ADB approves $50 mln additional contribution for CGIF

ISLAMABAD: The Asian Development Bank (ADB) has approved a US $ 50 million additional capital contribution to support the guarantee operations of the Credit Guarantee Investment Facility (CGIF).

CGIF, a trust fund of ADB created to promote the development of deep and liquid local currency and regional bond markets in the ASEAN+3 region.

According to ADB statement received here, the CGIF was established in April 2010 with an initial capital of $700 million, including a $130 million capital contribution from ADB.

The ADB’s additional capital contribution will support regional cooperation within ASEAN+3 and promote financial resilience by allowing corporations and infrastructure projects to gain access to local currency and regional bond markets, the statement added.

It will encourage cross-border issuances, especially for corporations domiciled in those ASEAN countries still developing a fully functioning bond market.

Additional benefits include a broadening of issuers’ investor base by providing increased credit protection and more harmonization of standards and practices for bond issuance within ASEAN+3, paving the way for greater regional financial market integration.

ADB will continue to support CGIF as its third largest contributor (after Japan and the PRC) and as trustee.

Earlier on July 18 The Asian Development Bank (ADB) said South Asia will remain the fastest-growing sub-region in the world in its Asian Development Outlook Supplement.

The region projected by the ADB to grow by 6.8 percent in year 2019 and 6.9 percent in 2020.

Pakistan’s outlook is for a sharp drop in growth as growth rate in the country remained at 3.3 percent in the past fiscal year, which is the minimum in past eight years, bank said.

Pakistan’s economy faces key challenges of current account and trade deficits, the report said.

Inflation rate in Pakistan registered sharp increase in previous year , it said.

Following a pronounced widening of its balance of payments deficit in 2018, Pakistan likely embarks on austerity measures supported by the International Monetary Fund, the ADB said.

ADB outlook put Bangladesh on top in terms of speed of growth among 45 Asia-Pacific nations.

The country’s growth accelerated in fiscal year 2018 on higher public investment and stronger consumption demand with a revival in exports, it said.

ADB lowered India’s GDP growth forecast to 7 per cent for the current year on the back of fiscal shortfall concerns. “India is expected to grow by 7 per cent in 2019 (FY20) and 7.2 per cent in 2020 (FY21), slower than projected in April,” ADB said

The ADB has forecast lowering of inflation in the South Asian region.

The bank also predicted an expected decline in inflation across the world due to cut in crude oil and food prices.