The IMF now expects South Africa's economy to expand 0.8 percent, down from a forecast of 1.5 percent in July. "Not only have some downside risks we identified in the last WEO been realized, the likelihood of further negative shocks to our growth forecast has risen".
"Nonetheless, despite trade tensions and continued monetary policy normalisation in a few advanced economies, global financial markets have remained buoyant and appear complacent about the risk of a sudden, sharp tightening in financial conditions".
In September, the US implemented another round of tariffs on $200 billion worth of Chinese goods, which were met with countermeasures out of Beijing on $60 billion worth of USA goods.
"Securing US approval on the IMF Executive Board will require Pakistan to strike a fine geopolitical balance between the Trump administration's concerns over China's growing economic engagement in Pakistan and the country's bilateral commitments", said Bilal Khan, a senior economist at Standard Chartered Plc. It is therefore closer to the government's forecast for 2.5 percent growth, and the latest projection by the European Commission (in July) for 2.3 percent.
"News of the International Monetary Fund bailout has set off a sharp fall in the value of rupee to 134 against the United States dollar".
The IMF also predicted that Bangladesh's consumer prices would reach 5.8 percent at the end of this year and 6.1 percent next year.
Obstfeld, who retires from the Fund later this year, said there were bright spots with some Latin American and African nations getting growth forecast upgrades.
China's rate of growth could decline by as much as a full percentage point or more by 2019 if a "worst-case" scenario materialises, involving further tariffs, a commensurate Chinese counter-response and a collapse in confidence by businesses and markets. Angola, contracting by 0.1 percent this year. Core inflation, which excludes volatile items such as energy, will vary from country to country, it said. The challenge for the current government is to ensure that fundamental economic structural reforms are carried out to ensure that this spiral of being in an International Monetary Fund programme every few years is broken once and for all. Not only will investment and growth suffer but exports will become more competitive due to the enhanced cost of imported ingredients.
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.
Most of the "meager gains" from growth have gone to the well off, fuelling support for protectionism and anti-establishment leaders, said Obstfeld.