International Monetary Fund sees growth falling at 4pc in FY2019

US / China trade war and Brexit threaten global growth says IMF

US / China trade war and Brexit threaten global growth says IMF

The IMF has also revised down its forecast for Indonesia's growth. Australia's S&P/ASX 200 gave up 1.0 per cent to 6,041.10.

The fund downgraded its forecast for USA growth next year to 2.5 per cent, down 0.2 percentage point from July, after factoring in the impact of tariffs imposed by the Trump administration and retaliatory duties by other nations.

The three leading economies of the continent, Nigeria, South Africa and Angola were projected "to witness sluggish growth in 2019 and beyond".

To offset the effects of Federal Reserve rate rises, U.S. trade tariffs and domestic economic pressure caused by tighter financial regulation aimed at reducing debt risks in China's financial system, the Chinese authorities have eased monetary policy and the implementation of proposed new financial regulations.

Addressing a news conference at the International Monetary Fund and World Bank annual meetings in Bali, the IMF's Maurice Obstfeld cautioned that increased Chinese involvement in Pakistan's economy could bring both benefits and risks.

"Notwithstanding the present demand momentum, we have downgraded our 2019 United States growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation".

But in its latest World Economic Outlook, the International Monetary Fund cut its global economic growth forecasts for 2018 and 2019, saying trade policy tensions and the imposition of import tariffs are taking a toll on commerce while emerging markets struggle with tighter financial conditions and capital outflows. Over the medium term, growth is expected to gradually slow to 5.6 per cent as the economy continues to make the transition to a more sustainable growth path with continued financial de-risking and environmental controls, it noted.

The IMF said that trade policy tensions and the imposition of import tariffs were taking a toll on commerce while emerging markets struggle with tighter financial conditions and capital outflows.

The State Bank of Pakistan said it believes "this adjustment in the exchange rate, along with lagged impact of recent hikes in [interest rates] and other policy measures to contain imports will correct the imbalances in the external account". In 2017, India had clocked a 6.7% growth rate.

Foreign-currency reserves have plunged 40% in 2018 to the lowest in nearly four years, while the nation is running twin current-account and budget deficits of more than 5% of gross domestic product.

The country recorded an average 4.7 percent growth between 2000 and 2009.

"In Angola, the region's second largest oil exporter, real GDP is expected to shrink by 0.1 per cent in 2018, following a 2.5 per cent contraction in 2017, but is projected to increase by 3.1 per cent in 2019".

Since the last GFSR in April, global economic conditions have become less balanced, with a more pronounced divergence between advanced and emerging economies.

The IMF expects that Russia's growth will reach 1.8 percent in 2019, according to the World Economic Outlook report released on Tuesday.