"In the United States, momentum is still strong as fiscal stimulus continues to increase, but the forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of USA imports from China", IMF report said.
As United States President Donald Trump taunted China with tariffs on a further US$267 billion (S$369 billion) of Chinese imports, leaders of global economic bodies attending the yearly meetings of the International Monetary Fund and World Bank condemned such tactics.
Finance Minister Asad Umar left for Indonesia on Monday night to participate in the annual meetings of the International Monetary Fund and World Bank at Bali, scheduled to run until October 12, and formally request a bailout programme, reports Dawn news.
"The possibility that China and USA resolve their disagreements would be a significant upside to the forecast", Obstfeld said.
The IMF projected that the nation's economy will grow from 1.9 percent in 2018 to 2.3 percent in 2019 adding that Nigeria, South Africa and Angola's slow growth economies are slowing the rest of Africa.
Both Iran and Russian Federation have condemned the Trump administration for withdrawing from the deal, a move that will reimpose USA sanctions suspended under the accord to choke off the Iranian economy.
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.
Market participants "appear complacent" about the potential risks from a "sudden, sharp tightening of conditions" - like rising interest rates or declining access to capital.
In the United States, momentum is still strong as fiscal stimulus continues to increase, but the forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of U.S. imports from China. "We look forward to our continuing partnership", it added. "Our probability that we would attach to further bad news has gone up", Obstfeld said.
More tariffs and their countermeasures "could lead to a broader tightening of financial conditions, with negative implications for the global economy and financial stability", the fund warned.
The IMF said that global growth rates have hit a plateau at 3.7%, and would continue to remain at this level in 2019-'20.
The effects on the United States and China would be particularly severe, with 2019 GDP losses of more than 0.9% in the U.S. and 1.6% in China in 2019.
A U.S. Treasury official on Monday repeated that the Trump administration was concerned about the yuan's recent weakening as the department prepares a semi-annual report on currency manipulation due out next week.
It also assumes that Trump imposes a 25% tariff on imported cars and auto parts imports.
He contended that China had "already retaliated" against his tariff increases.