International Monetary Fund expects India's economy to grow at 7.4% in 2018

"Governments need to rise to the challenges of strengthening growth, spreading its benefits more widely, broadening economic opportunity through investments in people, and increasing workers' sense of security in the face of impending technological changes that could radically transform the nature of work".

Governments should take advantage of the good times to make structural reforms and put in place tax policies that raise the potential output of their economies, Obstfeld said.

Profile What is the International Monetary Fund?

Meanwhile, the National Bank of Ukraine left its inflation growth forecast unchanged.

The IMF has bailed out scores of countries over the years, including the United Kingdom in 1976 when the minority Labour government borrowed £2.3bn from the fund to stabilise the value of the pound; Iceland in 2008; and Greece in 2010, 2012 and 2015.

That represents a slight downgrade from January's outlook of 2.3 per cent forecast for this year, and it's noticeably less than the strong three per cent growth Canada experienced in 2017.

The IMF was conceived at a United Nations conference in Bretton Woods in the USA in July 1944 to build a framework for economic cooperation to avoid the devaluations that contributed to the Great Depression of the 1930s.

He said Donald Trump's tax cuts would suck imports into the USA and increase the size of the trade deficit 2019 by $150bn - a trend that could exacerbate trade tensions.

Tourists stranded on Kauai in Hawaii due to severe flooding
By the afternoon, flood waters receded enough for a bus to take them to another shelter, the Red Cross said. The National Weather Service recorded 28.1 inches (71.3 centimeters) of rainfall in Hanalei between 2 a.m.

Maurice Obstfeld, research chief at the world's lender of last resort, said that long-term prospects for the global economy are "sobering" as escalating tensions over trade "present a growing risk" to prosperity. "Instead, it is in danger of being torn apart".

"That major economies are flirting with trade war at a time of widespread economic expansion may seem paradoxical - especially when the expansion is so reliant on investment and trade", Obstfeld added.

The International Monetary Fund said on Tuesday it expects global growth will inch up from 3.8% in 2017 - its fastest pace in six years - to 3.9% in 2018 and 2019.

The upgrade to global growth for this year to 3.9% potentially makes 2018 the strongest year since 2011, when the economy was rebounding from the financial crisis.

It also upgraded its forecast for USA growth in 2018 to 2.9%, up from 2.7% previously.

The IMF also said the country's economy could grow by 2.9 percent in 2019, the same expansion as forecast earlier.

The IMF today projected a global growth of 3.9 per cent in the next two years due to strong momentum, favourable market sentiment among other factors but warned that any trade disputes threaten to undermine confidence and derail global growth prematurely.

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