World stocks tumble after International Monetary Fund slashes economic growth forecast

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"Looking ahead, clouds appear on the horizon", the report, published at the body's annual meeting in Bali, Indonesia, says.

"There's no rationale for International Monetary Fund tax dollars - and associated with that, American dollars that are part of the International Monetary Fund funding - for those to go to bail out Chinese bondholders or China itself", Pompeo told USA television station CNBC.

Growth estimates for the euro area and Britain also was revised down.

Meanwhile, rising interest rates are also pressuring some emerging markets with capital outflows, notably Argentina, Brazil, Turkey and South Africa.

U.S. growth this year remained steady at 2.9 percent but is set to slow in 2019 as the effect of Trump's sweeping tax cuts wear off and the trade dispute with China begins to set in. Citing the impact of US taxes on Chinese imports, however, the International Monetary Fund shaved the outlook for China next year to 6.2 percent, which would be the country's slowest growth since 1990.

The IMF downgraded the economic growth forecasts for the whole region of the Middle East, North Africa, Afghanistan, and Pakistan, compared to the April edition of the World Economic Outlook, reflecting "to an important extent the worsening of growth prospects for Iran, following the reimposition of United States sanctions", the IMF said in the October outlook.

The US growth forecast for 2019 is down from 2.7% to 2.5%.

United States stimulus also adds to the "already-unsustainable" debt and deficit that will undercut future growth, the report warned.

The IMF also predicted that Bangladesh's consumer prices would reach 5.8 percent at the end of this year and 6.1 percent next year. "Poverty will lead to an increasing crime rate and the tall claims of 10 million jobs and five million house would not materialize", Wizarat warned.

Market analyst Muzammil Aslam, while speaking to DawnNewsTV said that once Pakistan would receive funds from the IMF, the economy would stabilise.

"But there is no denying that the susceptibility to large global shocks has risen", Obstfeld said. "Any sharp reversal for emerging markets would pose a significant threat to advanced economies", said Obstfeld.

The Washington-based institution had predicted a 2019 growth rate of 1.5 percent for Russian Federation in its last update in July. The S&P 500 index edged 0.1 percent lower to 2,884.43, while the Dow Jones Industrial Average gained 0.2 percent to 26,486.78. U.S. President Donald Trump has frequently accused China of manipulating its currency for a trade advantage.