International Monetary Fund lowers SA's economic growth forecasts

Emerging Markets Look to Contain the Damage

"Notwithstanding the present demand momentum, we have downgraded our 2019 USA growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation".

It is expected to grow 1.4 percent in 2019, down from a previous estimate of 1.7 percent, the Fund said in its latest World Economic Outlook report.

Mr Khan's government had been seeking economic lifelines from its allies, including new bridge loans from China and a deferred payments scheme for oil with Saudi Arabia, but there were no large-scale deals.

While the global economy is still on track to match last year's pace, which was the strongest since 2011, the new outlook suggests fatigue is setting in and the overall performance masked mounting weakness in emerging markets from Brazil to Turkey.

If projections are true, then India would regain the tag of fastest growing major economies of the world, crossing China with more than 0.7 percentage point in 2018 and an impressive 1.2 percentage point growth lead in 2019.

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

Gian Maria Milesi-Ferretti, deputy director at IMF's research department made this known on Tuesday while addressing journalists at the ongoing annual meetings of the International Monetary Fund and World Bank Group in Bali, Indonesia.

"These efforts should be supported by further reductions in subsidies and enhanced compliance with the Goods and Services Tax", the International Monetary Fund report said.

Gyroscope malfunction forces Hubble Space Telescopes into safe mode
Dr Osten says the decision "buys lots of extra observing time" - noting that the astronomy community wanted that "desperately". After this third and final older-type gyroscope failed, technicians have tried to bring the balky enhanced gyro back online.

But China's involvement could also bring potential risks, he said.

Some energy-rich emerging market countries have fared better due to higher oil prices, with Saudi Arabia and Russian Federation seeing forecast upgrades.

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". Threats include a further inflaming of the trade war between the United States and countries including China, and a sharper-than-expected rise in interest rates, which would accelerate capital flight from emerging markets.

"Where we are now is we've gotten some bad news. Our probability that we would attach to further bad news has gone up", Obstfeld said. -China trade war, coupled with threatened global USA automotive tariffs and retaliation from trading partners.

Tensions have soared in recent months with Donald Trump's administration rolling out billions of dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington views as unacceptable trade practices by the Asian giant.

The model also includes the effects of a reduction in business confidence that reduces investment and leads to a tightening of financial conditions.

The euro area will expand 2 per cent this year, down 0.2 point from July, as a result of weaker than expected growth in the first half of the year. Angola, contracting by 0.1 percent this year.

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