Major Gulf oil exporters, including Saudi Arabia, have posted budget deficits since the crash of the global oil market in 2014.
"After two years of solid expansion, the world economy is growing more slowly than expected, and risks are rising", said IMF Managing Director Christine Lagarde as she presented the forecasts at the World Economic Forum in Davos, Switzerland.
Central Banks are generally reining in loose credit environment meant to stimulate the world's economies after the 2008 global economic crisis, but the combative tone of trade negotiations is now beginning to take a toll on growth the International Monetary Fund warns. Of the nations in the G7, only the United States and Canada are expected to outpace... 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.
The World Bank and the Organization for Economic Cooperation and Development have also downgraded their world growth forecasts.
The Australian dollar fell slightly to 71.58 USA cents, 55.5 British pence and 62.94 Euro cents at 7:20am (AEDT).
"The answer is 'no", but the risk of a sharper decline in global growth has certainly increased. The pound was up 0.6 percent at $1.2967.
With growth already weakened by the tariffs imposed on hundreds of billions of dollars in annual trade, mostly between the U.S. and China, the global economy is more susceptible to additional risks.
Oil prices decline as global glut concerns linger
He pointed out that the USA sanctions already led to a strong fall in Iranian oil production and exports in 2018. March Brent was recently trading at US$62.58.
On another note, she also said that creation of activity and economic value that leads to employment generation is critical for the country to grow. "Uncertainty would continue during the extended negotiations and there is no guarantee that it would last for only a short period of time".
Among the key concerns is the Chinese economy.
So far, China´s fiscal stimulus has cushioned the impact of the trade disputes.
U.S. President Donald Trump said on Saturday there has been progress toward a trade deal with China, but denied that he was considering lifting tariffs.
The IMF has said that India's growth rate in 2018 was 7.3 per cent.
The euro was steady near a three-week low as morale among German investors improved slightly in January, but their assessment of the economy's current condition deteriorated to a four-year low, a survey showed on Tuesday, sending mixed signals for the growth outlook of Europe's largest economy. "On the trade side it's important to come together, to have a cooperative solution that's permanent and that would be good not just for the United States and China, but for the global economy".
While it cut forecasts for a number of national economies, it forecast 1.5 per cent 2019 growth for Britain, the same as in October.