"There is no denying that the susceptibility to large global shocks has risen", the IMF's top economist Maurice Obstfeld told reporters after the fund cut its outlook for global GDP growth by 0.2 percentage points to 3.7 percent for 2018 and 2019.
Citing the U.S. tariffs on China and Beijing's retaliatory measures, as well as U.S. President Donald Trump's plan to impose global automobile and parts tariffs, International Monetary Fund chief economist Maurice Obstfeld said he regards "further disruption in trade policies" as major near-term downside risks. The US growth forecast was cut by 0.2 percentage points in 2019 tp 2.5pc.
U.S. Treasury Secretary Steven Mnuchin is expected to meet with worldwide finance officials in Indonesia this week during IMF and World Bank summits, though as of Monday he had no meetings scheduled with Chinese officials - as reported by Reuters. Trump has justified the higher US tariffs as a response to the trade imbalance between the two countries, and China has swiftly responded with higher levies on USA imports.
The IMF boss also decried the nation's current earnings from its non-oil revenue which she said is just 5 percent of the country's gross domestic production (GDP). 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.
Growth estimates for the euro area and Britain also was revised down.More news: Venezuela says jailed lawmaker took his own life
"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.
It also slashed its outlook this year for 19 countries, including several eurozone member states and emerging markets.
The fund kept its forecast for growth in the Chinese economy unchanged at 6.6 percent this year.
The Fund says the global economy's growth target has dropped by 2 percent from the initial 3.9 percent.
Mr Milesi-Ferretti noted Nigeria's (economic) growth of about 1.9 per cent this year to rise to about 2.3 in 2019, with South African economy, now in technical recession at only 0.8 per cent growth rate this year.More news: Malaysia to abolish colonial-era Sedition Act, death penalty
Already the Federal Reserve interest rates hikes are increasing pressure on emerging market economies by fueling an outflow of capital as investors seek higher returns, while increasing borrowing costs at the same time.
Rebuilding Fiscal Buffers It noted that public debt has increased in emerging markets over the past decade, and is projected to increase further in numerous largest economies over the next five years.
USA stimulus also adds to the "already-unsustainable" debt and deficit that will undercut future growth, the report warns.
In its latest World Economic Outlook Report on World Economy and Financial Surveys, the Bretton Woods institution said inflation will average 8 per cent in 2018 and 2019 respectively.More news: Unscathed by Hurricane Michael, Lake City friends test their luck
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