The IMF predicts the global economy will grow by 3.7 percent in 2018 and 2019 - a 0.2 percentage point downward revision from previous forecasts.
It also said inflation in India is on the rise, estimated at 3.6 per cent in fiscal year 2017/18 and projected at 4.7 per cent in fiscal year 2018/19, compared with 4.5 per cent in fiscal year 2016/17, amid accelerating demand and rising fuel prices.
The eurozone would see its growth rate drop from 1.9% to 1.5%. The IMF downgraded its forecast for global growth this year and next to 3.7 percent (down from 3.9 percent in April).
The IMF said the balance of risks was now tilted to the downside, with a higher likelihood that financial conditions will tighten further as interest rates normalize, hurting emerging markets further at a time when USA -led demand growth will start to slow as some tax cuts expire.
The UAE's economy which grew 0.8 per cent past year, will expand 2.9 and 3.7 per cent in 2018 and 2019.
"The possible failure of Brexit negotiations poses another risk".
So far, the Fed has hiked interest rates three times this year with expectations of one more in December and three more in 2019.
United Kingdom growth has been drastically cut in the aftermath of the Brexit vote; uncertainties surrounding the country's divorce from the European Union have stymied investment and seen part of its key financial sector relocate to the continent.
In a new assessment issued at its meeting in Bali, Indonesia, the International Monetary Fund predicted that "everyone is going to suffer", as the US and China - the world's two biggest economies - spar over tariffs and other trade issues. A similar warning was also conveyed by the IMF "Global Financial Stability Report" released last week, pointing out that the tightening United States' monetary policy, coupled with trade uncertainties, have discouraged capital inflows to emerging economies, weakened their currencies and depressed equity markets.
The Economic Counsellor and Director of Research Department at the IMF, Maurice Obstfeld disclosed the Fund's new projection for global economic growth.
Developing nations make up about 48 percent of world trade, up from 33 percent in 2000, while the number of people living in extreme poverty has been reduced by half since 1990 to now just about 1 billion, according to the World Bank.
"As discussed in the April and October 2018 GFSRs, measures of equity valuations appear stretched in some markets, investors have moved into riskier asset classes in search of yield, and the share of firms with low investment-grade ratings in advanced economy bond indices has increased significantly", it explained.