### Summary
Growing concerns about global economic growth and uncertainties in monetary policy have led to turbulence in financial markets, with rising bond yields and a decline in equity markets. Key factors affecting growth include interest rates, bond yields, and access to funds, which may result in a credit crunch and a more risk-averse environment in capital markets. China's shift towards self-sufficiency, combined with a more prudent policy environment, slower population growth, and trade sanctions, will lead to slower and more erratic growth in the country. Although there are near-term concerns, the longer-term outlook for global growth remains positive.
### Facts
- Global economic growth is a concern, reflected in rising bond yields and a decline in equity markets.
- Policymakers, particularly in the US, are worried about overtightening monetary policy.
- Western economies, including the UK, have proven resilient despite expectations of a recession.
- Lower inflation will boost spending power, but growth will depend on where interest rates and bond yields settle.
- Businesses face challenges in raising funds due to a credit crunch, tough lending conditions, and a risk-averse capital market environment.
- The International Monetary Fund forecasts global growth to slow from 3.5% last year to 3% this year and next, with Asia being a major driver.
- Concerns about deflation in China exist, but low inflation is more likely.
- China's shift towards self-sufficiency in response to trade wars has coincided with a more prudent policy environment and the need to curb inflation and manage debt overhang.
- A shrinking population and structural changes in China will result in slower and more erratic growth.
- Private sector activity remains strong in Asia, and Japan's economy is experiencing an economic rebound.
- Western economies previously experienced a prolonged period of cheap money, which led to imbalances and misallocation of capital.
- Prudent monetary policy in some emerging economies provides more room to act in response to economic weakness.
- Concerns exist regarding rising policy rates in the US, UK, and euro area and the tightening of central banks' balance sheets.
- The definition of a risk-free asset is being questioned, as government bonds, previously considered safe, have witnessed negative total returns.
- There has been a rise in shadow banking and non-bank financial institutions, with collateral in the form of government bonds playing a crucial role.
Overall, the focus is shifting from inflation to growth, and future policy rates may need to settle at a high level. High levels of public and private debt globally limit policy maneuverability and expose individuals and firms to higher interest rates.
Argentina plans to use a $7.5 billion disbursement from the International Monetary Fund (IMF) to repay China part of the money it borrowed through a currency swap line, in order to avoid defaulting on its debt to the multilateral lender.
Caretaker Finance Minister Shamshad Akhtar has assured the International Monetary Fund (IMF) of steadfast implementation of policy actions committed under the $3bn Standby Arrangement in order to maintain economic stability during the tenure of the caretaker government.
Former finance minister Miftah Ismail reveals that the caretaker government in Pakistan must seek permission from the International Monetary Fund (IMF) before giving relief to consumers facing inflated electricity bills, and urges political leadership to come up with a strategy to collect taxes from the rich.
The Pakistani government is seeking approval from the International Monetary Fund (IMF) before announcing any immediate relief for consumers protesting against inflated electricity bills, with relief likely to be provided to those using up to 400 units per month for August and September.
The International Monetary Fund (IMF) has not granted its assent on Pakistan's request for deferment of electricity bills, causing a delay in providing relief to power consumers due to resistance from the IMF.
IMF Managing Director Kristalina Georgieva commends "productive and substantive" discussions with Chinese officials, including Premier Li Qiang, regarding the status of the world economy and measures taken by China to achieve its growth goals.
Malawi's finance minister is "very optimistic" that the country's $1.2 billion external debt will be restructured and a new IMF loan program will be secured by the end of the year, pending assurance letters from China and India.
The International Monetary Fund (IMF) and the Financial Stability Board (FSB) have published a joint policy paper with recommendations for regulating stablecoins and decentralized finance (DeFi) activities, in response to the risks associated with crypto assets.
The International Monetary Fund (IMF) and World Bank have pledged to increase their cooperation in addressing climate change, debt vulnerabilities, and digital transitions, stating that they are well-positioned to contribute to tackling these challenges.
Pakistan's interim government is prioritizing economic revival and fulfilling international obligations, including agreements with the International Monetary Fund (IMF), to address the stagnant economy and financial issues. They aim to improve the overall business and investment environment, increase inflow of dollars from multilateral institutions, and reduce expenditures while upholding international agreements.
The global debt-to-GDP ratio has decreased for the second consecutive year, but the decline may be coming to an end as the post-COVID growth surge fades, according to the International Monetary Fund (IMF). China and the United States both have high debt-to-GDP ratios, and the IMF has called for strategies to reduce debt vulnerabilities in various sectors.
Argentina and the International Monetary Fund (IMF) face challenges as the country enters a recession, misses economic targets, and struggles with inflation, prompting calls for stricter conditions and deeper structural reforms from the IMF.
The International Monetary Fund (IMF) has expressed concerns about the rampant smuggling of petroleum products in Pakistan, which costs the country Rs10 billion annually and is being used as a key source of financing for terrorists, calling for increased vigilance and security measures at the borders.
Egypt and the International Monetary Fund (IMF) have agreed to merge the first and second reviews of Egypt's economic reform program, which had been delayed due to concerns over Egypt's progress in meeting the IMF's terms.
The International Monetary Fund (IMF) did not reach an agreement with Sri Lanka in their first review of a $2.9bn bailout package due to concerns about a potential shortfall in government revenue generation, according to the lender.
The caretaker government of Pakistan is set to begin talks with the International Monetary Fund (IMF) next month to review the $3 billion Standby Arrangement, with the second quarterly review due in October and a disbursement of $710 million expected in December. The IMF has emphasized the importance of full and timely implementation of the program for its success in light of the country's economic challenges. The finance minister has also highlighted the need for a consensus among politicians to address economic issues.
