The fund, releasing its latest outlook on the global economy, reduced its forecast for Australian economic growth through 2019 by 0.3 percentage points from its April prediction.
The potential failure of Brexit negotiations and "unsettled" politics pose a risk to world economic growth, the International Monetary Fund (IMF) has warned.
Finance minister Asad Umar, who will be attending the IMF's annual meeting in Bali, announced that the government will be seeking talks with the fund this week on a "stabilization recovery program". "Notwithstanding the present demand momentum, we have downgraded our 2019 USA growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation", he said, adding that China's expected 2019 growth is also marked down.
In its latest World Economic Outlook report, the International Monetary Fund conducted a series of calculations of the impact from the trade tariffs that the administration of US President Donald Trump has already implemented and has threatened to impose, as well as reprisals from China and other nations.
The IMF's primary objective is to ensure the stability of the global monetary system-the system of exchange rates and worldwide payments that enables countries (and their citizens) to transact with each other.
The IMF also cut the global growth forecast to 3.7% for both 2018, 2019 as risks rise.
Ferretti said the three largest economies of Nigeria, South Africa and Angola are holding down the growth rate of the continent.
"Overall, compared with six months ago, projected 2018-2019 growth in advanced economies is 0.1 percentage point lower, including downgrades for the euro area, the United Kingdom, and Korea".
The trade deficit has gone up 8.6 percent this year to $31 billion. "In this environment, economic growth will likely slow significantly, and inflation will rise", he said in a statement.
Financial Tensions It said after years of an extremely supportive financial environment, the global economy remains vulnerable to a sudden tightening of financial conditions.
But the United States tax cuts and rising spending that have boosted growth, helping compensate for the impact of the growing trade conflict, could spark a sudden "inflation surprise", and in turn lead to faster-than-expected rise in U.S. interest rates, according to the 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.