Japan’s policy shift to impact global markets

The International Monetary Fund (IMF) on Thursday warned of “uncertainty” around the direction of Japan’s monetary policy, saying a possible shift from ultra-low interest rates could have a significant impact on global financial markets.

Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, also pointed to risks surrounding Asia’s economic outlook including from weakening exports to advanced economies, slowing productivity in China and a fragmentation of global trade.

“Over the medium term, we expect the Chinese economy to experience a slowdown in productivity and investment, which will lower growth below 4% by 2028,” he said. “In addition, we see a risk that the global economy fragments into trading blocs,” which could deal a particularly heavy blow to Asia.

Published in The Express Tribune, May 5^th, 2023.

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