International Monetary Fund revises medium-term growth rate downward

IMF lowers SA's economic growth forecasts

"Since mid-April, rising United States interest rates and a stronger U.S. dollar - coupled with intensified trade tensions - have triggered a reversal in portfolio flows, an increase in borrowing costs, and a weakening in local currencies in some emerging markets", the report noted.

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.

They show that a burst of strong growth, fueled partly by U.S. tax cuts and rising demand for imports, was starting to wane.

But the already tricky transition has been complicated by US President Donald Trump's use of import tariffs to punish China for what he considers predatory trade practices.

Maurice Obstfeld, economic counsellor for the International Monetary Fund, said: 'Trade policy reflects politics, and politics remain unsettled in several countries, posing further risks.

"The possibility that China and US resolve their disagreements would be a significant upside to the forecast", Obstfeld said. -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, while it cut China's 2019 growth forecast to 6.2 percent from 6.4 percent.

According to the WEO report, growth is on the mend for sub-Saharan Africa, with the region's average growth projected to rise to 3.1 per cent in 2018 (from 2.7 per cent in 2017) and 3.8 per cent in 2019.

Global trade tensions would also have a bearing on the eurozone's 2018 growth forecast, which was cut to 2 percent from 2.2 percent previously.

The IMF predicts that United Kingdom public borrowing will keep falling over the next few years. "Poverty will lead to an increasing crime rate and the tall claims of 10 million jobs and five million house would not materialize", Wizarat warned.

"There is no denying that the susceptibility to large global shocks has risen", the IMF's top economist Maurice Obstfeld told reporters.

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

ASEAN 5, which includes the Philippines, Indonesia, Malaysia, Thailand and Vietnam, is also expected to sustain its 5.3 percent 2017 growth up to 2018, but will slow down next year to 5.2 percent, according to the International Monetary Fund.

Among emerging market and developing economies, the growth prospects of many energy exporters have been lifted by higher oil prices, but growth was revised down for Argentina, Brazil, Iran, and Turkey.

Stick with us for the day's rolling news.

"We will be listening very, very attentively when and if they come to us", said Obstfeld.

The IMF's analysis suggests that there is a 5 per cent probability, emerging market economies (excluding China) could face debt portfolio outflows of US$100 billion or more over a period of four quarters (equivalent to 0.6 per cent of their combined GDP), broadly similar in magnitude to the Global Financial Crisis.

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