Christine Lagarde, managing director of the International Monetary Fund (IMF), leaves the media center after attending a news conference ahead of the World Economic Forum (WEF) in Davos, Switzerland, on Monday, Jan. 21, 2119.
Major Gulf oil exporters, including Saudi Arabia, have posted budget deficits since the crash of the global oil market in 2014.
The International Monetary Fund has cut its forecast for world economic growth this year, citing heightened trade tensions and rising US interest rates. "Price forecasts for most major agricultural commodities have been revised modestly downwards", the International Monetary Fund said.
The slowing growth in China, and across the world, was partly due to the US-China trade war and the billions of dollars in tariffs they have imposed on each other. The Sarb growth forecast for this year is 1.7 percent, down from 1.9 percent; it is unchanged at 2 percent for 2020 and increases to 2.2 percent in 2021. Global growth for 2018 is estimated at 3.7 percent, as in the October 2018 World Economic Outlook (WEO) forecast, despite weaker performance in some economies, notably Europe and Asia.
The Australian dollar fell slightly to 71.58 USA cents, 55.5 British pence and 62.94 Euro cents at 7:20am (AEDT). China GDP is forecast to expand 6.2 percent in both years.
Bulltick Capital Markets' Kathryn Rooney Vera on China's economic slowdown, US trade talks with China and the outlook for the global markets.
A gauge of world stock markets fell on Tuesday as concerns over global growth and trade gave investors incentive to look toward safe-haven assets such as the Japanese yen and government bonds.More news: Liz Cheney Slams Trump Admin. Proposal to Lift Certain Russian Sanctions
Gopinath said we are not necessarily "staring at an imminent global downturn", but pointed to "two key sources of risk" in the future: An escalation in trade tensions, and a possible worsening of financial conditions.
"Efforts by policymakers to stimulate economic activity, such as cutting the required reserve ratio in the banking sector and broad tax cuts, have likely acted to prevent a more dramatic decline", he said in a note to clients.
Washington and Beijing declared a 90-day truce on December 1, but the risk remains that tensions will flare up again in the Spring and "casts a shadow over global economic prospects".
"All of this economic and trade policy complements the very important relationship we share, because we all know that Australians don't just visit the United Kingdom - they study, work and build lives here, just as the same applies in reverse", he said.
As in October, the fund urged countries to negotiate a solution that will not inflict economic damage.
The IMF trimmed the outlook for the 19 countries that use the euro as their currency to 1.6 per cent from 1.8 per cent. Germany got a big downgrade from the IMF, the result of weaker demand for German exports and problems in the country's auto industry.
Emerging-market countries are forecast to slow to 4.5 per cent from 4.6 per cent in 2018.