign loans this year, the country successfully sold $2.4 billion in five-year and 10-year US dollar bonds last month, but that was right after the IMF extension and amid bets of looser monetary policy.

In January, Sri Lanka used its reserves to repay debt worth $1 billion. It had about $5 billion left in February, the least since April 2017, and only enough to cover two months of imports and about two-thirds of its short-term external debt, according to BBH calculations.

Colombo also needs to finance a current account deficit of about 3 per cent of GDP.

Prime Minister Ranil Wickremesinghe is already facing heavy criticism domestically for higher taxes, and tight monetary and fiscal policies that have crimped growth to a 17-year low.

Having emerged from a 51-day political crisis in which President Maithripala Sirisena sacked and replaced him with pro-China former president Mahinda Rajapaksa - a decision which was later reversed - Wickremesinghe set an ambitious fiscal deficit goal of 4.4 per cent of GDP, compared with 5.3 per cent in 2018.

But he also boosted spending on state employees, pensioners and the armed forces and promised more funds for rural infrastructure, leading economists to doubt the targets. A presidential vote is expected later this year followed by a general election in 2020.

"Given the fact they have repayments coming up for sovereign bonds, it could lead to more pressure on foreign currency reserves. So, it's a near term negative for the tourism sector and also market sentiment as well," said Ruchir Desai, fund manager at Asia Frontier Capital, who co-manages the $16 million AFC Asia Frontier Fund.

"Valuations are cheap, no doubt... but until they get some kind of political unity which can result in stable policy-making, we will probably remain underweight (equities) until the elections."

Sri Lanka faces a likely collapse in tourism following Easter Sunday bomb attacks on churches and hotels, which would deal a severe blow to the island's economy and financial markets, and potentially force it to seek further IMF assistance.

Sri Lanka faces a likely collapse in tourism following Easter Sunday bomb attacks on churches and hotels, which would deal a severe blow to the island's economy and financial markets, and potentially force it to seek further IMF assistance. The International Monetary Fund extended last month a $1.5 billion loan for an extra year into 2020, a key step in keeping foreign investors involved in what so far this year has been a top-performing frontier debt market. But with growth, and therefore state revenues, now likely to slow significantly, the budget targets agreed with the IMF may have to be reviewed, and the government is expected to resist pressure for any spending cuts before elections expected later this year. There is even a possibility that more IMF money may be needed if foreign investment falls, adding to the hard currency gap left by plunging tourism receipts. "If growth slows a lot more and the budget deficit assumptions need to be reassessed, then they'll have to sit down and negotiate something more feasible," said Alex Holmes, Asia economist at Capital Economics. The Sri Lankan stock index dived 2.6 per cent on Tuesday in its first day of trading after the attacks that killed more than 300 people, while the heavily-managed rupee held steady. Tourism is Sri Lanka's third-largest and fastest growing source of foreign currency, after remittances and garment exports, accounting for almost $4.4 billion or 4.9 per cent of gross domestic product (GDP) in 2018. A fall in tourism receipts is bound to weaken the rupee over time. The central bank, whose coffers are too light to defend the currency through interventions, is likely to have to raise interest rates. This, in turn, would choke lending, hurting consumers and the investment plans of local businesses, while also making it more costly for the government to seek funding from foreign investors via bond markets. "The central bank may be forced to hike rates again this year," said Win Thin, global head of currency strategy at Brown Brothers Harriman (BBH). "With foreign reserves very low right now, the central bank cannot actively support the rupee." After falling 16 per cent against the US dollar last year to record lows, the rupee had gained 4.6 per cent this year as of last week. Sri Lankan bonds have been among the best performing globally, only bettered by Argentina and Chile. But the main stock index has lost about 10 per cent. × Weak finances Sri Lanka's external position was already precarious. To help fund a record $5.9 billion in foreign loans this year, the country successfully sold $2.4 billion in five-year and 10-year US dollar bonds last month, but that was right after the IMF extension and amid bets of looser monetary policy. In January, Sri Lanka used its reserves to repay debt worth $1 billion. It had about $5 billion left in February, the least since April 2017, and only enough to cover two months of imports and about two-thirds of its short-term external debt, according to BBH calculations. Colombo also needs to finance a current account deficit of about 3 per cent of GDP. Prime Minister Ranil Wickremesinghe is already facing heavy criticism domestically for higher taxes, and tight monetary and fiscal policies that have crimped growth to a 17-year low. Having emerged from a 51-day political crisis in which President Maithripala Sirisena sacked and replaced him with pro-China former president Mahinda Rajapaksa - a decision which was later reversed - Wickremesinghe set an ambitious fiscal deficit goal of 4.4 per cent of GDP, compared with 5.3 per cent in 2018. But he also boosted spending on state employees, pensioners and the armed forces and promised more funds for rural infrastructure, leading economists to doubt the targets. A presidential vote is expected later this year followed by a general election in 2020. "Given the fact they have repayments coming up for sovereign bonds, it could lead to more pressure on foreign currency reserves. So, it's a near term negative for the tourism sector and also market sentiment as well," said Ruchir Desai, fund manager at Asia Frontier Capital, who co-manages the $16 million AFC Asia Frontier Fund. "Valuations are cheap, no doubt... but until they get some kind of political unity which can result in stable policy-making, we will probably remain underweight (equities) until the elections."

Sri Lanka may need more IMF help as blasts threaten tourism

Pakistan's newly appointed advisor to the prime minister on finance, Abdul Hafeez Shaikh said on Saturday that talks with the <a href="https://www.wionews.com/south-asia/imf-team-to-visit-pakistan-this-month-to-discuss-support-package-210650">International Monetary Fund (IMF) to finalise a bailout package</a> would be held soon.&nbsp;

Shaikh was appointed as an advisor on Friday following the abrupt resignation of finance minister Asad Umar after returning from the US where he held talks with IMF for a crucial multi-billion dollar bailout package for cash-strapped Pakistan.

Islamabad is seeking $8 billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy.

Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries like China, Saudi Arabia and the UAE during the current fiscal year.

Shaikh, who took charge of the Ministry on Saturday, said in a brief talk that he would take forward the talks with the IMF.&nbsp;

"Both parties want to progress on the matter, and they have a commitment to us. I will be contacting the IMF mission head today evening," he said.

Shaikh also said that after holding initial talks with top officials of his ministry he realised that the next budget can be presented no earlier than May 24.

He also said that he has already tasked the officials to prepare a medium-term strategy paper to move the country forward.

Shaikh was also expected to meet Prime Minister Imran Khan to discuss the economic situation and work out a plan to rebuild the shattered economy.

His immediate task is to negotiate and favourable assistance package with the IMF and control inflation which cost his predecessor his job.

Pakistan's newly appointed advisor to the prime minister on finance, Abdul Hafeez Shaikh said on Saturday that talks with the International Monetary Fund (IMF) to finalise a bailout package would be held soon.

Pakistan's newly appointed advisor to the prime minister on finance, Abdul Hafeez Shaikh said on Saturday that talks with the International Monetary Fund (IMF) to finalise a bailout package would be held soon. Shaikh was appointed as an advisor on Friday following the abrupt resignation of finance minister Asad Umar after returning from the US where he held talks with IMF for a crucial multi-billion dollar bailout package for cash-strapped Pakistan. Islamabad is seeking $8 billion from the IMF to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries like China, Saudi Arabia and the UAE during the current fiscal year. Shaikh, who took charge of the Ministry on Saturday, said in a brief talk that he would take forward the talks with the IMF. "Both parties want to progress on the matter, and they have a commitment to us. I will be contacting the IMF mission head today evening," he said. Shaikh also said that after holding initial talks with top officials of his ministry he realised that the next budget can be presented no earlier than May 24. He also said that he has already tasked the officials to prepare a medium-term strategy paper to move the country forward. Shaikh was also expected to meet Prime Minister Imran Khan to discuss the economic situation and work out a plan to rebuild the shattered economy. His immediate task is to negotiate and favourable assistance package with the IMF and control inflation which cost his predecessor his job.

Talks with IMF for bailout package to start soon: Pakistan's advisor to PM Imran Khan

IMF warned of possiblity of Pak blacklisting by FATF. Watch complete video to know more.

India warns IMF against Pakistan bailout

International Monetary Fund (IMF) mission's visit to Pakistan for finalising a bailout package has been postponed until May.

"Both sides are still engaged in an intense conversation on the final details of that full agreement. So, the IMF mission is now more likely to visit Islamabad in May, not April," a government source, who did not want to be identified, told The Dawn.

Last month, Pakistan's Finance Minister Asad Umar had announced that the mission would visit Islamabad in April to sign an agreement.

However, the IMF, during spring meetings with Umar last week, had expressed its reservations over China's financial assistance to Pakistan.

The IMF has asked Islamabad to share details of loans that it has received from Beijing.

It has also asked for a written guarantee from Pakistan and China that IMF assistance will not be used to repay loans to China, reported Express Tribune.

Besides these, the mission has also asked Islamabad to make State Bank completely independent.

Notably, it will be the 14th package with the IMF, if released.

The Imran Khan government has professed that previous bailout packages could not be fully implemented owing to the conditions they came with.

Umar is expected to visit China later this month to discuss the IMF`s concerns over the China Pakistan Economic Corridor (CPEC).

International Monetary Fund (IMF) mission's visit to Pakistan for finalising a bailout package has been postponed until May. "Both sides are still engaged in an intense conversation on the final details of that full agreement.

International Monetary Fund (IMF) mission's visit to Pakistan for finalising a bailout package has been postponed until May. "Both sides are still engaged in an intense conversation on the final details of that full agreement. So, the IMF mission is now more likely to visit Islamabad in May, not April," a government source, who did not want to be identified, told The Dawn. Last month, Pakistan's Finance Minister Asad Umar had announced that the mission would visit Islamabad in April to sign an agreement. However, the IMF, during spring meetings with Umar last week, had expressed its reservations over China's financial assistance to Pakistan. The IMF has asked Islamabad to share details of loans that it has received from Beijing. It has also asked for a written guarantee from Pakistan and China that IMF assistance will not be used to repay loans to China, reported Express Tribune. Besides these, the mission has also asked Islamabad to make State Bank completely independent. Notably, it will be the 14th package with the IMF, if released. The Imran Khan government has professed that previous bailout packages could not be fully implemented owing to the conditions they came with. Umar is expected to visit China later this month to discuss the IMF`s concerns over the China Pakistan Economic Corridor (CPEC).

International Monetary Fund's visit to Pakistan postponed

A mission team from the <a href="https://www.wionews.com/world/pakistan-imf-to-reach-agreement-soon-on-bailout-package-finance-minister-205590">International Monetary Fund</a> (IMF) will travel to Pakistan this month, the IMF said on Monday, amid growing expectation that talks on a long-delayed bailout are due to be wrapped up soon.

Pakistan was last year expected to sign up for its 13th IMF bailout programme since the late 1980s but talks ground to a halt, with Pakistani officials saying the conditions attached to the proposed IMF loans could hurt economic growth.

Pakistan's macroeconomic outlook has deteriorated in recent months, with the central bank lowering growth forecasts and raising rates at a time when inflation is at a five-year high. The rupee currency has also lost about 35 per cent since December 2017.

"At the request of the authorities, an IMF mission will be going to Pakistan before the end of April to continue the discussions," the IMF said in a statement.

