The IMF slashed its global growth predictions this week, and is now forecasting 3.7 percent global growth in both 2018 and 2019.
Thursday's magnitude 6.0 quake offshore north of Bali shook the area where the IMF-World Bank delegates are meeting, but there were no signs of significant damage. They also want to help further stimulate exports.
Addressing the media on the World Economic Outlook, in Bali, Indonesia, Mr. Obstfeld said developments on the global market have warranted a revision of their earlier decision.
The downgrade reflects a confluence of factors, including the introduction of import tariffs between the United States and China, weaker performances by euro zone countries, Japan and Britain.
The outflows under its estimated tail-risk scenario are much higher than during the European sovereign debt crisis in the fourth quarter of 2011, for instance, when United States interest rates were low and the dollar was weaker, but risk aversion was high.
"US growth will decline once parts of its fiscal stimulus go into reverse", International Monetary Fund chief economist Maurice Obstfeld said in a statement. The country returned to a growth rate of 1.5 percent in 2017 after two years of decline. The fund lent Islamabad $6.7 billion in 2013.
The euro zone's 2018 growth forecast was cut to 2% from 2.2% previously, with Germany particularly hard hit by a drop in manufacturing orders and trade volumes. It had previously predicted jobless rates of 5.5% and 5.2% respectively.
Combined with trade tensions, this had created "a bit of an unprecedented situation" for the world economy, she said.
"But there is no denying that the susceptibility to large global shocks has risen", Obstfeld said.
Its analysis sees a tail risk that emerging-market economies - excluding China - could face medium-term debt outflows, similar in magnitude to that during the global financial crisis.
The spokesperson said the US Secretary of State had spoken about this a few months back.
"[To] really understand the extent and composition of that debt, both in terms of sovereign, in terms of state-owned enterprises and the like of it", she continued, "the Fund needs a full picture so that we can actually really appreciate and determine the debt sustainability of that country, if and when we consider a programme".
"We are all deeply concerned about this news and the potential impact on the business".
"I think the Fed has gone insane", he said.
It had warned how the U.S. and China was making the world a "poorer and more risky place" as the nations remain locked in a tit-for-tat trade conflict, slapping strings of tariffs on each other.
The effects on the U.S. and China would be particularly severe, with 2019 GDP losses of more than 0.9% in the USA and 1.6% in China in 2019.
She acknowledged that the World Trade Organization, based in Geneva, has made scant headway in recent years toward a global agreement on trade rules that can address issues like complaints over Chinese policies U.S. President Donald Trump says unfairly extract advanced technologies and put foreign companies at a disadvantage in a quest to dominate certain industries.
It also assumes that Trump imposes a 25% tariff on imported cars and auto parts imports.