International Monetary Fund says Nigeria’s economy doing poorly, cuts growth projection

PM Imran Khan chairing the Punjab cabinet meeting. — PTI

However, some sources pointed out that Pakistan had to pay back around $6 billion to the International Monetary Fund which the country had obtained during the last PML-N government, so the size of the programme might go up to $10 to $12 billion.

To correct the underlying imbalances, fiscal and monetary actions needed to be undertaken without delay.

Pakistan's economy has been wobbly for months amid speculation that Prime Minister Imran Khan's new government would request the country's 13th International Monetary Fund bailout since the late 1980s. The S&P 500 index edged 0.1 percent lower to 2,884.43, while the Dow Jones Industrial Average gained 0.2 percent to 26,486.78. The Russell 2000 index of smaller-company stocks shed 0.2 percent to 1,629.51. Pakistan's fiscal deficit was on target to hit 7.2 per cent of GDP in the fiscal year ending in June 2019, but the government has introduced measures to bring it closer to 5 per cent.

It's the economy's dollar shortage that presents a bigger problem.

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

Nhlanhla Nene asks President Ramaphosa to relieve him of his duties
She said there had been ongoing engagements between the two and that Nene had briefed him on the details around his testimony. Ramaphosa announced that Tito Mboweni, a former South African Reserve Bank Governor, will replace Nene as finance minister.

Pakistan's finance minister told the daily Dawn newspaper on Saturday that the government had not yet decided whether it would go to the IMF, and had not sketched out a formal proposal to the fund ahead of the Bali summit.

When the world´s two biggest economies - the USA and China - are "at odds", that is going to create "a situation where everyone is going to suffer", Obstfeld said.

The changes are part of Islamabad's efforts to rethink key Belt and Road Initiative projects in Pakistan, to which China has pledged about $60 billion in financing. Rupee devaluation will make imported goods expensive and increase inflation, which will erode purchasing power. At 0930 GMT, it was down about 7 percent. A second market participant confirmed the central bank was keeping out of the market, effectively letting the currency devalue.

The United States and China are embroiled in an escalating trade war. The world body said that in these circumstances, government intervention in the foreign exchange market should be "limited to addressing disorderly market conditions".

"A catalyst like earnings will give investors something to look forward to but right now it's just a continuation of negative news for equities, with higher yields and slowing global growth", Cardillo said. At 6.46am Brent crude was trading at $84.43 a barrel and the pound was trading at $1.309 against the dollar and at €1.139 against the euro.

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