Pakistani Finance Minister Asad Umar earlier this month visited Washington for talks with the IMF, which on Monday described those talks as "constructive discussions".

The government of Prime Minister Imran Khan, who took power in August, has obtained temporary relief from close allies such as China and Saudi Arabia with short-term loans worth more than $10 billion to buffer foreign currency reserves and ease pressures on the country's current account.

But analysts have been saying an IMF bailout is inevitable, with Pakistan also facing an increasing fiscal crunch ahead of the annual budget spending review for the next financial year starting July 1.

"After today's IMF statement, the expectation is that the bailout is pretty much there," said Saad Hashemy, Chief Economist for Pakistani brokerage house Topline Securities.

But he added that there are questions regarding the time frame of when Pakistan would start receiving the money and the exact contours of the assistance programme.

"There are questions if there will be any further devaluations, how much interest rates will be hiked, what taxation measures are expected of Pakistan, and will there be any further increase in electricity or gas prices?" Hashemy added.

Khan's government is facing increasing anger from the population on the back of rising utility prices, many of which have been subsidized by successive cash-strapped governments.

Inflation was over 9.4 per cent in March, its highest since November 2013, with strong increases in food and energy, the two most sensitive items for most consumers.

The central bank forecasts growth at 3.5 to 4 per cent in the 12 months to end-June, well off a government target of 6.2 per cent.

A mission team from the International Monetary Fund (IMF) will travel to Pakistan this month, the IMF said on Monday, amid growing expectation that talks on a long-delayed bailout are due to be wrapped up soon.

A mission team from the International Monetary Fund (IMF) will travel to Pakistan this month, the IMF said on Monday, amid growing expectation that talks on a long-delayed bailout are due to be wrapped up soon. Pakistan was last year expected to sign up for its 13th IMF bailout programme since the late 1980s but talks ground to a halt, with Pakistani officials saying the conditions attached to the proposed IMF loans could hurt economic growth. Pakistan's macroeconomic outlook has deteriorated in recent months, with the central bank lowering growth forecasts and raising rates at a time when inflation is at a five-year high. The rupee currency has also lost about 35 per cent since December 2017. "At the request of the authorities, an IMF mission will be going to Pakistan before the end of April to continue the discussions," the IMF said in a statement. Pakistani Finance Minister Asad Umar earlier this month visited Washington for talks with the IMF, which on Monday described those talks as "constructive discussions". The government of Prime Minister Imran Khan, who took power in August, has obtained temporary relief from close allies such as China and Saudi Arabia with short-term loans worth more than $10 billion to buffer foreign currency reserves and ease pressures on the country's current account. But analysts have been saying an IMF bailout is inevitable, with Pakistan also facing an increasing fiscal crunch ahead of the annual budget spending review for the next financial year starting July 1. "After today's IMF statement, the expectation is that the bailout is pretty much there," said Saad Hashemy, Chief Economist for Pakistani brokerage house Topline Securities. But he added that there are questions regarding the time frame of when Pakistan would start receiving the money and the exact contours of the assistance programme. "There are questions if there will be any further devaluations, how much interest rates will be hiked, what taxation measures are expected of Pakistan, and will there be any further increase in electricity or gas prices?" Hashemy added. Khan's government is facing increasing anger from the population on the back of rising utility prices, many of which have been subsidized by successive cash-strapped governments. Inflation was over 9.4 per cent in March, its highest since November 2013, with strong increases in food and energy, the two most sensitive items for most consumers. The central bank forecasts growth at 3.5 to 4 per cent in the 12 months to end-June, well off a government target of 6.2 per cent.

IMF team to visit Pakistan this month in final bailout push

International Monetary Fund (IMF), who is currently considering a bailout <a href="https://www.wionews.com/south-asia/pakistan-foreign-minister-mahmood-qureshi-hails-chinas-support-in-challenging-times-204367">package for Pakistan</a>, has asked the latter to share details of loans that it has received from China.&nbsp;

According to the Express Tribune, IMF, during a recent meeting, voiced concern about Beijing's financial assistance to Islamabad.

However, Pakistan assured the IMF that there is no overlapping between the two programmes (IMF bailout and <a href="https://www.wionews.com/world/china-denies-cpec-intensified-pakistans-economic-risks-208789">CPEC)</a>, reported Dawn.&nbsp;

Pakistan Finance Minister Asad Umar has said that Pakistan and the IMF will reach a full agreement in the coming days.&nbsp;

"During the last two days, we have, more or less, reached an understanding. In the next day or two, we hope to reach a full agreement and then we will share the details with you," the finance minister said after a meeting with World Bank Group President David R Malpass and senior officials of IMF.&nbsp;

In the past few years, Pakistan and China have signed about half a dozen projects of worth $6.2 billion under CPEC.&nbsp;

Besides this, it has also granted commercial loans worth $6.5 billion. China has also deposited $2 billion in State Bank of Pakistan.&nbsp;

In October last year, Pakistan had formally requested the IMF for yet another economic assistance package.&nbsp;

The South-Asian nation is going through an economic crisis after the United States decided to cut off the financial aid to the country in the view of terrorist attacks.&nbsp;

The US views Pakistan as a safe haven for terrorists and insurgents, responsible for the 17-year-old war going on in neighbouring Afghanistan.&nbsp;

Pentagon, in September, had reportedly cut off aid worth $300 million due to growing concerns regarding Islamabad`s failure to tackle the militants.&nbsp;

In August, the US had also slashed security-oriented financial aid to Pakistan.&nbsp;

Pakistan, however, has sought help from several countries including Saudi Arabia and China as its economy has been in limbo for a long time.&nbsp;

It secured loans up to $6 billion from Saudi Arabia on the sidelines of the Future Investment Initiative conference in Riyadh in October.&nbsp;

Islamabad has been seeking commercial loans of $2 billion from Beijing.&nbsp;

China has already refused to provide a balance of payment (BoP) support to Pakistan.

International Monetary Fund (IMF), who is currently considering a bailout package for Pakistan, has asked the latter to share details of loans that it has received from China.

International Monetary Fund (IMF), who is currently considering a bailout package for Pakistan, has asked the latter to share details of loans that it has received from China. According to the Express Tribune, IMF, during a recent meeting, voiced concern about Beijing's financial assistance to Islamabad. However, Pakistan assured the IMF that there is no overlapping between the two programmes (IMF bailout and CPEC), reported Dawn. Pakistan Finance Minister Asad Umar has said that Pakistan and the IMF will reach a full agreement in the coming days. "During the last two days, we have, more or less, reached an understanding. In the next day or two, we hope to reach a full agreement and then we will share the details with you," the finance minister said after a meeting with World Bank Group President David R Malpass and senior officials of IMF. In the past few years, Pakistan and China have signed about half a dozen projects of worth $6.2 billion under CPEC. Besides this, it has also granted commercial loans worth $6.5 billion. China has also deposited $2 billion in State Bank of Pakistan. In October last year, Pakistan had formally requested the IMF for yet another economic assistance package. The South-Asian nation is going through an economic crisis after the United States decided to cut off the financial aid to the country in the view of terrorist attacks. The US views Pakistan as a safe haven for terrorists and insurgents, responsible for the 17-year-old war going on in neighbouring Afghanistan. Pentagon, in September, had reportedly cut off aid worth $300 million due to growing concerns regarding Islamabad`s failure to tackle the militants. In August, the US had also slashed security-oriented financial aid to Pakistan. Pakistan, however, has sought help from several countries including Saudi Arabia and China as its economy has been in limbo for a long time. It secured loans up to $6 billion from Saudi Arabia on the sidelines of the Future Investment Initiative conference in Riyadh in October. Islamabad has been seeking commercial loans of $2 billion from Beijing. China has already refused to provide a balance of payment (BoP) support to Pakistan.

International Monetary Fund asks Pakistan to share details of loans from China

International Monetary Fund asked Pakistan to disclose the complete details of loan it took from China. Watch complete video to know more.

IMF asks for detail of Pakistan's loan from China

A new trade war sparked by <a href="https://www.wionews.com/world/white-house-gets-report-that-could-trigger-auto-tariffs-198123">US automotive tariffs</a> has the potential to do much more damage to global economic growth than the US-China trade conflict has done, International Monetary Fund chief economist Gita Gopinath said on Thursday.

Gopinath told Reuters in an interview that such a conflict would affect exports from many more countries and impose retaliatory duties on US goods from numerous trading partners.

"We are concerned about what auto tariffs would do to the global economy at a time when we are more in the recovery phase," Gopinath said on the sidelines of the IMF and World Bank annual meetings in Washington.

Should trade conflicts spill over into the automotive sector, it would also disrupt larger parts of global manufacturing supply chains, she said.

"So that would actually be far more costly for the world economy than just the US-China trade tensions that we had," said Gopinath, an Indian-born, Harvard University professor.

US President Donald Trump has threatened to levy tariffs of some 25 per cent on imported vehicles and auto parts on national security grounds, invoking a 1962 trade law aimed at safeguarding the Cold War-era military industrial base.

Trump has openly admitted that he is using the threat of auto tariffs to draw trading partners including Japan and the European Union into trade negotiations. But he also has recently threatened to impose car duties on Mexico unless it improves security at the US border.

The Commerce Department has submitted recommendations of its "Section 232" study into whether automotive imports constitute a threat to national security to the White House but has not revealed its contents. Under the Section 232 provision, Trump has until about May 17 to act on any automotive tariff recommendations contained in the report.

Should he impose tariffs, they would hit hard in the second half of 2019, about the time when the IMF is predicting a rebound in global growth due to a pause in interest rate hikes by the Federal Reserve and other major central banks.

According to the IMF's World Economic Outlook released on Tuesday, the growth rebound is set to continue into 2020, but the Fund has warned that the outlook was "precarious" and vulnerable to numerous risks.

Gopinath said the trade was the biggest among these risks, which also include rising corporate and sovereign debt, stresses in some large emerging markets and a chaotic exit of Britain from the European Union.

US-China lift?

But she said that a trade deal between the United States and China had the potential to lift global growth if tariffs on Chinese and US goods are removed. The Fund's latest forecasts assume that 25 per cent tariffs on $50 billion worth of Chinese goods and 10 per cent tariffs on $200 billion in Chinese goods remain in place.

US and Chinese negotiators are working to try to complete an agreement.

"If it turned out that all tariffs were lifted between China and the US that were put in place last year, then that would be a positive to the outlook."

She said the impact on growth is highly dependent on the contents of the deal, and a deal that fails to resolve the tensions for the long term could leave a cloud of uncertainty hanging over business investment - a factor that sapped growth in 2018.

"We've been pushing for an early, durable resolution of the trade tensions," she said. "Not something that will be revisited every three or six months."

A new trade war sparked by US automotive tariffs has the potential to do much more damage to global economic growth than the US-China trade conflict has done, International Monetary Fund chief economist Gita Gopinath said on Thursday.

