Maurice Obstfeld, the IMF's chief economist, said at a media briefing about the fund's latest World Economic Outlook: "When you have the world's two largest economies at odds, that's a situation where everyone suffers". "Thus, policymakers still have an excellent opportunity to build resilience and implement growth-enhancing reforms", Mr. Obstfeld said.
"In several key economies, moreover, growth is being supported by policies that seem unsustainable over the long term", he said.
The UK economy is expected to grow by 1.4% this year - down from April's prediction of 1.6% - while predicted growth for 2019 remains at 1.5%, a slowdown from 1.7% in 2017. However the U.S., one of the IMF's biggest donors, has raised fears Pakistan could use any bailout money to repay mounting loans from China, sparking criticism from Islamabad.
Lagarde earlier Thursday said the International Monetary Fund had yet to receive anything formal from Islamabad but that she would meet with the Pakistani delegation in Bali.
He further stated that growth in the United States, buoyed by a pro-cyclical fiscal package, continues at a robust pace and is driving USA interest rates higher, but US growth will decline once parts of its fiscal stimulus go into reverse.
In a downcast assessment on the global economy, the International Monetary Fund pointed the finger at trade policy tensions as part of its reason for predicting slower global growth.More news: Cyclone Titli: Eastern India battered by deadly storm
"The continent could do much better once these economies are on a more solid footing, particularly South Africa and Nigeria, because they are really large and affect a number of countries in their neighbourhood".
The IMF said the balance of risks was now tilted to the downside, with a higher likelihood that financial conditions will tighten further as interest rates normalize, hurting emerging markets further at a time when US-led demand growth will start to slow as some tax cuts expire.
The UK economy is expected to expand by 1.4% this year and 1.5% in 2019.
The IMF warned of a permanent hit to growth if the US goes ahead with a threat to impose a 25 percent tariff on all imported cars. The rupee was trading at 124.3 at close of business Monday, before the announcement was made.
IMF-WB meetings organizing committee Susiwijono, who is also secretary to the Coordinating Economic Minister, stressed that the government had anticipatory measures in place for managing natural disasters in coordination with relevant institutions like the Bali Police and the National Disaster Mitigation Agency (BNPB). "Any sharp reversal for emerging markets would pose a significant threat to advanced economies, as emerging market and developing economies' GDP now constitutes about 40 percent of world GDP at market exchange rates".