International Monetary Fund maintains 3-pct growth forecast for S. Korea

Beyond that horizon, it was more pessimistic, projecting global growth will fade as central banks tighten monetary policy, the USA fiscal stimulus subsides and China's gradual slowdown continues.

Meanwhile, the global economy as a whole is expected to move up 3.9 percent in 2018, unchanged from its earlier forecast, with the Washington-based fund predicting the same level of growth for the following year.

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.

But IMF chief economist Maurice Obstfeld dismisses the idea that the steps taken by the USA can reduce the deficit.

"An increase in tariffs and non-tariff trade barriers could harm market sentiment, disrupt global supply chains, and slow the spread of new technologies, reducing global productivity and investment", the fund said.

Despite the recent global economic upswing, public optimism about trade had been "eroded" by "long-standing trends of job and wage polarization, coupled with persistent sub-par growth in median wages", Mr Obstfeld said.

China has since announced a series of retaliatory measures, while Trump has continually demanded that Beijing act to reduce its trade surplus with the United States.

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Investors with $543 billion of assets are the least optimistic about global growth momentum since the United Kingdom voted to leave the European Union, according to Bank of America Merrill Lynch.

The U.S. economy will grow 2.9% this year, the IMF said, up 0.2 percentage point from the fund's forecast in January.

"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".

The IMF foresees the nation's economy surging by 7.4 percent this year and 7.8 percent in 2019, also unchanged from its previous outlook in January.

The "escalating tensions" over trade present a growing risk to the world economy, Obstfeld said.

Southeast Asia's booming economies of Indonesia, Malaysia, the Philippines, Thailand and Vietnam will collectively maintain growth above five percent this year and next, the fund said. The forecasts for this year and next have been raised. International Monetary Fund also lowered its outlook for the Middle East and North Africa this year by 0.2 point, to 3.2%.

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