Latin American economy expected to grow in next two years

The US is threatening to impose tariffs or quotas against Chinese steel flooding the world market

The rising confidence reflected in the Washington-based fund's worldwide outlook comes despite it downgrading forecasts for U.S. expansion to 2.1 per cent for this year and next year, shaving 0.2 and 0.4 of a percentage point off earlier growth forecasts respectively.

The International Monetary Fund has revised upwards its 2017 growth expectations for China, Japan and the euro area countries but downgraded the forecast for the U.S. and United Kingdom, leading to a balanced outlook overall.

In an update to its April projections published Monday, the International Monetary Fund revised up its growth forecasts for many eurozone countries, including the big four of Germany, France, Italy and Spain, after stronger than anticipated first quarter figures.

The IMF in April raised its forecasts for British growth after the economy withstood the initial shock of the referendum decision in June previous year to leave the EU.

China's growth projections have also been revised upwards, reflecting a strong first quarter of 2017 and expectations of continued fiscal support.

Recent data including faster growth in trade suggested that the world economy was entering its "broadest synchronized upswing" of the last decade, he said.

Yet it said that such lending could increase the risks to China's economy in the medium term, as debt continues to build up. The 6.7-percent forecast will leave the world's second-largest economy on par with its growth level in 2016.

The Trump administration came into office six months ago with an ambitious plan to use tax cuts and other measures to boost economic growth to 3 percent or 4 percent, rates not seen in years.

UK GDP grew by just 0.2% in the first quarter of 2017, making it the worst performing major economy.

"Rich market valuations and very low volatility in an environment of high policy uncertainty raise the likelihood of a market correction, which could dampen growth and confidence", said the fund, which also cited China's credit growth and protectionist policies as threats.

The IMF said the anticipated decrease in growth for the United States' economy is linked to "less expansionary" fiscal policy - likely a reference to President Donald Trump's "America first" approach to economic relations.

Asserting the need to build up financial sector resilience and rein in leverage and lower financial risks, he warned that tightening financial conditions globally might trigger spillovers to emerging markets.

The lead eurozone economist at Oxford Economics, Ben May, thinks the IMF's forecast may actually turn out to be too cautious.

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