AGL 41.70 Increased By ▲ 0.20 (0.48%)
AIRLINK 127.40 Decreased By ▼ -0.60 (-0.47%)
BOP 6.59 Increased By ▲ 0.33 (5.27%)
CNERGY 4.13 No Change ▼ 0.00 (0%)
DCL 8.56 Increased By ▲ 0.12 (1.42%)
DFML 40.85 Increased By ▲ 0.16 (0.39%)
DGKC 87.05 Decreased By ▼ -0.85 (-0.97%)
FCCL 33.90 Decreased By ▼ -0.20 (-0.59%)
FFBL 65.70 Decreased By ▼ -0.63 (-0.95%)
FFL 10.51 Decreased By ▼ -0.05 (-0.47%)
HUBC 109.50 Increased By ▲ 0.80 (0.74%)
HUMNL 14.89 Increased By ▲ 0.43 (2.97%)
KEL 4.86 Increased By ▲ 0.21 (4.52%)
KOSM 7.85 Increased By ▲ 0.52 (7.09%)
MLCF 42.55 Decreased By ▼ -0.17 (-0.4%)
NBP 61.38 Increased By ▲ 0.54 (0.89%)
OGDC 182.70 Increased By ▲ 3.73 (2.08%)
PAEL 25.40 Decreased By ▼ -0.30 (-1.17%)
PIBTL 6.23 Increased By ▲ 0.17 (2.81%)
PPL 148.13 Increased By ▲ 1.98 (1.35%)
PRL 24.75 Decreased By ▼ -0.16 (-0.64%)
PTC 16.20 Increased By ▲ 0.06 (0.37%)
SEARL 69.70 Decreased By ▼ -0.50 (-0.71%)
TELE 7.35 Increased By ▲ 0.13 (1.8%)
TOMCL 36.45 Increased By ▲ 0.25 (0.69%)
TPLP 7.87 Increased By ▲ 0.03 (0.38%)
TREET 15.48 Decreased By ▼ -0.11 (-0.71%)
TRG 52.60 Increased By ▲ 2.24 (4.45%)
UNITY 26.95 Increased By ▲ 0.05 (0.19%)
WTL 1.25 Increased By ▲ 0.01 (0.81%)
BR100 9,852 Increased By 57.8 (0.59%)
BR30 30,014 Increased By 367 (1.24%)
KSE100 92,501 Increased By 479.2 (0.52%)
KSE30 28,801 Increased By 136.7 (0.48%)
World

Geopolitical fragmentation could cut global growth by 2%: IMF

  • Research finds growing geopolitical tensions causing reallocation of FDI away from countries that are geographically close and towards those that are geopolitically close
Published April 5, 2023

WASHINGTON: Growing geopolitical fragmentation around the world, including the US-China trade war and the Russian invasion of Ukraine, could cut global growth by two percent, the International Monetary Fund (IMF) said Wednesday.

Research by the IMF found that growing geopolitical tensions were causing a reallocation of foreign direct investment (FDI) away from countries that were geographically close and towards those that were geopolitically close, like the US and Europe.

This reallocation of FDI has the potential to cause serious damage to emerging market economies, the IMF said, since they are more reliant on inflows of investment from more geopolitically distant countries.

‘Reshaping Development for a New Era’: ‘Spring meetings’ of WB, IMF will start next week

“In general, a fragmented world is likely to be a poorer one,” IMF officials wrote in a blog post published Wednesday to accompany the research.

The IMF also published research on Wednesday outlining the impact to the banking sector of geopolitical fragmentation, highlighting the cost to Russia and its allies of the 2022 invasion of Ukraine.

“Cross-border banking and portfolio debt flows to Russia and its allies (countries that rejected the motion in the United Nations in March 2022 to condemn Russia’s war on Ukraine) have reversed sharply, with allocations falling by about 20 and 60 percent relative to prewar levels, respectively,” IMF officials wrote in a blog post.

The report found that rising tensions between investing and recipient countries like the US and China had reduced the overall bilateral cross-border allocation of portfolio investment and bank claims by around 15 percent.

Comments

Comments are closed.

Tulukan Mairandi Apr 05, 2023 09:23pm
Pakistan growth forecast is merely 0.4%. If that's cut by 2%, it means Pakistan economy will contract by 1.6%. While yearly population growth is 1.8%. The odds of a default in 2023 is 99%. Withdraw your savings and hold it tight. And keep weapons at home.
thumb_up Recommended (0)
M.A Apr 06, 2023 11:43am
Unfortunately, things are getting worse since the events of September 11, 2001, especially on the economic, social and security levels in all parts of the world, specifically against developing countries.
thumb_up Recommended (0)