A new trade war sparked by US automotive tariffs has the potential to do much more damage to global economic growth than the US-China trade conflict has done, International Monetary Fund chief economist Gita Gopinath said on Thursday. Gopinath told Reuters in an interview that such a conflict would affect exports from many more countries and impose retaliatory duties on US goods from numerous trading partners. "We are concerned about what auto tariffs would do to the global economy at a time when we are more in the recovery phase," Gopinath said on the sidelines of the IMF and World Bank annual meetings in Washington. Should trade conflicts spill over into the automotive sector, it would also disrupt larger parts of global manufacturing supply chains, she said. "So that would actually be far more costly for the world economy than just the US-China trade tensions that we had," said Gopinath, an Indian-born, Harvard University professor. US President Donald Trump has threatened to levy tariffs of some 25 per cent on imported vehicles and auto parts on national security grounds, invoking a 1962 trade law aimed at safeguarding the Cold War-era military industrial base. Trump has openly admitted that he is using the threat of auto tariffs to draw trading partners including Japan and the European Union into trade negotiations. But he also has recently threatened to impose car duties on Mexico unless it improves security at the US border. The Commerce Department has submitted recommendations of its "Section 232" study into whether automotive imports constitute a threat to national security to the White House but has not revealed its contents. Under the Section 232 provision, Trump has until about May 17 to act on any automotive tariff recommendations contained in the report. Should he impose tariffs, they would hit hard in the second half of 2019, about the time when the IMF is predicting a rebound in global growth due to a pause in interest rate hikes by the Federal Reserve and other major central banks. According to the IMF's World Economic Outlook released on Tuesday, the growth rebound is set to continue into 2020, but the Fund has warned that the outlook was "precarious" and vulnerable to numerous risks. Gopinath said the trade was the biggest among these risks, which also include rising corporate and sovereign debt, stresses in some large emerging markets and a chaotic exit of Britain from the European Union. US-China lift? But she said that a trade deal between the United States and China had the potential to lift global growth if tariffs on Chinese and US goods are removed. The Fund's latest forecasts assume that 25 per cent tariffs on $50 billion worth of Chinese goods and 10 per cent tariffs on $200 billion in Chinese goods remain in place. US and Chinese negotiators are working to try to complete an agreement. "If it turned out that all tariffs were lifted between China and the US that were put in place last year, then that would be a positive to the outlook." She said the impact on growth is highly dependent on the contents of the deal, and a deal that fails to resolve the tensions for the long term could leave a cloud of uncertainty hanging over business investment - a factor that sapped growth in 2018. "We've been pushing for an early, durable resolution of the trade tensions," she said. "Not something that will be revisited every three or six months."

Auto tariff war would hurt more than US-China fight: IMF chief economist

Noting that the level of non-performing loans in India remains high, the International Monetary Fund has favoured bolstering the level of capitalisation of some banks, particularly government-owned banks.&nbsp;

Anna Ilyina, Division Chief of IMF Monetary and Capital Markets Department, said Wednesday that bolstering the level of capitalisation was one of the recommendations of the Financial Sector Assessment Programme (FSAP) for India.&nbsp;

"The level of non-performing loans (NPLs) in India remains high. And the level of the capitalisation of some banks, particularly government-owned banks, should be bolstered," said Ilyina.&nbsp;

"There were some steps that were taken by the authorities to boost capital buffers in banks and also to improve governance in state-owned banks that have had some positive impact," Ilyina said.

The institutional mechanisms for resolution and the recognition of NPLs are, of course, an extremely important part of the process of cleaning up the banking system of non-performing loans, she said adding that the authorities should continue working along these lines.

Tobias Adrian, Financial Counsellor and Director, Monetary and Capital Markets Department of the IMF, said that there continues to be a high stock of Non-performing Assets in India.&nbsp;

"There has been some progression, but we would welcome further progress on the non-performing assets in India,"&nbsp;he said responding to a question on Indian banking system.&nbsp;

The Indian government in February said bad loans fell by Rs 31,168 crore in April-December 2018-19 compared to NPAs worth Rs 8,95,601 crore at March-end 2018.&nbsp;

Noting that the level of non-performing loans in India remains high, the International Monetary Fund has favoured bolstering the level of capitalisation of some banks, particularly government-owned banks.

Noting that the level of non-performing loans in India remains high, the International Monetary Fund has favoured bolstering the level of capitalisation of some banks, particularly government-owned banks. Anna Ilyina, Division Chief of IMF Monetary and Capital Markets Department, said Wednesday that bolstering the level of capitalisation was one of the recommendations of the Financial Sector Assessment Programme (FSAP) for India. "The level of non-performing loans (NPLs) in India remains high. And the level of the capitalisation of some banks, particularly government-owned banks, should be bolstered," said Ilyina. "There were some steps that were taken by the authorities to boost capital buffers in banks and also to improve governance in state-owned banks that have had some positive impact," Ilyina said. The institutional mechanisms for resolution and the recognition of NPLs are, of course, an extremely important part of the process of cleaning up the banking system of non-performing loans, she said adding that the authorities should continue working along these lines. Tobias Adrian, Financial Counsellor and Director, Monetary and Capital Markets Department of the IMF, said that there continues to be a high stock of Non-performing Assets in India. "There has been some progression, but we would welcome further progress on the non-performing assets in India," he said responding to a question on Indian banking system. The Indian government in February said bad loans fell by Rs 31,168 crore in April-December 2018-19 compared to NPAs worth Rs 8,95,601 crore at March-end 2018.

India needs to bolster level of capitalisation of government-owned banks: IMF

World governments are working on recognising a Venezuelan government, a key step before international aid can flow into the crisis-stricken country, IMF chief Christine Lagarde said Thursday.

The South American oil-producer is facing an economic and humanitarian crisis that resembles the collapse of a country at war.

But without a recognised government, after Venezuela's national assembly leader Juan Guaido in late January challenged the legitimacy of embattled leader Nicolas Maduro, the IMF, World Bank and other institutions cannot help with financing.

"We are really very, very concerned about the humanitarian crisis that is unfolding in front of our eyes in Venezuela," Lagarde said.

"We are waiting to be guided by our membership and I know that it is in process at the moment as we speak from quite a few members. As soon as that happens we will follow through."

The IMF has had no direct access to events on the ground as the global crisis-lender had not been welcome in Venezuela for about 15 years, she said.

However, "We have done as much preparatory work as we could... in order to be prepared to act as quickly and as swiftly as we can," Lagarde said.

The IMF estimates that Venezuela’s economy will contract by one-fourth in 2019, and a further 10 per cent in 2020 -- a greater collapse than projected in the October 2018, along with unprecedented hyperinflation of 10 million per cent.

She stressed that the international response to the Venezuela crisis -- which is facing shortages of food and medicine, power outages, and an exodus of its citizens -- would have to be a "multi-pronged effort" by many institutions.

Her comments echoed those of newly-installed World Bank President David Malpass, who also told reporters that the institution's shareholders would decide when and how to engage with Caracas.

Malpass also said Venezuela was of "deep concern" and was facing a "humanitarian crisis."

"As far as the political side, we will be guided by the international community and the views of our shareholders," he added. "This is something that is not chosen by the bank but by the shareholders of the bank."

The IMF said Wednesday it would have no contact with Caracas, and would not allow the country access to its IMF-held reserves, until the international community recognised a government in Caracas.

The United States is among about four dozen countries to recognise Guaido, and Vice President Mike Pence on Wednesday called on the UN to do so as well.

The Organisation of American States' permanent council and the Inter-American Development Bank have recognised Guaido's representative.

 
&nbsp;

World governments are working on recognising a Venezuelan government, a key step before international aid can flow into the crisis-stricken country, IMF chief Christine Lagarde said Thursday.

World governments are working on recognising a Venezuelan government, a key step before international aid can flow into the crisis-stricken country, IMF chief Christine Lagarde said Thursday. The South American oil-producer is facing an economic and humanitarian crisis that resembles the collapse of a country at war. But without a recognised government, after Venezuela's national assembly leader Juan Guaido in late January challenged the legitimacy of embattled leader Nicolas Maduro, the IMF, World Bank and other institutions cannot help with financing. "We are really very, very concerned about the humanitarian crisis that is unfolding in front of our eyes in Venezuela," Lagarde said. "We are waiting to be guided by our membership and I know that it is in process at the moment as we speak from quite a few members. As soon as that happens we will follow through." The IMF has had no direct access to events on the ground as the global crisis-lender had not been welcome in Venezuela for about 15 years, she said. However, "We have done as much preparatory work as we could... in order to be prepared to act as quickly and as swiftly as we can," Lagarde said. The IMF estimates that Venezuela’s economy will contract by one-fourth in 2019, and a further 10 per cent in 2020 -- a greater collapse than projected in the October 2018, along with unprecedented hyperinflation of 10 million per cent. She stressed that the international response to the Venezuela crisis -- which is facing shortages of food and medicine, power outages, and an exodus of its citizens -- would have to be a "multi-pronged effort" by many institutions. Her comments echoed those of newly-installed World Bank President David Malpass, who also told reporters that the institution's shareholders would decide when and how to engage with Caracas. Malpass also said Venezuela was of "deep concern" and was facing a "humanitarian crisis." "As far as the political side, we will be guided by the international community and the views of our shareholders," he added. "This is something that is not chosen by the bank but by the shareholders of the bank." The IMF said Wednesday it would have no contact with Caracas, and would not allow the country access to its IMF-held reserves, until the international community recognised a government in Caracas. The United States is among about four dozen countries to recognise Guaido, and Vice President Mike Pence on Wednesday called on the UN to do so as well. The Organisation of American States' permanent council and the Inter-American Development Bank have recognised Guaido's representative.

IMF awaits decision on Venezuela government recognition

Pakistan Finance Minister <a href="https://www.wionews.com/south-asia/pakistans-economy-out-of-crisis-phase-finance-minister-208906">Asad Umar</a> on Wednesday (local time) held meetings with World Bank Group President David R Malpass and senior officials of the International Monetary Fund (IMF), in a bid to seek a three-year bailout package.

The delegation led by the finance minister which included State Bank of Pakistan Governor Tariq Bajwa, Finance Secretary Younas Dagha and Economic Affairs Division Secretary Noor Ahmed, reached Washington for a two-day meeting.

This comes a day after the IMF in its yearly World Economic Outlook reportedly projected that Pakistan's growth may remain at 2.5 per cent till 2024 unless Islamabad undertakes indispensable economic reforms.

Last year in October, Pakistan formally requested the IMF for yet another economic assistance package.

The South-Asian nation is going through an economic crisis after the United States decided to cut off the financial aid to the country in the view of terrorist attacks.

The US views Pakistan as a safe haven for the terrorists and insurgents, responsible for the 17-years-old war going on in the neighbouring country Afghanistan.

Pentagon, in September, had reportedly cut off aid worth $300 million due&nbsp;to the growing concerns regarding the Islamabad's failure to tackle the militants.

In August, the Congress had also slashed the security-oriented financial aid to Pakistan.

Pakistan, however, has sought help from several countries including Saudi Arabia and China as its economy has been in limbo for a long time.

However, Pakistan secured loans up to $6 billion from Saudi Arabia on the sidelines of the Future Investment Initiative conference in Riyadh in October.

Islamabad has been seeking commercial loans of $2 billion&nbsp;from Beijing. China has already refused to provide a balance of payment (BoP) support to Pakistan.&nbsp;

Pakistan Finance Minister Asad Umar on Wednesday (local time) held meetings with World Bank Group President David R Malpass and senior officials of the International Monetary Fund (IMF), in a bid to seek a three-year bailout package.

