International Monetary Fund warns Nigeria on tough times ahead

With trade growth set to slow sharply amid a trade war between the United States and China, the International Monetary Fund cut its outlook for global GDP by two-tenths to 3.7 percent for 2018 and 2019, according to the quarterly World Economic Outlook Report issued Monday.

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.

The fund cut its 2019 United States growth forecast from 2.7 per cent to 2.5 per cent, and the China growth forecast from 6.4 per cent to 6.2 per cent.

The financial market volatility will likely continue next year, because the US Federal Reserve, after raising the federal funds rate by 25 basis points in its September 26 meeting, nonetheless signaled another rate hike by the end of this year and maintained its projection for three rate hikes in 2019.

The IMF has, therefore, not changed its estimate for the US' growth in 2018 keeping it as is at 2.9%.

India's medium-term growth prospects remain strong at 7.75 per cent, benefiting from ongoing structural reform, but have been marked down by just under 0.5 percentage point relative to the April 2018 WEO, it said.

To offset the effects of Federal Reserve rate rises, USA trade tariffs and domestic economic pressure caused by tighter financial regulation aimed at reducing debt risks in China's financial system, the Chinese authorities have eased monetary policy and the implementation of proposed new financial regulations.

The report also takes stock of global regulatory reform 10 years after the global financial crisis.

Further moves towards a trade war could "significantly harm global growth".Other threats to trade, such as a disorderly Brexit, could also "adversely affect market sentiment", the International Monetary Fund argues.

The eurozone's 2018 growth forecast was cut to 2.0 percent from 2.2 percent previously, with Germany particularly hard hit by a drop in manufacturing orders and trade volumes.

"The reason for this, according to Maurice Obstfeld, the IMF's chief economist is because, "(The) US growth will decline once parts of its fiscal stimulus go into reverse. The U.S. economy is expected to grow 2.5 percent in 2019. German growth was revised down to 1.9 percent in both 2018 and 2019 due to a slowdown in exports and industrial production. "Any sharp reversal for emerging markets would pose a significant threat to advanced economies".

She thus urged global economies to use the current growth momentum, ("because we still have it") to implement the right policy actions in the areas earlier outlined, so as to be able to achieve the goals set out for global economic prosperity.

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.

Trump has repeatedly touted Wall Street records as proof of the success of his economic programme including his confrontational trade strategy, and has frequently criticised the Fed for gradually raising interest rates, which could press the brakes on equity markets.