The escalating U.S. -China trade war will inhibit global economic growth this year and next, the International Monetary Fund said Tuesday, even as U.S. President Donald Trump again threatened to impose higher tariffs on Chinese exports sent to the United States.
The fund also slightly lowered its forecast for Japan's economy to 1.1 percent growth in 2018, down 0.1 of a percentage point from an April estimate, but maintained a prediction for a 0.9 percent Japanese expansion in 2019. -China tariff war's impact to be felt next year, the Fund cut its 2019 USA growth forecast to 2.5 percent from 2.7 percent previously, while it cut China's 2019 growth forecast to 6.2 percent from 6.4 percent. United States output would decline by more than 0.8 per cent and China's output would dip by more than 1.6 per cent next year as a result, according to the fund's projections. The FTSE 100, which closed at 7,233.33, is forecast to open 10 points higher when trading begins shortly.
The IMF, created in 1945, is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate worldwide trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
"Notwithstanding the present demand momentum, we have downgraded our 2019 USA growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation".
The body now expects the US economy to grow at a rate of 2.5 percent in 2019, a 0.2 percentage point decline from its April estimates.
The International Monetary Fund has cut its US growth forecast for next year, warning that President Trump's protectionist trade policies will harm growth domestically and around the world.
Umar told Bloomberg in August that the government may need more than US$12 billion (RM50 billion).
"Owing to these changes, our worldwide growth projections for both this year and next are downgraded to 3.7 per cent, 0.2 percentage point below our last assessments and the same rate achieved in 2017", the report said.
Mr Obstfeld said: "Governments have less fiscal and monetary ammunition than when the global financial crisis broke out ten years ago".
He stated, "Nigeria's growth, 1.9 per cent this year; 2.3 next year".
Mounting trade tensions and stresses in emerging markets are starting to take a toll on the world economy.
She said the IMF's research has shown that excessive inequality, whether caused by technology, trade, global integration, or policies favoring capital over labor, is magnifying economic and social tensions, especially in advanced economies.
Despite some cause for positivity however, the International Monetary Fund has also suggested Switzerland's economy may slow down next year.
Pakistan's central bank issued a statement on October 9 saying the plunge in the rupee was due in part to rising oil prices, which have hiked the cost of imported oil and thus are putting pressure on Pakistan's large trade deficit.
Core inflation, which excludes volatile items such as energy, will vary from country to country, it added.
"In several key economies, moreover, growth is being supported by policies that seem unsustainable over the longer term". So, while debt-related risks in China are large, there are also buffers.