Obstefeld commented: "Last April, at the time of our last World Economic Outlook, the world economy's broad-based momentum led us to project a 3.9 percent growth rate for both this year and next".
The UK economy is expected to grow by 1.4 percent this year - down from April's prediction of 1.6 percent - while predicted growth for 2019 remains at 1.5 percent, a slowdown from 1.7 percent in 2017.
Christine Lagarde, the IMF director during her opening remarks at the 2018 IMF/World Bank annual press conference Thursday in Bali Indonesia said, economies will need stronger worldwide cooperation because the global economy is strong, but it probably is not strong enough.
The fund expects U.S. economic expansion to peak at 2.9 per cent this year and start to slow down next year as the economic stimulus introduced in the wake of the 2008 global credit crisis begins to wind down and tariff impact begins to hurt. But it said that both would slow down more than earlier envisaged, and see growth of just 2.5 per cent and 6.2 per cent, respectively, next year. Two weeks after that date, Hungary's Central Statistical Office (KSH) revised first-half GDP growth up 0.1 percentage point to 4.7 percent.
But higher United States interest rates have also helped send emerging market currencies into a tailspin, as countries that borrowed heavily in dollars race to pay back debt.
The brighter outlook is due to higher non-oil growth and an uptick in oil production as global crude output cuts that started in January previous year, come to an end.
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The cut its 2019 United States growth forecast to 2.5 percent from 2.7 percent previously, while it reduced China's 2019 growth forecast to 6.2 percent from 6.4 percent.
The IMF said the RRR cut, together with other easing and stimulus policies, "may help support economic growth in the near term in the face of rising external pressures.(but) may entail greater risks to financial stability over the medium term should they set back progress toward reducing financial vulnerabilities". So, what you do see is that emerging market economies, which is where India is, there's a very fast buildup in private debt with a slowdown in the last two years, But India is basically steady.
Beijing policymakers were navigating a "difficult trade-off between growth and stability", the International Monetary Fund said in a statement. Iran's economy will shrink 1.5 per cent this year and 3.6 per cent in 2019 as oil production and exports plummet. This creates a potential blind spot for policymakers who could use this knowledge to head off economic risks, it said.
The Federal Reserve, the US central bank, has raised short-term USA rates three times this year as the American economy gains strength more than nine years after the end of the Great Recession.
Further moves towards a trade war could "significantly harm global growth".Other threats to trade, such as a disorderly Brexit, could also "adversely affect market sentiment", the International Monetary Fund argues.
It also said interest rates would need to rise to curb inflation, but urged the Bank of England to remain "flexible" depending on what happens with Brexit.