IMF says trade war hurting Asia and may cut global growth

Changyong Rhee is voicing a note of caution over trade friction between the US and China. (AFP)
Updated 18 December 2018

IMF says trade war hurting Asia and may cut global growth

  • Global body says said Japan and South Korea could be among countries in the region hit hardest by the trade war between US and China.
  • Citing the potential fallout from the Sino-US trade war, the IMF cut its global growth forecast in October to 3.7 percent for both 2018 and 2019

TOKYO: Trade frictions between China and the United States are already affecting business confidence and investment in Asia, a senior International Monetary Fund official said, warning that the fund could further cut its global growth forecasts in January.
Changyong Rhee, director of the IMF’s Asia and Pacific Department, said Japan and South Korea could be among countries in the region hit hardest by the trade war given their reliance on exports to China.
“Investment is much weaker than expected. My interpretation is that the confidence channel is already affecting the global economy, particularly Asian economies,” Rhee told Reuters.
“We see global growth a little bit slower than we forecast in October,” he said on Monday.
Citing the potential fallout from the Sino-US trade war, the IMF cut its global growth forecast in October to 3.7 percent for both 2018 and 2019, down from 3.9 percent projected in July.
It expects Asia’s economic growth to slow to 5.4 percent next year from 5.6 percent projected this year.
Rhee said there was a chance the IMF could cut further its growth forecasts when it reviews them in January, given signs of slowdown not just in Asia but in Europe and the United States.
“Uncertainty is so large ... uncertainty means you have upside potential as well as downside risk. At this moment, we believe the downside risk is a little bit higher,” he said.
On China, Rhee said that it was not resorting to big-scale stimulus despite growing external headwinds, given the need to deal with long-term challenges such as curbing excess debt.
“They aren’t accelerating (stimulus) yet but taking the foot from the brake for the time being. But that doesn’t exclude the possibility that if the trade tension escalates, if growth goes down, they are ready to use stimulus,” he said.
“What we’re concerned and what we’re advising them is that the medium-term goals such as deleveraging are still important for financial stability,” Rhee added.
“So when they actually try to use stimulus, we hope they can use more fiscal policy rather than credit expansion.”


Egypt expects several share offerings by end of year

Updated 15 September 2019

Egypt expects several share offerings by end of year

  • One small company worth about 50 million Egyptian pounds was also expected to offer shares on the Nile Stock Exchange

CAIRO: Egypt expects two state companies and one private pharmaceuticals firm worth more than $61.3 million, or one billion Egyptian pounds, to make share offerings by the end of the year, an official at the Financial Regulatory Authority said on Sunday.
One small company worth about 50 million Egyptian pounds was also expected to offer shares on the Nile Stock Exchange, which specializes in small and medium sized enterprises, said Sayed Abdel Fadeel, head of the authority’s corporate finance department. He did not name the companies.
Egypt promised to sell minority stakes in several state companies in late 2018 but postponed the offerings following emerging market turbulence.