International Monetary Fund says global economy will slow after 2019

The World Economic Outlook report released on Tuesday, said that India's growth projections of 7.4 percent for this year and 7.8 percent for next year remained unchanged from the earlier estimates.

The IMF adjusted up the country's gross domestic product growth in January, with the revision in line with Seoul's growth outlook for 2018.

The IMF also revised the deficit of the current account of the country's balance of payment for 2018, to 3.7 percent of GDP from 3 percent of the GDP, and for 2019 - to 3.5 percent from 3 percent of GDP.

Global growth is expected to tick up to a 3.9 percent rate in both 2018 and 2019, according to the report.

The sweeping United States tax cuts approved in December will fuel higher growth only through next year, the International Monetary Fund said.

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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.

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The International Monetary Fund has said the tax cuts introduced by the Trump administration will give a temporary boost to the U.S. economy, but the tax reform effects will wear off in two years time.

"A projected increase in India's growth provide some offset to China's gradual slowdown and emerging Europe's return to its lower-trend growth rate", the report said.

In the U.S., the Trump tax reform will also weigh on the economy after 2020, as it phases out full expensing for investment.

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However, the International Monetary Fund warns future growth prospects look challenging for advanced economies faced with ageing populations and low productivity growth, making it hard for household income growth to return to their pre-GFC pace.

"The prospect of trade restrictions and counter-restrictions threatens to undermine confidence and derail global growth prematurely", said Maurice Obstfeld, the fund's economic counsellor and director of the research department.

However, he said these trends were more due to technological change than to trade, and that the recent tariffs and bilateral trade negotiations announced by the United States would do little to help the multilateral or overall USA external account deficit.

He says the reason for the deficit is that total spending in the USA exceeds income.

The forecasts for China and India, key drivers of global growth, were unchanged from January. On the other hand, the projection for China is 6.6 and 6.4 percent in the two years respectively. The forecasts for this year and next have been raised.

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This is the highest share of countries experiencing a year-over-year growth pickup since 2010.

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