Pakistan Finance Minister Asad Umar on Wednesday (local time) held meetings with World Bank Group President David R Malpass and senior officials of the International Monetary Fund (IMF), in a bid to seek a three-year bailout package. The delegation led by the finance minister which included State Bank of Pakistan Governor Tariq Bajwa, Finance Secretary Younas Dagha and Economic Affairs Division Secretary Noor Ahmed, reached Washington for a two-day meeting. This comes a day after the IMF in its yearly World Economic Outlook reportedly projected that Pakistan's growth may remain at 2.5 per cent till 2024 unless Islamabad undertakes indispensable economic reforms. Last year in October, Pakistan formally requested the IMF for yet another economic assistance package. The South-Asian nation is going through an economic crisis after the United States decided to cut off the financial aid to the country in the view of terrorist attacks. The US views Pakistan as a safe haven for the terrorists and insurgents, responsible for the 17-years-old war going on in the neighbouring country Afghanistan. Pentagon, in September, had reportedly cut off aid worth $300 million due to the growing concerns regarding the Islamabad's failure to tackle the militants. In August, the Congress had also slashed the security-oriented financial aid to Pakistan. Pakistan, however, has sought help from several countries including Saudi Arabia and China as its economy has been in limbo for a long time. However, Pakistan secured loans up to $6 billion from Saudi Arabia on the sidelines of the Future Investment Initiative conference in Riyadh in October. Islamabad has been seeking commercial loans of $2 billion from Beijing. China has already refused to provide a balance of payment (BoP) support to Pakistan.

Pakistan Finance minister Asad Umar held meetings with World Bank leaders, seeking bailout

Finance Minister Asad Umar said on Monday that <a href="https://www.wionews.com/world/prevent-imf-bailout-to-pakistan-to-repay-chinese-debt-208726">Pakistan's economy</a> was out of the crisis phase even as the cash-strapped country's economic growth is projected to slump further to 3.9 per cent in the fiscal year 2019 from 5.2 per cent in 2018.

"The crisis phase for the economy is over, however, we are still in the stabilisation phase," Umar was quoted as saying by Geo TV.

He said this stabilisation phase would continue for the next one and a half years as he compared Pakistan's economy to a patient in the ICU who had been treated and now brought back to a normal ward, the channel reported.

"The situation right now is that we are not taking loans to pay off past loans, but to pay off interest," he said.

Umar said Pakistan was facing three main problems on the economic front. "We are stuck with the fiscal deficit, current account deficit and saving and investment gap," he said.

He called on the Federal Board of Revenue (FBR) to simplify the tax return system with easier forms and lesser questions.

"The amount of questions FBR asks you for your returns is more than those asked when you are accepting a marriage proposal for your daughter," Umar said.

He said Pakistan's talks with the International Monetary Fund (IMF) for a financial package were in its final stage.

On March 16, Umar had hinted that bailout package talks with the IMF are in their final stages and the government will have further negotiations with the newly appointed IMF mission chief before reaching an agreement.

Cash-strapped Pakistan is seeking $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. With the generous Chinese assistance, Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries during the current fiscal year.

While China has pumped-in $4.1 billion, Pakistan has got $3 billion from Saudi Arabia and $2 billion from the United Arab Emirates (UAE).

In its flagship economic publication titled "Asian Development Outlook 2019," the Manila-based Asian Development Bank said Pakistan's economic growth decelerated in the fiscal year 2018 despite revived agriculture.

Pakistan's GDP growth is forecast to decelerate further to 3.9 per cent in FY2019 as macroeconomic challenges continue and despite steps to tighten fiscal and monetary policies to rein in high and unsustainable twin deficits.

Continued fiscal consolidation in FY2020 will keep growth subdued at 3.6 per cent, the ADB said.&nbsp;

Finance Minister Asad Umar said on Monday that Pakistan's economy was out of the crisis phase even as the cash-strapped country's economic growth is projected to slump further to 3.

Finance Minister Asad Umar said on Monday that Pakistan's economy was out of the crisis phase even as the cash-strapped country's economic growth is projected to slump further to 3.9 per cent in the fiscal year 2019 from 5.2 per cent in 2018. "The crisis phase for the economy is over, however, we are still in the stabilisation phase," Umar was quoted as saying by Geo TV. He said this stabilisation phase would continue for the next one and a half years as he compared Pakistan's economy to a patient in the ICU who had been treated and now brought back to a normal ward, the channel reported. "The situation right now is that we are not taking loans to pay off past loans, but to pay off interest," he said. Umar said Pakistan was facing three main problems on the economic front. "We are stuck with the fiscal deficit, current account deficit and saving and investment gap," he said. He called on the Federal Board of Revenue (FBR) to simplify the tax return system with easier forms and lesser questions. "The amount of questions FBR asks you for your returns is more than those asked when you are accepting a marriage proposal for your daughter," Umar said. He said Pakistan's talks with the International Monetary Fund (IMF) for a financial package were in its final stage. On March 16, Umar had hinted that bailout package talks with the IMF are in their final stages and the government will have further negotiations with the newly appointed IMF mission chief before reaching an agreement. Cash-strapped Pakistan is seeking $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. With the generous Chinese assistance, Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries during the current fiscal year. While China has pumped-in $4.1 billion, Pakistan has got $3 billion from Saudi Arabia and $2 billion from the United Arab Emirates (UAE). In its flagship economic publication titled "Asian Development Outlook 2019," the Manila-based Asian Development Bank said Pakistan's economic growth decelerated in the fiscal year 2018 despite revived agriculture. Pakistan's GDP growth is forecast to decelerate further to 3.9 per cent in FY2019 as macroeconomic challenges continue and despite steps to tighten fiscal and monetary policies to rein in high and unsustainable twin deficits. Continued fiscal consolidation in FY2020 will keep growth subdued at 3.6 per cent, the ADB said.

Pakistan's economy out of crisis phase: Finance Minister

Three influential US lawmakers have urged the Trump administration to oppose the proposed multi-billion bailout package being sought by<a href="https://www.google.com/url?q=https://www.wionews.com/south-asia/imf-likely-to-give-6-billion-us-dollar-bailout-package-to-pakistan-197059&amp;sa=U&amp;ved=0ahUKEwjJjra__L_hAhVb6XMBHbH_BoUQFggFMAA&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw2Yz2Y6jnL--0SFpiK5pHdQ"> Pakistan </a>from <a href="https://www.google.com/url?q=https://www.wionews.com/world/pakistan-imf-to-reach-agreement-soon-on-bailout-package-finance-minister-205590&amp;sa=U&amp;ved=0ahUKEwjJjra__L_hAhVb6XMBHbH_BoUQFggIMAE&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw0aHiv5FTSk9KCdrOKhs5-z">International Monetary Fund </a>(IMF) arguing it could be used to repay the Chinese debt.

In a letter to Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, the bipartisan group of three lawmakers Ted Yoho, Ami Bera and George Holding&nbsp;expressed their "deep concern" over the likely use of IMF's bailout package to repay the massive Chinese debt that Pakistan has accumulated under<a href="https://www.google.com/url?q=https://www.wionews.com/south-asia/pakistan-imf-close-to-reaching-deal-on-bailout-207334&amp;sa=U&amp;ved=0ahUKEwjJjra__L_hAhVb6XMBHbH_BoUQFggLMAI&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw09oE_u3daZZ4sFEyG4Qn2l"> China Pakistan Economic Corridor (CPEC)</a>.

We write to express our deep concern over attempts made by the Government of Pakistan to seek a bailout deal with the International Monetary Fund to retrieve debts incurred from predatory Chinese infrastructure projects," the Congressmen said in a letter dated April 5.

China, they said, is investing $62 billion in Pakistan under CPEC. "Its debt repayment and profit repatriation terms are not transparent and have understandably raised concerns inside Pakistan,"&nbsp;they said.

"Illustrative of the dangers of China's debt-trap diplomacy, Sri Lanka became unable to make payments on the Chinese debt it had taken for the Hambantota Port Development Project," the letter said.

Under "heavy pressure" from China, Sri Lanka ultimately handed over 1,500 acres of land around the port for a 99-year lease, they said. 
"The impact of Chinese predatory financing in Pakistan, as already seen in the case of the Hambantota port in Sri Lanka, cannot be ruled out,"&nbsp;the letter said.

Asserting that there is a "critical need for transparency in projects" including loan terms and contractual details, the Congressmen said "unless the terms are subjected to strict scrutiny" the Islamabad may use the IMF bailout package to repay Pakistan's debt obligations to China.

Noting that Pakistan's history with the IMF gives further cause for concern, the US lawmakers said having spent 22 of the past 30 years in a dozen different IMF bailout programs, Pakistan has failed to carry out necessary structural economic problems.

"Another bailout that fails to provide transparency and address issues of balance of payment, high fiscal deficit, and unsustainable debt will again be doomed to fail, instead of enriching China,"&nbsp;the three Congressmen warned.

They said it is critical that the US continues to work to counter China's attempts to hold "hostage countries that are unable to repay unfavourable loans" in an attempt to further their geostrategic goals.&nbsp;

Three influential US lawmakers have urged the Trump administration to oppose the proposed multi-billion bailout package being sought by Pakistan from International Monetary Fund (IMF) arguing it could be used to repay the Chinese debt.

Three influential US lawmakers have urged the Trump administration to oppose the proposed multi-billion bailout package being sought by Pakistan from International Monetary Fund (IMF) arguing it could be used to repay the Chinese debt. In a letter to Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, the bipartisan group of three lawmakers Ted Yoho, Ami Bera and George Holding expressed their "deep concern" over the likely use of IMF's bailout package to repay the massive Chinese debt that Pakistan has accumulated under China Pakistan Economic Corridor (CPEC). We write to express our deep concern over attempts made by the Government of Pakistan to seek a bailout deal with the International Monetary Fund to retrieve debts incurred from predatory Chinese infrastructure projects," the Congressmen said in a letter dated April 5. China, they said, is investing $62 billion in Pakistan under CPEC. "Its debt repayment and profit repatriation terms are not transparent and have understandably raised concerns inside Pakistan," they said. "Illustrative of the dangers of China's debt-trap diplomacy, Sri Lanka became unable to make payments on the Chinese debt it had taken for the Hambantota Port Development Project," the letter said. Under "heavy pressure" from China, Sri Lanka ultimately handed over 1,500 acres of land around the port for a 99-year lease, they said. "The impact of Chinese predatory financing in Pakistan, as already seen in the case of the Hambantota port in Sri Lanka, cannot be ruled out," the letter said. Asserting that there is a "critical need for transparency in projects" including loan terms and contractual details, the Congressmen said "unless the terms are subjected to strict scrutiny" the Islamabad may use the IMF bailout package to repay Pakistan's debt obligations to China. Noting that Pakistan's history with the IMF gives further cause for concern, the US lawmakers said having spent 22 of the past 30 years in a dozen different IMF bailout programs, Pakistan has failed to carry out necessary structural economic problems. "Another bailout that fails to provide transparency and address issues of balance of payment, high fiscal deficit, and unsustainable debt will again be doomed to fail, instead of enriching China," the three Congressmen warned. They said it is critical that the US continues to work to counter China's attempts to hold "hostage countries that are unable to repay unfavourable loans" in an attempt to further their geostrategic goals.

Prevent IMF bailout to Pakistan to repay 'Chinese debt'

Pakistan’s finance minister on Friday ruled out a further devaluation of the rupee, which has lost about 25 per cent of its value over the past year, urging people to invest in the stock market and not waste money buying dollars.

Since coming to power in August, much of the government’s focus has been in staving off a balance of payments crisis. It is in talks with the International Monetary Fund over a 13th bailout since the 1980s which is expected in the next few weeks.

