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IMF downgrades its growth forecast for Asia amid spike in Covid-19 delta variant cases

The International Monetary Fund (IMF) Tuesday downgraded its 2021 economic growth forecast for Asia after the highly infectious Covid-19 delta variant caused a spike in cases in parts of the region.  

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IMF downgrades its growth forecast for Asia amid spike in Covid-19 delta variant cases
GNN Media: Representational Photo

IMF said that it expects Asia’s economy to grow by 6.5% in 2021, compared with its April forecast for a 7.6% expansion.

“The global COVID-19 pandemic is still ravaging the region,” the Fund said in its Regional Economic Outlook report for Asia and the Pacific.

Asian countries were relatively successful in containing Covid last year. But this year, some — including India, Malaysia and Vietnam — had to fight fresh waves of infections while vaccination rollouts were slow to take off.

The resurgence in Covid infections prompted stricter containment measures, which weighed down the services sector and led some factories to temporarily shut. That dampened Asia’s economic outlook even as demand for exports was strong, said the IMF.

Within the region, developing economies suffered the largest economic growth downgrades by the IMF.  

Myanmar, where a military coup took place in February, is forecast to contract by 17.9% this year — 9 percentage points more than the Fund’s previous projection. The growth forecast for the Philippines was slashed 3.7 percentage points to 3.2%, while that of Malaysia was lowered by 3 percentage points to 3.5%.

Meanwhile, the IMF upgraded its growth forecasts for several advanced Asian economies. Hong Kong is now expected to grow 6.4% in 2021, up from 4.3% previously; while the forecast for Singapore’s growth was bumped up to 6%, from 5.2%. 

Still the world’s fastest growing region

Despite the downgrade, Asia will remain the fastest growing region globally this year, the IMF said.

The region’s growth will be led by China and India, the Fund added. The IMF expects China to grow 8% this year and India by 9.5% in the fiscal year that ends next March.

The Fund said factors such as fresh waves of Covid infections could threaten its economic projections for the region.

“The projections are subject to high uncertainty regarding the emergence of new variants, the outlook for supply chain disruptions and inflation, and shifts in global financial conditions,” it said.

The IMF also warned of “untimely policy normalization or misconstrued policy communications” in the U.S. It said that could cause significant capital outflows from the region, and result in higher borrowing costs for Asian emerging markets.

SOURCE: CNBC

Faisal Ali Ghumman

Mr. Ghumman is a seasoned journalist who has 19 years of diversified experience in print, electronic and digital media. He has worked with 92 News HD, Daily Pakistan Today, Daily The Business, Daily Dawn, Daily Times and Pakistan Observer as News Reporter, Feature Writer, Editor, Web Content Editor and Article Writer. Mr Ghumman has graduated from the Bahauddin Zakariya University Multan and is currently enrolled in M.Phil in Mass Communication at the University of Punjab.

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EU re-establishing ‘minimal presence’ in Kabul

Embassy is being opened after five months

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EU re-establishing ‘minimal presence’ in Kabul

The European Union on Thursday announced it had begun re-establishing a “minimal presence” in Kabul to facilitate the delivery of humanitarian aid in Afghanistan.

“Our minimal presence in Kabul must not in any way be seen as recognition” of the Taliban government there,” EU foreign affairs spokesman Peter Stano said in a statement. 

“This has also been clearly communicated to the de facto authorities,” he added.

Afghanistan is in the grip of a humanitarian disaster, worsened by the Taliban takeover in August that prompted Western countries to freeze international aid and access to billions of dollars worth of assets held abroad.

The country was almost entirely dependent on foreign aid under the previous US-backed government, but jobs have dried up and most civil servants haven’t been paid for months.

No country has yet recognised the Taliban, with most watching to see how the hardline Islamists -– notorious for human rights abuses during their first stint in power -– restrict freedoms.

Shortly before Stano made his comments, an Afghan foreign ministry spokesman said on Twitter that the EU was reopening “an embassy” with “a permanent presence in Kabul” for the first time in five months. 

Stano said in the statement “the EU has started to re-establish a minimal presence of international EU Delegation staff to facilitate the delivery of humanitarian aid and monitor the humanitarian situation”.

The international community is waiting to see how the Taliban Islamic fundamentalists intend to govern Afghanistan, after having largely trampled on human rights during their first stint in power between 1996 and 2001. 