The International Monetary Fund believes that China's economy can accelerate growth over the medium term through reforming its economy to shift towards consumer spending from investment, although recent data shows signs of stabilization.
The International Monetary Fund (IMF) has warned that if geopolitical fragmentation continues to intensify, China may suffer more than the West due to the global commodity market becoming more fragmented since the outbreak of the Ukraine war, leading to price volatility, threats to food security, and increased costs for the clean energy transition.
The IMF's largest-ever allocation of special drawing rights (SDRs) in August 2021 provided a boost to member countries and helped the global economy avoid worse outcomes, with low-income countries receiving nearly double the allocation compared to advanced economies. The allocation of SDRs has been used to increase reserve buffers, lower borrowing costs, protect livelihoods, and fund critical needs, including pandemic-related expenses. Moving forward, strong economies should contribute and channel SDRs to support vulnerable countries facing multiple shocks and challenging transitions, while being mindful of higher interest and inflation rates.
China's economic growth this year may be as low as 2 percent, half of what the International Monetary Fund predicts, due to problems in the property sector, weak foreign direct investment, and other structural issues, according to Daniel Rosen of the Rhodium Group. The IMF has forecasted 5.2 percent growth for China, but Rosen believes growth above 3 percent is unlikely in the medium term. Additionally, concerns are rising that China's economic challenges could hinder global growth.
The US should demand that China support debt restructuring for struggling countries as a condition for changes to the IMF's shareholding formula, according to a former senior US Treasury development expert.
BlackRock Vice Chairman Philipp Hildebrand believes the IMF should discuss the new economic reality, where central banks have limited ability to support growth through interest rate cuts, due to sticky inflation and structural conditions.
The International Monetary Fund (IMF) predicts that fears of a global recession caused by the Ukraine war and a cost of living crisis are unfounded, as global growth has shown resilience, although it warns against central banks cutting interest rates too quickly.
The International Monetary Fund is closely monitoring global bond market developments, particularly the recent selloff of U.S. bonds, which could reflect a supply mismatch rather than concerns about interest rates or long-term risks.
The International Monetary Fund (IMF) expects global economy to expand by 3% in 2023, but warns that growth remains weak and risks are tilted to the downside, with weaker recoveries expected in Europe and China, while inflation is projected to remain high and commodity prices pose a serious risk.
The International Monetary Fund expects anemic growth and various challenges for the global economy, including volatility in commodities markets and China's troubled property sector, despite easing inflationary pressures.
The International Monetary Fund (IMF) expects Pakistan's economy to perform better than expected, with a growth of 2.5% this year and 5% in the next fiscal year, despite macroeconomic challenges, surpassing projections from other multilateral agencies. The IMF also maintains a global growth forecast of 3% for this year but warns of high inflation and downgrades outlooks for China and Germany.
The IMF predicts that the world economy will grow at a slower pace of 2.9% in 2024 due to ongoing risks from higher interest rates, the war in Ukraine, and the eruption of violence in the Middle East, highlighting the need for tight monetary policy to combat inflation.
The International Monetary Fund (IMF) predicts that inflation will remain high through 2025 for most central banks, with Europe and the UK experiencing worse inflation than the United States, which has downward-pointing indicators for core inflation; Chief Investment Officer Ahmed Riesgo suggests adding duration to investment portfolios while maintaining cash and T-bills, implementing a barbell strategy in the Treasury curve, and increasing the quality of holdings and factor exposure to quality in equities due to the heightened risk of a US recession in 2024.
The International Monetary Fund (IMF) has stated that Middle East economies are gradually recovering, but the war between Israel and Hamas could impact the outlook, especially in the oil markets; the IMF expects economic growth in the region to slow to 2% this year but improve to 3.4% in 2024.
China's weak economic recovery and the risks associated with its property crisis are likely to impact Asia's economic prospects, according to the International Monetary Fund (IMF), leading to a cloudier outlook for the region and potential spillover effects on commodity-exporting countries with close trade links to China. The IMF revised its growth estimate for Asia down to 4.2% for 2024, and emphasized the need for central banks in the region to exercise caution in cutting interest rates due to sticky core inflation and other global factors such as the Middle East conflict. Additionally, the IMF warned that Japan's normalization of monetary policy could have significant global implications.
Pakistan's central bank has met its forward book target of $4.2 billion set by the IMF and is positioned well to meet additional targets, while an IMF delegation is set to evaluate the country's performance and potentially approve the next installment of $700 million in financial assistance.
The International Monetary Fund (IMF) has advised Nigeria to collect more taxes in order to fund the national budget and pay public debts, as the removal of fuel subsidies and foreign exchange unification alone will not lead to economic growth and stability; the IMF also recommended that Nigeria and other sub-Saharan African countries should look for funding domestically as foreign loans are becoming scarce and costly.
U.S. Treasury Secretary Janet Yellen says her plan for an "equi-proportional" increase in IMF quota-based lending resources is likely to be accomplished, despite concerns from China.
Pakistan's external financing needs are significant and its foreign exchange reserves coverage is precarious, warns the IMF, who also highlights the growing risk to Pakistani banks from a large exposure to government debt.
China is considering creating a state-backed stabilization fund to boost confidence in its equity markets, with potential access to hundreds of billions of yuan.
The IMF and World Bank are facing challenges to their legitimacy and influence in a changing world, as geopolitical tensions and the rise of regional powers threaten the functioning of these institutions and the Western-dominated economic model they represent.