Consumer price inflation rose in March to its highest since November 2013. Energy costs, in particular, have risen sharply, hit by a series of a devaluation.

"Today, State Bank of Pakistan has given a categorical statement that rupee is in equilibrium. The central bank cannot speak clearer than this,” Finance Minister Asad Umar said in a speech at the Pakistan Stock Exchange shown on television.

"There is no reason for big devaluations."

He added that there were no demands for what the exchange rate should be in the talks with the IMF.

Traditionally, Pakistan has kept its exchange rate over-valued, incurring losses to the economy, the finance minister said. The rupee should be aligned with its fundamentals and its benchmark should be the real effective exchange rate (REER), he added.

The minister advised the people not to waste money buying dollars, but instead invest in the stock market.

"One should not say the rupee would comfortably become stable or inflexible in terms of movement. It will remain flexible, but one should not expect big devaluation,"&nbsp;Fawad Khan, head of Research at BMA Capital Management Limited, told Reuters.

The finance minister’s remarks would help bring stability, Khan said.

"Overall, the statement has been taken positively by the equity market,"&nbsp;he told Reuters.

The question of whether the finance minister should have given this statement or not was another issue, Khan said because the management of the exchange rate is the joint responsibility of the ministry of finance and the central bank.

Pakistan’s finance minister on Friday ruled out a further devaluation of the rupee, which has lost about 25 per cent of its value over the past year, urging people to invest in the stock market and not waste money buying dollars.

Pakistan’s finance minister on Friday ruled out a further devaluation of the rupee, which has lost about 25 per cent of its value over the past year, urging people to invest in the stock market and not waste money buying dollars. Since coming to power in August, much of the government’s focus has been in staving off a balance of payments crisis. It is in talks with the International Monetary Fund over a 13th bailout since the 1980s which is expected in the next few weeks. Consumer price inflation rose in March to its highest since November 2013. Energy costs, in particular, have risen sharply, hit by a series of a devaluation. "Today, State Bank of Pakistan has given a categorical statement that rupee is in equilibrium. The central bank cannot speak clearer than this,” Finance Minister Asad Umar said in a speech at the Pakistan Stock Exchange shown on television. "There is no reason for big devaluations." He added that there were no demands for what the exchange rate should be in the talks with the IMF. Traditionally, Pakistan has kept its exchange rate over-valued, incurring losses to the economy, the finance minister said. The rupee should be aligned with its fundamentals and its benchmark should be the real effective exchange rate (REER), he added. The minister advised the people not to waste money buying dollars, but instead invest in the stock market. "One should not say the rupee would comfortably become stable or inflexible in terms of movement. It will remain flexible, but one should not expect big devaluation," Fawad Khan, head of Research at BMA Capital Management Limited, told Reuters. The finance minister’s remarks would help bring stability, Khan said. "Overall, the statement has been taken positively by the equity market," he told Reuters. The question of whether the finance minister should have given this statement or not was another issue, Khan said because the management of the exchange rate is the joint responsibility of the ministry of finance and the central bank.

Pakistan finance minister Asad Umar rules out further devaluation

Pakistan Finance Minister Asad Umar said negotiations with International Monetary Fund (IMF) has reached its final stage with settlement of almost all issues related to a bailout package.

"We are very close to each other and there is no fundamental difference," the minister was quoted as saying by Geo News while addressing the media on Monday after the launch of the State Bank of Pakistan's Electronic Money Institutions (EMIs) Regulations."

Similarly, the main issue of how to reduce current account deficit had also been sorted out. Now there was no issue with unbridgeable differences," Umar said.

The Finance Minister noted that the talks were held to resolve issues related to the timing and sequence of the signing of an agreement with the IMF.

The Minister said that the IMF programme usually lasted for three years and it would disburse loan to Pakistan in three tranches."If the IMF sanctioned $6 billion package, Pakistan would get $2 billion during the current year and in case $9 billion, it would receive $3 billion as first tranche," he added.

After the agreement is signed with IMF, Pakistan would be able to get more funds from the international bond market, Umar said.

The Minister recalled that previously, Saudi Arabia had disbursed a total amount of $3 billion, China had transferred a commercial loan of $2 billion, while the United Arab Emirates (UAE) remitted $2 billion, as an aid to the debt-ridden country.IMF mission Chief Ernesto Ramirez Rigo arrived on a maiden visit to Islamabad on March 26.

Quoting sources, ARY News reported that Pakistan intended to seek for a loan worth $6 to $8 billion from IMF. However, a final agreement between the two is expected to finalise when the IMF and the World Bank holds a session in April in Washington.

Geo News confirmed that Pakistan`s consumer price inflation rose to 9.41 per cent year-on-year, up from 8.21 per cent in February, after citing a data released by the Bureau of Statistics on Monday.

Last week, Pakistan`s Central Bank lifted its key policy rate by 50 basis points to 10.75 per cent, citing continuing inflationary pressures as well as high fiscal and current account deficits.

Consumer price inflation has jumped sharply over the past year, climbing from under four per cent at the start of 2018, lifted by sharp rises in food, fuel and transport costs that have squeezed household budgets.

Pakistan Finance Minister Asad Umar said negotiations with International Monetary Fund (IMF) has reached its final stage with settlement of almost all issues related to a bailout package.

Pakistan Finance Minister Asad Umar said negotiations with International Monetary Fund (IMF) has reached its final stage with settlement of almost all issues related to a bailout package. "We are very close to each other and there is no fundamental difference," the minister was quoted as saying by Geo News while addressing the media on Monday after the launch of the State Bank of Pakistan's Electronic Money Institutions (EMIs) Regulations." Similarly, the main issue of how to reduce current account deficit had also been sorted out. Now there was no issue with unbridgeable differences," Umar said. The Finance Minister noted that the talks were held to resolve issues related to the timing and sequence of the signing of an agreement with the IMF. The Minister said that the IMF programme usually lasted for three years and it would disburse loan to Pakistan in three tranches."If the IMF sanctioned $6 billion package, Pakistan would get $2 billion during the current year and in case $9 billion, it would receive $3 billion as first tranche," he added. After the agreement is signed with IMF, Pakistan would be able to get more funds from the international bond market, Umar said. The Minister recalled that previously, Saudi Arabia had disbursed a total amount of $3 billion, China had transferred a commercial loan of $2 billion, while the United Arab Emirates (UAE) remitted $2 billion, as an aid to the debt-ridden country.IMF mission Chief Ernesto Ramirez Rigo arrived on a maiden visit to Islamabad on March 26. Quoting sources, ARY News reported that Pakistan intended to seek for a loan worth $6 to $8 billion from IMF. However, a final agreement between the two is expected to finalise when the IMF and the World Bank holds a session in April in Washington. Geo News confirmed that Pakistan`s consumer price inflation rose to 9.41 per cent year-on-year, up from 8.21 per cent in February, after citing a data released by the Bureau of Statistics on Monday. Last week, Pakistan`s Central Bank lifted its key policy rate by 50 basis points to 10.75 per cent, citing continuing inflationary pressures as well as high fiscal and current account deficits. Consumer price inflation has jumped sharply over the past year, climbing from under four per cent at the start of 2018, lifted by sharp rises in food, fuel and transport costs that have squeezed household budgets.

Pakistan, IMF close to reaching deal on bailout

Pakistan, facing acute financial woes, will soon reach an agreement with the <a href="https://www.wionews.com/south-asia/imf-likely-to-give-6-billion-us-dollar-bailout-package-to-pakistan-197059">IMF on a bailout plan</a> after the global lender revised its stand, Finance Minister Asad Umar on Monday.

Cash-strapped Pakistan is seeking $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy.

While speaking to journalists here, Umar said Pakistan had not changed its stance in talks with the IMF. He added that the IMF had revised their stance and "the gap" between the IMF and Pakistan had decreased.

Pakistan will reach an agreement soon with the IMF, Dawn newspaper quoted Umar as saying.

He said the new IMF mission chief is to arrive in Pakistan on Tuesday for an introductory visit.

Earlier, media reports said the IMF has proposed tough conditions for a bailout package.

With the generous Chinese assistance, Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries during the current fiscal year.

While China has pumped-in $4.1 billion, Pakistan has got $3 billion from Saudi Arabia and $2 billion from United Arab Emirates (UAE).

On March 16, Umar had hinted that bailout package talks with the IMF are in their final stages and the government will have further negotiations with the newly appointed IMF mission chief before reaching an agreement.

"Pakistan has come closer to reaching an agreement with the IMF as the differences between Pakistan and the IMF over a possible bailout package have decreased," he had said.

The finance minister had said that a deal would materialise only after a detailed discussion with the IMF mission chief.&nbsp;

He said that no final amount for the bailout package had been decided so far, as negotiations were still underway.

Pakistan, facing acute financial woes, will soon reach an agreement with the IMF on a bailout plan after the global lender revised its stand, Finance Minister Asad Umar on Monday.

Pakistan, facing acute financial woes, will soon reach an agreement with the IMF on a bailout plan after the global lender revised its stand, Finance Minister Asad Umar on Monday. Cash-strapped Pakistan is seeking $8 billion from the International Monetary Fund (IMF) to bail itself out from a severe balance-of-payments crisis that threatens to cripple the country's economy. While speaking to journalists here, Umar said Pakistan had not changed its stance in talks with the IMF. He added that the IMF had revised their stance and "the gap" between the IMF and Pakistan had decreased. Pakistan will reach an agreement soon with the IMF, Dawn newspaper quoted Umar as saying. He said the new IMF mission chief is to arrive in Pakistan on Tuesday for an introductory visit. Earlier, media reports said the IMF has proposed tough conditions for a bailout package. With the generous Chinese assistance, Pakistan has so far received a total of $9.1 billion in financial aid packages from friendly countries during the current fiscal year. While China has pumped-in $4.1 billion, Pakistan has got $3 billion from Saudi Arabia and $2 billion from United Arab Emirates (UAE). On March 16, Umar had hinted that bailout package talks with the IMF are in their final stages and the government will have further negotiations with the newly appointed IMF mission chief before reaching an agreement. "Pakistan has come closer to reaching an agreement with the IMF as the differences between Pakistan and the IMF over a possible bailout package have decreased," he had said. The finance minister had said that a deal would materialise only after a detailed discussion with the IMF mission chief. He said that no final amount for the bailout package had been decided so far, as negotiations were still underway.

Pakistan, IMF to reach agreement soon on bailout package: Finance Minister

The International Monetary Fund (IMF) on Friday said it has reached an agreement with Sri Lanka to extend a $1.5 billion loan facility for an extra year, a move some analysts say could allow the government to boost spending ahead of key elections.

The global lender also concluded its fifth review to ensure the terms of its lending facility are being met, allowing it to disburse the sixth tranche of the loan.&nbsp;

Reuters had earlier exclusively reported the IMF agreement on extending the loan programme and sixth tranche.

The loan programme, known as the Extended Fund Facility (EFF), now stretches to four years, from the originally agreed three in mid-2016.

Manuela Goretti, the head of visiting IMF staff team, in a statement, said the team welcomes the authorities’ efforts to bring their economic reform program back on track following the political turmoil of late 2018.&nbsp;

"The team reached understandings.... on the fifth review and their request to extend the EFF arrangement for an additional year with the remaining disbursements being evenly spread over this period to allow more time for the completion of the economic reform agenda," Goretti said in a statement.

