World stocks tumble after International Monetary Fund slashes economic growth forecast

World stocks tumble after International Monetary Fund slashes economic growth forecast

World stocks tumble after International Monetary Fund slashes economic growth forecast

It has recently taken a more accommodating stance to help buffer China's economy from the U.S. trade measures.

It predicted 2.9 percent US growth this year, dropping to 2.5 percent next year, and to 1.8 percent in 2020, as the effect of USA tax cuts wears off and the trade war with China inhibits growth.

Growth prospects in Africa are being held down by poor economic development in Nigeria, South Africa and Angola, the International Monetary Fund has said.

He continued: "Trade policy reflects politics and politics remain unsettled in several countries, posing further risks". In September, Trump imposed tariffs on almost $200 billion of Chinese imports, with China responding with higher tariffs on about $60 billion of USA imports.

In a tweet, Mr Trump warned Beijing against seeking to influence the forthcoming United States midterm elections. The reserves had fallen to $8.4 billion last week, which were enough to cover only one and half month's imports bill.

The IMF said it was now predicting 3.7 percent global growth in both 2018 and 2019, down from its July forecast of 3.9 percent growth for both years.

Downgrades to global growth also reflected predictions of a slower expansion in the eurozone as well as turbulence in a number of emerging market economies.

The IMF has cited short-term risks such as rising inflation and inflation expectations, high credit growth, and the challenging external environment for the lower 2018 and 2019 growth projections, which has also increased concerns of overheating.

The IMF had recently termed the exchange rate as "overvalued".

"A catalyst like earnings will give investors something to look forward to but right now it's just a continuation of negative news for equities, with higher yields and slowing global growth", Cardillo said. "We see the future of industry as being bleak as investors are trying hard to sustain growth momentum", Syed Mazhar Ali Nasir, senior vice president of the Pakistan Chambers of Commerce and Industry, told Arab News.

"New vulnerabilities have emerged and the resilience of the global financial system has yet to be tested", the International Monetary Fund said in the latest Global Financial Stability Report. "The report reminds us that inequality remains a serious problem and we still are not safe from financial crisis" he warned.

"If you look at emerging market economies, that includes India, you see that private debt in the last 10 years has increased quite substantially, although in the last two years, since the end of 2015, 2016 and 2017, there is a slowdown in the process of leveraging, but debt is very high and public debt is a very high as well", Gasper said.

In the United Kingdom, growth figures for the month of August will give the latest indication of how well the economy is coping with Brexit uncertainty.

The UK economy, meanwhile, is expected to grow 1.4 percent this year and 1.5 percent in 2019 - falling behind nearly all of Europe, with the exception of heavily-indebted Italy.

The IMF said a "no-deal" Brexit remained a risk.

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