The International Monetary Fund (IMF) projection published on Tuesday that global growth is forecast at three per cent for 2019, its weakest rate since 2008.
The forecast is also 0.3 per cent points below the fund’s April world growth estimate for the year.
The IMF said in its World Economic Outlook, a semi-annual report by the fund that the slowdown was caused largely by trade disputes.
The IMF also cited other risks, including a potentially disruptive Brexit.
The IMF’s chief economist, Gita Gopinath, said if there was no agreement on Brexit by the Oct. 31 deadline, it expected the British economy to turn down 3 to 5 per cent over three years, depending on Brexit.
However, it primarily reflected an expectation of improvement in the economic performance of emerging markets in Latin America, the Middle East and emerging and developing markets in Europe.
The IMF warned that a much more subdued pace of global activity could well materialise given uncertainty about the prospects for several of those countries coupled with a projected slowdown in China and the U.S.
It, however, urged policymakers to take steps to defuse trade tensions and avoid mistakes to prevent the outcome.
“With a synchronised slowdown and uncertain recovery, the global outlook remains precarious.
“At three per cent growth, there is no room for policy mistakes and an urgent need for policymakers to cooperatively de-escalate trade and geopolitical tensions,“ Gopinath said.
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