The IMF has already disbursed over $1 billion of the $1.5 billion loans.&nbsp;

The global lender also said the island nation`s economic growth is expected to improve to about 3.5 per cent this year, speeding from 3 per cent last year and urged the central bank to be ready to tighten monetary policy if inflationary pressures re-emerge.

The loan is crucial for Sri Lanka, which plans to sell up to $3 billion of bonds as early as next week and needs the IMF programme to continue to ensure more attractive borrowing terms.

"This is very positive when the government goes for the sovereign bond," said Dimantha Mathew, head of research at broker First Capital Holdings.

"Extended time for targets considering election year also gives space for the government to face the elections. With this, investors would be very comfortable coming to Sri Lanka. Markets will also take this as a positive sign."

Sri Lanka is set to hold presidential elections later this year, followed by parliamentary polls in 2020.

The IMF in November said it had delayed the programme until it had more clarity on the political situation after President Maithripala Sirisena abruptly sacked his prime minister Ranil Wickremesinghe in a move that was later ruled unconstitutional. Wickremesinghe was later reinstated.

Sri Lanka is struggling to repay its foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first three months. It used its reserves to repay a $1 billion sovereign bond loan in January.

It was designed to avert a financial crisis and support the economic reform agenda of the Sirisena-led coalition government of the Sri Lanka Freedom Party (SLFP) and Wickremesinghe`s centre-right United National Party (UNP).&nbsp;

The International Monetary Fund (IMF) on Friday said it has reached an agreement with Sri Lanka to extend a $1.5 billion loan facility for an extra year, a move some analysts say could allow the government to boost spending ahead of key elections.

The International Monetary Fund (IMF) on Friday said it has reached an agreement with Sri Lanka to extend a $1.5 billion loan facility for an extra year, a move some analysts say could allow the government to boost spending ahead of key elections. The global lender also concluded its fifth review to ensure the terms of its lending facility are being met, allowing it to disburse the sixth tranche of the loan. Reuters had earlier exclusively reported the IMF agreement on extending the loan programme and sixth tranche. The loan programme, known as the Extended Fund Facility (EFF), now stretches to four years, from the originally agreed three in mid-2016. Manuela Goretti, the head of visiting IMF staff team, in a statement, said the team welcomes the authorities’ efforts to bring their economic reform program back on track following the political turmoil of late 2018. "The team reached understandings.... on the fifth review and their request to extend the EFF arrangement for an additional year with the remaining disbursements being evenly spread over this period to allow more time for the completion of the economic reform agenda," Goretti said in a statement. The IMF has already disbursed over $1 billion of the $1.5 billion loans. The global lender also said the island nation`s economic growth is expected to improve to about 3.5 per cent this year, speeding from 3 per cent last year and urged the central bank to be ready to tighten monetary policy if inflationary pressures re-emerge. The loan is crucial for Sri Lanka, which plans to sell up to $3 billion of bonds as early as next week and needs the IMF programme to continue to ensure more attractive borrowing terms. "This is very positive when the government goes for the sovereign bond," said Dimantha Mathew, head of research at broker First Capital Holdings. "Extended time for targets considering election year also gives space for the government to face the elections. With this, investors would be very comfortable coming to Sri Lanka. Markets will also take this as a positive sign." Sri Lanka is set to hold presidential elections later this year, followed by parliamentary polls in 2020. The IMF in November said it had delayed the programme until it had more clarity on the political situation after President Maithripala Sirisena abruptly sacked his prime minister Ranil Wickremesinghe in a move that was later ruled unconstitutional. Wickremesinghe was later reinstated. Sri Lanka is struggling to repay its foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first three months. It used its reserves to repay a $1 billion sovereign bond loan in January. It was designed to avert a financial crisis and support the economic reform agenda of the Sirisena-led coalition government of the Sri Lanka Freedom Party (SLFP) and Wickremesinghe`s centre-right United National Party (UNP).

IMF agrees to extend Sri Lanka's $1.5 billion loan facility by one year

Sri Lanka's central bank unexpectedly slashed banks' statutory reserve ratio on Friday to spur credit growth as <a href="http://www.wionews.com/south-asia/sri-lanka-secures-1-billion-chinese-loan-156873">policymakers struggle to boost the island's faltering economy</a> after a political crisis.

Economic growth cooled to a 17-year low of around 3 per cent in 2018, central bank Governor Indrajit Coomaraswamy said after the policy decision, adding that it will pick up to about 4 per cent this year.

The Central Bank of Sri Lanka (CBSL) cut the statutory reserve ratio (SRR) by 100 basis points to 5 per cent effective March 1, while leaving its two key monetary policy rates steady, saying they were "appropriate". Analysts polled by Reuters had expected all three to be left unchanged.

The SRR cut would inject 60 billion rupees (334.45 million) into the financial system, the central bank said.

"The (Monetary) Board was of the view that some policy intervention by the Central Bank to address the large and persistent liquidity deficit in the domestic money market is warranted," the central bank said in a statement.

It said liquidity has remained tight despite a 150 bps cut in the statutory reserve ratio in mid-November.

Private-sector credit grew 15.9 per cent in December from a year earlier, slowing from a 16.2 per cent pace in December 2017, central bank data showed.

"The surprise cut appears to be targeted at addressing the persistent liquidity deficit issues faced by banks over the last few quarters, rather than an active signal of monetary easing," said Trisha Peries, product head of economic research at Frontier Research.

Sri Lanka started discussions with the International Monetary Fund (IMF) last week on extending a $1.5 billion loan.

The talks were delayed after a political crisis erupted in October.

President Maithripala Sirisena's abrupt change of prime minister and decision to dissolve parliament created panic and uncertainty among investors, who dumped Sri Lankan government bonds and other assets, sending the rupee currency to record lows.

The move was later ruled unconstitutional and Ranil Wickremesinghe was reinstated as prime minister after 51 days.

Analysts who had expected no change in the central bank's stance had pointed to an easing of political and financial market pressure.. The rupee has rebounded 1.8 per cent against the dollar since hitting an all-time low of 183.00 on Jan. 3, while foreigners have resumed buying government bonds.

Wickremesinghe's government aims to focus on economic growth, which has been sluggish due to tight policies, ahead of a presidential poll later this year and general election in 2020.

Coomaraswamy also said the central bank "is doing the paperwork" on a yuan swap agreement with the People's Bank of China equivalent to $1.5 billion, along with a $400 million swap from Reserve Bank of India and another from Qatar as Sri Lanka struggles to repay a record $5.9 billion foreign loan due this year.

Sri Lanka's central bank unexpectedly slashed banks' statutory reserve ratio on Friday to spur credit growth as policymakers struggle to boost the island's faltering economy after a political crisis.

Sri Lanka's central bank unexpectedly slashed banks' statutory reserve ratio on Friday to spur credit growth as policymakers struggle to boost the island's faltering economy after a political crisis. Economic growth cooled to a 17-year low of around 3 per cent in 2018, central bank Governor Indrajit Coomaraswamy said after the policy decision, adding that it will pick up to about 4 per cent this year. The Central Bank of Sri Lanka (CBSL) cut the statutory reserve ratio (SRR) by 100 basis points to 5 per cent effective March 1, while leaving its two key monetary policy rates steady, saying they were "appropriate". Analysts polled by Reuters had expected all three to be left unchanged. The SRR cut would inject 60 billion rupees (334.45 million) into the financial system, the central bank said. "The (Monetary) Board was of the view that some policy intervention by the Central Bank to address the large and persistent liquidity deficit in the domestic money market is warranted," the central bank said in a statement. It said liquidity has remained tight despite a 150 bps cut in the statutory reserve ratio in mid-November. Private-sector credit grew 15.9 per cent in December from a year earlier, slowing from a 16.2 per cent pace in December 2017, central bank data showed. "The surprise cut appears to be targeted at addressing the persistent liquidity deficit issues faced by banks over the last few quarters, rather than an active signal of monetary easing," said Trisha Peries, product head of economic research at Frontier Research. Sri Lanka started discussions with the International Monetary Fund (IMF) last week on extending a $1.5 billion loan. The talks were delayed after a political crisis erupted in October. President Maithripala Sirisena's abrupt change of prime minister and decision to dissolve parliament created panic and uncertainty among investors, who dumped Sri Lankan government bonds and other assets, sending the rupee currency to record lows. The move was later ruled unconstitutional and Ranil Wickremesinghe was reinstated as prime minister after 51 days. Analysts who had expected no change in the central bank's stance had pointed to an easing of political and financial market pressure.. The rupee has rebounded 1.8 per cent against the dollar since hitting an all-time low of 183.00 on Jan. 3, while foreigners have resumed buying government bonds. Wickremesinghe's government aims to focus on economic growth, which has been sluggish due to tight policies, ahead of a presidential poll later this year and general election in 2020. Coomaraswamy also said the central bank "is doing the paperwork" on a yuan swap agreement with the People's Bank of China equivalent to $1.5 billion, along with a $400 million swap from Reserve Bank of India and another from Qatar as Sri Lanka struggles to repay a record $5.9 billion foreign loan due this year.

Sri Lanka central bank cuts banks' liquidity ratio to spur loan growth

The World Government Summit in Dubai, attended by more than 4,000 delegates from 140 countries representing the business, cultural and political sectors, on Sunday featured speeches and discussions of peace, development and the present and future world economy.

The conference, organized annually by the government of the United Arab Emirates, included key international figures such as International Monetary Fund general director Christine Lagarde, several heads of state and assorted Nobel Prizewinners.

In the inaugural address of the conclave, Lagarde warned that the world economy is growing more slowly than anticipated because of various factors.

Key among those factors, Lagarde said, are trade tensions, tax hikes, financial restrictions, the uncertainty over Brexit and the deceleration of the Chinese economy.

In her speech, the IMF director laid out her vision of the future of the world economy, which - she emphasized - finds itself at a moment of "transformation."

Lagarde said that many jobs will change "radically" as a consequence of globalization and new technologies, noting that many jobs will be adapted to "artificial intelligence."

She also took advantage of her time at the speaker's podium to issue a call to all countries to fight against corruption, emphasizing that it creates a lack of confidence and puts the brakes on economic growth.

Less convinced about the positive effects of technology on the organization of labor was Nobel Prizewinner in Economics Paul Krugman.

The US economist emphasized that technology has changed a great deal in the past 25 years, but that has not meant much shift in the way people work, and so - in his judgment - the tech revolution has not been a truly "revolutionary" kind of change and the expected shifts in the workplace have not been as great as had been anticipated.

Pope Francis, who just wrapped up a trip to the UAE, also participated in the summit via a video message sent to the forum attendees reminding them that "one cannot speak of sustainable development without solidarity."

Via a video, the pontiff asked the attendees - in taking up "basic issues" like the challenges of politics and economic development - not to simply ask themselves what the best opportunities are to take advantage of, but rather "what kind of world we want to build together."

"We could also say that the good, if it is not common, is not true good. Perhaps now more than ever thinking and acting requires real dialogue with others because without others there's no future for me," he said.

Peace and conflict were also among the issues discussed at the forum.

Former Colombian President Juan Manuel Santos, in his remarks in a panel on the issue, discussed the peace process that he led in his country emphasizing that the Revolutionary Armed Forces of Colombia guerrillas had to be treated as "adversaries, not as enemies."

