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In the fund's latest Global Economic Outlook, it estimated that the South African economy would grow by 0.8% this year, down from its initial projection of 1.5% in April.

Maurice Obstfeld, the IMF Economic Counsellor, warned against the rising tide of protectionism, saying that without multilateralism "the world will be a poorer and more risky place".

The latest of these exchanges saw US President Donald Trump impose a 10 percent tariff on $200 billion (£153 billion) worth of Chinese goods in September, which would increase to 25 percent by the end of 2018.

The IMF expects a 2.9 percent growth outlook on the USA economy, but thinks growth will shrink to 2.5 percent for 2019, attributing to the slowdown to the country's escalating trade war with China.

The Breton Woods institution, which said this at the Annual General Meetings of the IMF/World Bank now going in Bali, Indonesia, also revised downwards growth prospects for Nigeria in 2018 from 2.1 per cent to 1.9 per cent.

The Federal Reserve, the US central bank, has raised short-term USA rates three times this year as the American economy gains strength more than nine years after the end of the Great Recession.

"Today, it was decided that we should start talks with IMF", Finance Minister Asad Umar told GEO TV in an interview on Monday night.

USA tariffs on China, and more broadly on auto and auto part imports, may disrupt established supply chains, especially if met by retaliation, it added.

Rising trade tensions are a key challenge to the world economy as "protectionist rhetoric increasingly turned into action". In 2017, India had recorded a 6.7 per cent growth rate.

The IMF pointed out that a full-blown trade war between the world's largest and second largest economies will cause a significant dent to the economic recovery from the Great Recession of 2018.

At the worst, which includes Trump pushing through with tariffs on all Chinese goods and on imports of cars and auto parts that spark a round of reprisals, as well as denting confidence and provoking a negative market reaction, the impact would be less than one percentage point on global growth. German growth was revised down to 1.9 percent in both 2018 and 2019 due to a slowdown in exports and industrial production. "Trade policy reflects politics, and politics remain unsettled in several countries, posing further risks", he added.

United States stimulus also adds to the "already-unsustainable" debt and deficit that will undercut future growth, the report warns.

It said interest rates could go up quickly depending on events in the US.

The report said: "In the United Kingdom, where the output gap is closed and unemployment is low, a modest tightening of monetary policy may be warranted, although at a time of heightened uncertainty, monetary policy should remain flexible in response to changing conditions associated with the Brexit negotiations". It dropped 0.3 percent to $83.91 per barrel in London.


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