While the Taliban claim to have modernised, women are still largely excluded from public employment and secondary schools for girls remain largely closed.

Several countries, including China. Russia, Turkey, the United Arab Emirates and Iran have kept their embassies in Kabul open since the Taliban victory last year, but have not formally recognised their government.

Western diplomats began to evacuate their personnel in the first half of 2021, when American troops began operations to withdraw permanently from Afghanistan. 

The withdrawal culminated at the end of August with the chaotic evacuation of 120,000 people following the Taliban’s lightning conquest of the country.

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124 snakes found with dead body in US home

Pythons, rattlesnakes, cobras and black mambas were among the snakes found inside the home

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124 snakes found with dead body in US home

In a horrible discovery, the dead body of a man – surrounded by at least 124 snakes – was found inside a house in Maryland, United States. 

The Independent reported that the incident took place in Charles Countyof Maryland. The snakes, some of which were identified to be venomous, were kept inside cages when police reached the man’s home at around 6pm on Wednesday, the Charles County sheriff’s office said.

Police said that the man had kept the snakes, some of which were venomous, inside a cage in his house. 

One of the deceased man's neighbours, after not seeing him for a day, had gone to check in on him. 

The neighbour told the police that he peeped into the house through a window after no one answered the door and saw the man, 49, lying on the floor unconscious. 

He then decided to call 911 for help. When emergency services arrived and examined the man, he was found to be dead.

Police added that the cause of death is yet to be determined, adding that "no obvious signs of foul play have been found so far."

“Inside the house, more than 100 venomous and non-venomous snakes of different varieties were discovered in tanks situated on racks,” the Charles County Sheriff’s Office said, per the report.

The man had kept different types of snakes in his house, including pythons, rattlesnakes, cobras and black mambas, police said, adding that animal control officials were examining the snakes.

The chief animal control officer of the county told police that they had "not encountered an incident like this in more than 30 years of experience."

“Charles County Animal Control is coordinating rescue efforts relating to the reptiles with assistance from reptile experts from North Carolina and Virginia,” the police said.

It should be noted that Maryland's law prohibits people from keeping snakes as pets.

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Increase in US rates could ‘throw cold water’ on global economic recovery: IMF chief

"Higher US interest rates could make it more expensive for countries to service their dollar-denominated debt"

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Increase in US rates could ‘throw cold water’ on global economic recovery: IMF chief

Kristalina Georgieva, managing director of the International Monetary Fund, has said that interest rate hikes by the Federal Reserve could “throw cold water” on already weak economic recoveries in certain countries.

Georgieva, speaking via videoconference at The Davos Agenda virtual event on Friday, said an increase in US rates could have significant implications for countries with higher levels of dollar-denominated debt.

She said it was therefore “hugely important” that the Fed was clearly communicating its policy plans to prevent surprises. Higher US interest rates could make it more expensive for countries to service their dollar-denominated debt.

On a panel moderated by CNBC’s Geoff Cutmore, Georgieva said the IMF’s message to countries with high levels of dollar-denominated debt was: “Act now. If you can extend maturities, please do it. If you have currency mismatches, now is the moment to address them.”

She added that her biggest concern is for low income countries with high levels of this debt, highlighting that two-thirds were now either in “debt distress” or in danger of falling into it — that’s twice as many as in 2015.
‘Losing some momentum’

The IMF expects the global economic recovery to continue, Georgieva said, but stressed that it was “losing some momentum.”

As such, she suggested that a New Year’s resolution for policymakers should be “policy flexibility.”

“2022 is like navigating an obstacle course,” she said, given risks such as rising inflation, the Covid-19 pandemic and high debt levels. The IMF warned in December that global debt hit $226 trillion in 2020 — the largest one-year rise since World War II.

With regards to inflation, Georgieva stressed that the problem is country specific. Prices are rising at startling speeds in a number of countries: euro zone inflation hit a record high of 5% in December, the U.K. inflation rate hit a 30-year high in the same month and the U.S. consumer price index rose at its fastest pace since June 1982.

“That country specificity is what makes 2022, in a way, even more difficult than 2020,” Georgieva said.

“In 2020, we had similar policies everywhere because we were fighting the same problem — an economy in standstill. In 2022, conditions in countries are very different, so we cannot anymore have the same policy everywhere, it has to be country specific and that makes our job in 2022 so much more complicated.”

SOURCE: CNBC

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