About three months (in July) after the International Monetary Fund gave a 3.9 percent global growth prediction, the organisation today downgraded its forecast on the global economy to 3.7 percent for both 2018 and 2019.
-China tariff war's impact to be felt next year, the Fund cut its 2019 US 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. Its forecast for China's 2018 GDP growth remains unchanged at 6.6%, while revised downward by 0.2 percentage points for 2019 to 6.2%.
The IMF issues the report ahead of the Annual IMF and World Bank meetings where world leaders, finance ministers and nongovernmental organizations will gather this week in Bali, Indonesia. The IMF now estimates the global economy to grow by 3.7 percent this year and next year.
On the global ratings, International Monetary Fund cut its global growth forecasts due to the trade tensions between the USA and trading partners.
Finance Minister Asad Umar says the main goal of the talks with the International Monetary Fund will be a "stabilisation recovery programme" to control the country's economic crisis.
In particular, the report said global growth would be "significantly" harmed by any further increase in trade tensions.
Asked about the US Treasury official's comments, Chinese Foreign Ministry spokesman Lu Kang said: "We have no intention of promoting exports through the competitive devaluation of our currency, and will not use the renminbi (yuan) exchange rate as a tool to respond to disputes in trade or other areas". South Africa, only 0.8 per cent this year; Angola, contracting by 0.1 per cent this year.
The exercise assumes that US President Donald Trump imposes tariffs on the remaining $267 billion worth of Chinese goods imports not already under punitive tariffs and China retaliates in kind.
The IMF said higher trade barriers could disrupt global supply chains, slow the spread of technology and ultimately lower global productivity and welfare. Rather than rising, growth has plateaued at 3.7 percent. "Not only have some downside risks that the last WEO identified been realized, the likelihood of further negative shocks to our growth forecast has risen", Obstfeld said.
The downgrade was due to the impact of financial market stress and monetary tightening in some economies, as well as the damage from the tit-for-tat tariff actions between the USA and China, the IMF said.
Both of those figures would mark the slowest rate of expansion for China since 1990, when growth shuddered in the aftermath of the violent suppression of massive Tiananmen Square pro-democracy demonstrations the previous year.