World stocks tumble after International Monetary Fund slashes economic growth forecast

World stocks tumble after International Monetary Fund slashes economic growth forecast

The Twitterati, however, are continuing to remind the government of its earlier statements by flooding the microblogging website with screenshots of the said post.

Prime Minister Imran Khan made the decision on Monday after meeting with top economic advisers, Umar said in the interview.

The IMF concluded a consultative visit last week with a warning that Pakistan needed to quickly secure "significant external financing" to stave off a crisis, though it did not suggest who could supply the money.

The sources said the world body will also ask Islamabad to expand the tax net in the country, and added that the International Monetary Fund also wants Pakistan to decrease circular debts and losses in state institutions, the report said.

The report said: "In the United Kingdom, where the output gap is closed and unemployment is low, a modest tightening of monetary policy may be warranted, although at a time of heightened uncertainty, monetary policy should remain flexible in response to changing conditions associated with the Brexit negotiations". It is therefore closer to the government's forecast for 2.5 percent growth, and the latest projection by the European Commission (in July) for 2.3 percent.

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The open market rate is Rs 134 to Rs 135, according to Zafar Paracha, Secretary, General Exchange Companies Association of Pakistan.

Pakistan's foreign currency reserves dropped in late September to $8.4 billion, barely enough for those debt payments.

The business community has criticised the rupee devaluation and urged the government to direct Ministry of Finance and State Bank to immediately intervene in the matter of rupee devaluation as it was bound to hit all the sectors of economy hard. South Africa, only 0.8 percent this year.

The government is seeking to curb spending, while the central bank has raised interest rates to the highest in three years to help shore up confidence in the economy. However the United States, one of the IMF's biggest donors, has raised fears Pakistan could use any bailout money to repay mounting loans from China, sparking criticism from Islamabad.

"We have not been formally approached yet", said Maurice Obstfeld, the IMF's top economist, during the fund's annual meeting in Bali Tuesday.

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While the IMF's outlook for the Chinese economy stayed at 6.6% this year, its forecast for next year of 6.2% represents the slowest growth rate the Asian country has seen since 1990.

He said the talks would be held for "such a programme, a stabilisation, a recovery programme, on which basis we could overcome this financial crisis".

The currency's latest drop to between 130 to 136 per dollar, according to the people who asked not to be identified as they aren't authorized to speak publicly, comes after the International Monetary Fund repeatedly stated that the rupee was overvalued.

Islamabad has also taken on more than $60 billion of loans from China to bolster its decrepit infrastructure.

That also followed the IMF's first downgrade to its global growth forecast since 2016.

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