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While tax cuts and increased spending have seen an immediate upswing in United States 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.

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.

"Owing to these changes, our global growth projections for both this year and next are downgraded to 3.7 percent, 0.2 percentage point below our last assessments and the same rate achieved in 2017", the report said.

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.

But the U.S. tax cuts and rising spending that have boosted growth, helping compensate for the impact of the growing trade conflict, could spark a sudden "inflation surprise", and in turn lead to faster-than-expected rise in United States interest rates, according to the fund. Rather than rising, growth has plateaued at 3.7 percent. It now expects the global economy to only expand by 3.7% in 2018 and 2019, down from 3.9% before.

"We have not been formally approached yet", said Maurice Obstfeld, the IMF's top economist, during the fund's annual meeting in Bali Tuesday. "The negative revisions for emerging market and developing economies are more severe, at minus 0.2 and minus 0.4 percentage point respectively for this year and next year".

Donald Trump's trade wars are starting to have a serious impact on the global economy, the International Monetary Fund has warned.

Monday's announcement sparked a devaluation of the rupee with the currency trading at 134 for a dollar at the official rate, against 124 the day before.

"But there is no denying that the susceptibility to large global shocks has risen", Obstfeld said. Tighter financial conditions in advanced economies also could cause disruptive portfolio adjustments, sharp exchange rate movements, and further reductions in capital inflow to emerging markets with weaker fundamentals and higher political risk, it added.

He continued: "Trade policy reflects politics and politics remain unsettled in several countries, posing further risks".

"Ensuring that growth is inclusive is more important than ever".

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).