"The most important thing is to convince the other party, especially the commanders, that for them personally, it's better to negotiate peace than to remain at war," he said.

Some heads of government took advantage of the forum to call attention to their countries, with Pakistani Prime Minister Imran Khan appealing to foreign investors to back his country at a time when his government has undertaken a series of reforms that he admitted have been "painful."

It is time for investors to come to Pakistan, Khan told the audience, which included many multinational business leaders.

At the plenary session, Lebanese Prime Minister Saad Hariri talked about incorporating women into the labor forces and positions of responsibility in his country.

Hariri said that not involving women and not training them to work in all sectors represents a "great loss" for a country's GDP.

Also speaking on Sunday at the forum were Estonian Prime Minister Juri Ratas and French Economy Minister Bruno Le Maire.

The conference, which has been held in Dubai each year since 2012, is scheduled to wrap up on Tuesday.

The World Government Summit in Dubai, attended by more than 4,000 delegates from 140 countries representing the business, cultural and political sectors, on Sunday featured speeches and discussions of peace, development and the present and future world economy.

The World Government Summit in Dubai, attended by more than 4,000 delegates from 140 countries representing the business, cultural and political sectors, on Sunday featured speeches and discussions of peace, development and the present and future world economy. The conference, organized annually by the government of the United Arab Emirates, included key international figures such as International Monetary Fund general director Christine Lagarde, several heads of state and assorted Nobel Prizewinners. In the inaugural address of the conclave, Lagarde warned that the world economy is growing more slowly than anticipated because of various factors. Key among those factors, Lagarde said, are trade tensions, tax hikes, financial restrictions, the uncertainty over Brexit and the deceleration of the Chinese economy. In her speech, the IMF director laid out her vision of the future of the world economy, which - she emphasized - finds itself at a moment of "transformation." Lagarde said that many jobs will change "radically" as a consequence of globalization and new technologies, noting that many jobs will be adapted to "artificial intelligence." She also took advantage of her time at the speaker's podium to issue a call to all countries to fight against corruption, emphasizing that it creates a lack of confidence and puts the brakes on economic growth. Less convinced about the positive effects of technology on the organization of labor was Nobel Prizewinner in Economics Paul Krugman. The US economist emphasized that technology has changed a great deal in the past 25 years, but that has not meant much shift in the way people work, and so - in his judgment - the tech revolution has not been a truly "revolutionary" kind of change and the expected shifts in the workplace have not been as great as had been anticipated. Pope Francis, who just wrapped up a trip to the UAE, also participated in the summit via a video message sent to the forum attendees reminding them that "one cannot speak of sustainable development without solidarity." Via a video, the pontiff asked the attendees - in taking up "basic issues" like the challenges of politics and economic development - not to simply ask themselves what the best opportunities are to take advantage of, but rather "what kind of world we want to build together." "We could also say that the good, if it is not common, is not true good. Perhaps now more than ever thinking and acting requires real dialogue with others because without others there's no future for me," he said. Peace and conflict were also among the issues discussed at the forum. Former Colombian President Juan Manuel Santos, in his remarks in a panel on the issue, discussed the peace process that he led in his country emphasizing that the Revolutionary Armed Forces of Colombia guerrillas had to be treated as "adversaries, not as enemies." "The most important thing is to convince the other party, especially the commanders, that for them personally, it's better to negotiate peace than to remain at war," he said. Some heads of government took advantage of the forum to call attention to their countries, with Pakistani Prime Minister Imran Khan appealing to foreign investors to back his country at a time when his government has undertaken a series of reforms that he admitted have been "painful." It is time for investors to come to Pakistan, Khan told the audience, which included many multinational business leaders. At the plenary session, Lebanese Prime Minister Saad Hariri talked about incorporating women into the labor forces and positions of responsibility in his country. Hariri said that not involving women and not training them to work in all sectors represents a "great loss" for a country's GDP. Also speaking on Sunday at the forum were Estonian Prime Minister Juri Ratas and French Economy Minister Bruno Le Maire. The conference, which has been held in Dubai each year since 2012, is scheduled to wrap up on Tuesday.

Over 4,000 delegates from 140 countries attends World Government Summit in Dubai

Pakistan is likely to secure an International Monetary Fund (IMF) bailout soon to stave off a balance of payment crisis and help shore up its economy, Finance Minister Asad Umar said on Monday, as talks between Islamabad and the fund continue.

A day earlier, Prime Minister Imran Khan met IMF chief Christine Lagarde in Dubai to discuss a bailout, and the country's foreign currency reserves have dwindled to around $8 billion, just enough to cover about two months of imports

That meeting ended with a pledge to continue talks, and while there had not been any indication of a breakthrough, Umar said an agreement was coming into view.

"Our differences have narrowed," he told business groups in the northwestern city of Peshawar. "It seems we have come very close to having an agreement with the IMF."

Talks with the IMF began soon after Khan's government was appointed last August but a package has been held up by differences over the pace and scale of reforms that Pakistan would be required to undertake.

The IMF has pressed Pakistan to improve tax revenue collection, bolster foreign currency reserves and narrow a current account deficit expected to top 5 per cent of gross domestic product this year.

Pakistani officials say they agree on the need for reforms but do not want to sign up to conditions that would derail the economy, with growth set to slow this year to around 4 per cent from 5.2 per cent last year.

Khan has long resisted foreign loans, once declaring he would rather commit suicide than seek an IMF loan. However, Pakistan's fast depleting foreign reserves and a widening current account deficit left him little choice than to seek international assistance.

While no IMF package has been agreed, Pakistan has raised more than $10 billion in loans and credit arrangements from Middle Eastern allies such as Saudi Arabia and the United Arab Emirates as well as support from China, its partner in the vast China Pakistan Economic Corridor project.

The economic turbulence facing Pakistan was underlined on Monday when Moody's Investors' Service cut its outlook on Pakistan's banking sector to negative, citing the banks' large holdings of government bonds "that link their credit profiles to the low-rated government."

It noted that the Pakistani rupee had depreciated by 30 per cent against the US&nbsp;dollar, interest rates had risen by 450 basis points between Dec. 2017 and Feb. 2019, and inflation was rising; "all factors which affect business and consumer confidence and the private sector's debt repayment capacities."

Earlier this month, Pakistan's credit rating was downgraded by Standard and Poor's, which cited diminished growth prospects and elevated external and fiscal stresses.

Pakistan is likely to secure an International Monetary Fund (IMF) bailout soon to stave off a balance of payment crisis and help shore up its economy, Finance Minister Asad Umar said on Monday, as talks between Islamabad and the fund continue.

Pakistan is likely to secure an International Monetary Fund (IMF) bailout soon to stave off a balance of payment crisis and help shore up its economy, Finance Minister Asad Umar said on Monday, as talks between Islamabad and the fund continue. A day earlier, Prime Minister Imran Khan met IMF chief Christine Lagarde in Dubai to discuss a bailout, and the country's foreign currency reserves have dwindled to around $8 billion, just enough to cover about two months of imports That meeting ended with a pledge to continue talks, and while there had not been any indication of a breakthrough, Umar said an agreement was coming into view. "Our differences have narrowed," he told business groups in the northwestern city of Peshawar. "It seems we have come very close to having an agreement with the IMF." Talks with the IMF began soon after Khan's government was appointed last August but a package has been held up by differences over the pace and scale of reforms that Pakistan would be required to undertake. The IMF has pressed Pakistan to improve tax revenue collection, bolster foreign currency reserves and narrow a current account deficit expected to top 5 per cent of gross domestic product this year. Pakistani officials say they agree on the need for reforms but do not want to sign up to conditions that would derail the economy, with growth set to slow this year to around 4 per cent from 5.2 per cent last year. Khan has long resisted foreign loans, once declaring he would rather commit suicide than seek an IMF loan. However, Pakistan's fast depleting foreign reserves and a widening current account deficit left him little choice than to seek international assistance. While no IMF package has been agreed, Pakistan has raised more than $10 billion in loans and credit arrangements from Middle Eastern allies such as Saudi Arabia and the United Arab Emirates as well as support from China, its partner in the vast China Pakistan Economic Corridor project. The economic turbulence facing Pakistan was underlined on Monday when Moody's Investors' Service cut its outlook on Pakistan's banking sector to negative, citing the banks' large holdings of government bonds "that link their credit profiles to the low-rated government." It noted that the Pakistani rupee had depreciated by 30 per cent against the US dollar, interest rates had risen by 450 basis points between Dec. 2017 and Feb. 2019, and inflation was rising; "all factors which affect business and consumer confidence and the private sector's debt repayment capacities." Earlier this month, Pakistan's credit rating was downgraded by Standard and Poor's, which cited diminished growth prospects and elevated external and fiscal stresses.

Pakistan 'very close' to securing IMF bailout: Finance Minister

Ahead of the Budget the International Monetary Fund's(IMF)&nbsp;top representative Andreas Bauer in India spoke exclusively to our correspondent Siddhant Sibal.&nbsp; 
Bauer lauded the various reforms in India especially the GST and said that the country has done well and the world needs it to grow. He hoped for fiscal consolidation in the upcoming Budget. Here is the full interview.&nbsp;

WION: The IMF report was upbeat on India. What makes you so confident?&nbsp;

Andreas Bauer: We think India has a strong base to grow on. It has a young population, it has human resources that are growing, it has a fairly high savings rate, although we would see some more of that will provide the basis for investment.

India has a good basis to start growing. We need reforms. This is why we looking in Budgets, programmes of the new government. We want to see continues pace of reforms, some important reforms have been implemented in recent years.&nbsp;

WION: Your assessment of reforms introduced by the government in the last few years?&nbsp;

Andreas Bauer: India has made a lot of progress in a few years and GST for us is a big reform. It has the potential to unify the domestic market, certainty, the initial structure of GST was quite complex and compliance cost very high.

We have seen good moves to simplify that. More scope to go further. But reforms give a tailwind to move the economy forward. Looking at the next phase, after the elections that India can pick up the reform pace and continue to build the economic pace that allows country to grow at these high rates.

India has done well, India is growing above 7 per cent, the country is 15 per cent of global growth and world needs India to grow as there are other economies like China which are slowing, so we do need India to grow.&nbsp;

WION: What kind of reforms you expect?&nbsp;

Andreas Bauer: We have laid reforms out in our annual assessment of the economy. In short term, we are looking at a number of things. We are looking at ways to address twin balance sheet problem.

So improving capital base of banks, which is ongoing for public banks and governance reforms of the banks and making sure these banks in future work on much better basis and we don't see repeat of accumulation of large non-performing loans. One of the issues, we have discussed is the global environment might become challenging. Important to put fiscal on a strong footing.&nbsp;

WION: Your suggestions on the Budget?&nbsp;

Andreas Bauer: I rather wait for the Budget to see what is in there but we have been for sometimes saying that India should gradually consolidate. So certainly we want India to persist on that path.

See the deficits to decline and debt levels to decline. These are relatively high levels for an emerging economy and we want to have a space that when a negative shock comes, fisc can help. We would like to see the continuation of the consolidation path. It is important to take a global view and create fiscal space to be ready in case if negative shock.&nbsp;

WION: Your assessment of oil prices especially with the crisis in Venezuela?

Andreas Bauer: Geopolitical events always pose risk to oil price. The general expectation is after the recent decline oil prices, they will remain at the current level so that is not bad news for oil importers like India.

