The fund also slightly lowered its forecast for Japan's economy to 1.1% growth in 2018, down 0.1 of a percentage point from an April estimate, but maintained a prediction for a 0.9% Japanese expansion in 2019.
While tax cuts and increased spending have seen an immediate upswing in USA growth, the International Monetary Fund warned that the country could face an unwelcome "inflation surprise", which would prompt the Federal Reserve, America's central bank, to hike rates at a faster-than-expected pace.
In its latest World Economic Outlook report, the International Monetary Fund conducted a series of calculations of the impact from the trade tariffs that the administration of US President Donald Trump has already implemented and has threatened to impose, as well as reprisals from China and other nations.
"We are concerned about the downturn in economic growth", noted Jubilee USA Executive Director Eric LeCompte.
Finance ministers and central bankers from numerous IMF's 189 member nations are meeting in Bali this week with talk of rising protectionism taking center stage.
The Hang Seng Index closed lower by 0.11 percent or 29.66 points, at 26,172.91 points.
Court convicts American pastor, allows him to leave Turkey
Lindsey Graham, R-S.C., Thom Tillis, R-N.C., and Jeanne Shaheen, D-N.H., and others for their intervention. Brunson's lawyer took the case to Turkey's highest court last week seeking his release from house arrest .
It found that global GDP output under this scenario would fall by more than 0.8 per cent in 2020 and remain roughly 0.4 per cent lower in the long-term compared to levels without these effects, which "inflict significant costs to the global economy, especially through its impact on confidence and financial conditions".
The IMF report said "protectionist rhetoric" was being "increasingly turned into action", warning such uncertainty "could lead firms to postpone or forgo capital spending and hence slow down growth in investment and demand". Not only have some downside risks that the last World Economic Outlook identified been realised, the likelihood of further negative shocks to our growth forecast has risen.
Existing, proposed and new retaliatory tariffs could cause maximum gross domestic product (GDP) losses of 1.6% in China and close to 1% in the U.S., it said.
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.
Fed rate hikes are already increasing pressure on emerging market economies by fueling an outflow of capital as investors seek higher returns.
Although the newly projected rate is same as last year's rate of 3.7 percent, this growth exceeds that achieved in any of the years between 2012 and 2016, and it occurs as many economies have reached or are nearing full employment and as earlier deflationary fears have dissipated.