Risk of supply disruption as we saw last year. So risk as well on that front. In general, given that global economy is slowing and given that previous supply disruptions have been addressed, so our forecast and markets forecast is stable oil prices.&nbsp;

WION: You have painted a gloomy picture of the world economy. What makes you pessimistic?&nbsp;

Andreas Bauer: The good news is the global economy is still expanding but expansion is slowing and at a faster pace than originally then we anticipated. So we put out a word of caution. The global economy last year expanded by 3.7 per cent, that is quite a good pace.

For the current year, growth will slow down to 3.5 per cent and that refects in both advanced and emerging markets. The key message to countries is, the situation is still okay, but risk remains and better prepare for a more difficult external environment.&nbsp;

Ahead of the Budget the International Monetary Fund's(IMF) top representative Andreas Bauer in India spoke exclusively to our correspondent Siddhant Sibal. Bauer lauded the various reforms in India especially the GST and said that the country has done well and the world needs it to grow.

Ahead of the Budget the International Monetary Fund's(IMF) top representative Andreas Bauer in India spoke exclusively to our correspondent Siddhant Sibal. Bauer lauded the various reforms in India especially the GST and said that the country has done well and the world needs it to grow. He hoped for fiscal consolidation in the upcoming Budget. Here is the full interview. WION: The IMF report was upbeat on India. What makes you so confident? Andreas Bauer: We think India has a strong base to grow on. It has a young population, it has human resources that are growing, it has a fairly high savings rate, although we would see some more of that will provide the basis for investment. India has a good basis to start growing. We need reforms. This is why we looking in Budgets, programmes of the new government. We want to see continues pace of reforms, some important reforms have been implemented in recent years. WION: Your assessment of reforms introduced by the government in the last few years? Andreas Bauer: India has made a lot of progress in a few years and GST for us is a big reform. It has the potential to unify the domestic market, certainty, the initial structure of GST was quite complex and compliance cost very high. We have seen good moves to simplify that. More scope to go further. But reforms give a tailwind to move the economy forward. Looking at the next phase, after the elections that India can pick up the reform pace and continue to build the economic pace that allows country to grow at these high rates. India has done well, India is growing above 7 per cent, the country is 15 per cent of global growth and world needs India to grow as there are other economies like China which are slowing, so we do need India to grow. WION: What kind of reforms you expect? Andreas Bauer: We have laid reforms out in our annual assessment of the economy. In short term, we are looking at a number of things. We are looking at ways to address twin balance sheet problem. So improving capital base of banks, which is ongoing for public banks and governance reforms of the banks and making sure these banks in future work on much better basis and we don't see repeat of accumulation of large non-performing loans. One of the issues, we have discussed is the global environment might become challenging. Important to put fiscal on a strong footing. WION: Your suggestions on the Budget? Andreas Bauer: I rather wait for the Budget to see what is in there but we have been for sometimes saying that India should gradually consolidate. So certainly we want India to persist on that path. See the deficits to decline and debt levels to decline. These are relatively high levels for an emerging economy and we want to have a space that when a negative shock comes, fisc can help. We would like to see the continuation of the consolidation path. It is important to take a global view and create fiscal space to be ready in case if negative shock. WION: Your assessment of oil prices especially with the crisis in Venezuela? Andreas Bauer: Geopolitical events always pose risk to oil price. The general expectation is after the recent decline oil prices, they will remain at the current level so that is not bad news for oil importers like India. Risk of supply disruption as we saw last year. So risk as well on that front. In general, given that global economy is slowing and given that previous supply disruptions have been addressed, so our forecast and markets forecast is stable oil prices. WION: You have painted a gloomy picture of the world economy. What makes you pessimistic? Andreas Bauer: The good news is the global economy is still expanding but expansion is slowing and at a faster pace than originally then we anticipated. So we put out a word of caution. The global economy last year expanded by 3.7 per cent, that is quite a good pace. For the current year, growth will slow down to 3.5 per cent and that refects in both advanced and emerging markets. The key message to countries is, the situation is still okay, but risk remains and better prepare for a more difficult external environment.

Ahead of Budget, IMF calls for more reforms

WION Exclusive: In conversation with Gita Gopinath, IMF Chief Economist

The International Monetary Fund trimmed its global growth forecasts on Monday and a survey showed increasing pessimism among business chiefs as trade tensions and uncertainty loomed over the world's biggest annual gathering of the rich and powerful.

The gloomy IMF forecasts, released on the eve of the World Economic Forum in Davos, Switzerland, highlighted the challenges facing policymakers as they tackle an array of actual or potential crises, from the US-China trade war to Brexit.

"After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising," IMF Managing Director Christine Lagarde told reporters.

"Does that mean a global recession is around the corner? No. But the risk of a sharper decline in global growth has certainly increased," she said, urging policymakers to brace for a "serious slowdown."

In its World Economic Outlook report released on Monday, the IMF predicted the global economy will grow at 3.5 per cent in 2019 and 3.6 per cent in 2020, down 0.2 and 0.1 percentage point respectively from last October's forecasts.

"There are so many variables and so much uncertainty globally, from the trade tension to geopolitical changes, so a lot of market activity and market sentiment are out of our control," Laura Cha, chair of the Hong Kong stock exchange, told Reuters Television.

The IMF downgrades mainly reflected signs of weakness in Europe, with its export powerhouse Germany hurt by new fuel emission standards for cars and with Italy under market pressure due to Rome's recent budget standoff with the European Union.

The global lender also cited a bigger-than-expected slowdown in China's economy and a possible "No Deal" Brexit as risks to its outlook, saying these could worsen market turbulence.

A survey by auditing and accounting giant <a href="http://www.wionews.com/business-economy/global-business-leaders-predict-fall-in-world-economic-growth-bet-heavy-on-artificial-intelligence-report-191914">PwC of nearly 1,400 chief executives</a> found that 29 per cent believe global economic growth will decline over the next 12 months, the highest percentage since 2012.

While the most pronounced shift was among business leaders in the United States, the share of CEOs who expected growth to slow increased significantly across every region, it showed.

"It's quite a reversal from last year and the gloomier mood cuts across just about everywhere in the world," said Bob Moritz, global chairman at PwC.

"With the rise of trade tension and protectionism, it stands to reason that confidence is waning."

Tim Ryan, US Chairman at PwC, told Reuters: “We were a little bit spoiled by the environment the past six to eight years after the financial crisis," describing an uncertain economy as the new normal.

"People are getting used to the volatility."

CHINA GLOOM WIDENS

Fears of a global slowdown have jolted markets and forced the US Federal Reserve Bank to signal a pause in its interest rate hike cycle, as investors fret about increasing weak signs in China and the fallout from Sino-US trade frictions.

Data released on Monday showed China's economy cooled in the fourth quarter on faltering domestic demand and bruising US tariffs, dragging 2018 growth to the lowest in nearly three decades.

"Sometimes we spook ourselves, so it remains to be seen how slow is slow, how bad is bad, let's see how the first quarter looks," said Cha.

Analysts polled by Reuters also saw a higher chance Japan will slide into a recession, keeping the country's central bank under pressure to maintain its massive stimulus.

The IMF cut its growth projections for the eurozone and developing countries while maintaining its forecast for a 2.5 per cent expansion in the United States this year.

It also kept its China growth forecast at 6.2 per cent in both 2019 and 2020 but said economic activity could miss expectations if trade tensions persist, even with state efforts to spur growth by boosting fiscal spending and bank lending.

"As seen in 2015–16, concerns about the health of China's economy can trigger abrupt, wide-reaching sell-offs in financial and commodity markets that place its trading partners, commodity exporters, and other emerging markets under pressure," it said.

Britain is expected to achieve 1.5 per cent growth this year though there is uncertainty over the projection, which is based on the assumption of an orderly exit from the EU, it said.

The International Monetary Fund trimmed its global growth forecasts on Monday and a survey showed increasing pessimism among business chiefs as trade tensions and uncertainty loomed over the world's biggest annual gathering of the rich and powerful.

The International Monetary Fund trimmed its global growth forecasts on Monday and a survey showed increasing pessimism among business chiefs as trade tensions and uncertainty loomed over the world's biggest annual gathering of the rich and powerful. The gloomy IMF forecasts, released on the eve of the World Economic Forum in Davos, Switzerland, highlighted the challenges facing policymakers as they tackle an array of actual or potential crises, from the US-China trade war to Brexit. "After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising," IMF Managing Director Christine Lagarde told reporters. "Does that mean a global recession is around the corner? No. But the risk of a sharper decline in global growth has certainly increased," she said, urging policymakers to brace for a "serious slowdown." In its World Economic Outlook report released on Monday, the IMF predicted the global economy will grow at 3.5 per cent in 2019 and 3.6 per cent in 2020, down 0.2 and 0.1 percentage point respectively from last October's forecasts. "There are so many variables and so much uncertainty globally, from the trade tension to geopolitical changes, so a lot of market activity and market sentiment are out of our control," Laura Cha, chair of the Hong Kong stock exchange, told Reuters Television. The IMF downgrades mainly reflected signs of weakness in Europe, with its export powerhouse Germany hurt by new fuel emission standards for cars and with Italy under market pressure due to Rome's recent budget standoff with the European Union. The global lender also cited a bigger-than-expected slowdown in China's economy and a possible "No Deal" Brexit as risks to its outlook, saying these could worsen market turbulence. A survey by auditing and accounting giant PwC of nearly 1,400 chief executives found that 29 per cent believe global economic growth will decline over the next 12 months, the highest percentage since 2012. While the most pronounced shift was among business leaders in the United States, the share of CEOs who expected growth to slow increased significantly across every region, it showed. "It's quite a reversal from last year and the gloomier mood cuts across just about everywhere in the world," said Bob Moritz, global chairman at PwC. "With the rise of trade tension and protectionism, it stands to reason that confidence is waning." Tim Ryan, US Chairman at PwC, told Reuters: “We were a little bit spoiled by the environment the past six to eight years after the financial crisis," describing an uncertain economy as the new normal. "People are getting used to the volatility." CHINA GLOOM WIDENS Fears of a global slowdown have jolted markets and forced the US Federal Reserve Bank to signal a pause in its interest rate hike cycle, as investors fret about increasing weak signs in China and the fallout from Sino-US trade frictions. Data released on Monday showed China's economy cooled in the fourth quarter on faltering domestic demand and bruising US tariffs, dragging 2018 growth to the lowest in nearly three decades. "Sometimes we spook ourselves, so it remains to be seen how slow is slow, how bad is bad, let's see how the first quarter looks," said Cha. Analysts polled by Reuters also saw a higher chance Japan will slide into a recession, keeping the country's central bank under pressure to maintain its massive stimulus. The IMF cut its growth projections for the eurozone and developing countries while maintaining its forecast for a 2.5 per cent expansion in the United States this year. It also kept its China growth forecast at 6.2 per cent in both 2019 and 2020 but said economic activity could miss expectations if trade tensions persist, even with state efforts to spur growth by boosting fiscal spending and bank lending. "As seen in 2015–16, concerns about the health of China's economy can trigger abrupt, wide-reaching sell-offs in financial and commodity markets that place its trading partners, commodity exporters, and other emerging markets under pressure," it said. Britain is expected to achieve 1.5 per cent growth this year though there is uncertainty over the projection, which is based on the assumption of an orderly exit from the EU, it said.

IMF chief rules out imminent global recession, anticipates sharper decline in global growth

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