Tensions mar growth prospects.

Byline: Khaleeq Kiani

The synchronised slowdown in the global economy remained the key phrase of the World Bank-International Monetary Fund (IMF) Annual Meetings 2019 in Washington DC. The newly appointed managing director kicked off the week-long consultations of the global financial and economic czars with a gloomy picture. The buzzword reverberated all along.

Managing Director Kristalina Georgieva, who has only recently moved to the IMF's top position from the World Bank, said the Fund was now forecasting slower global growth this year and next - 3.0 per cent in 2019 and 3.4pc in 2020. In both cases, this is a downgrade from the projections in April this year.

'Measured by GDP, nearly 90pc of the world is experiencing slower growth,' she emphasised and attributed the US-China trade war, Brexit and geopolitical tensions as major factors causing hazards on shared roadways and forcing the slowdown.

The IMF presented five priorities as the Global Policy Agenda to address challenges

World Bank chief David Lipton explained that a good portion of the increased growth in 2020 was based on the presumption that a number of very troubled economies that fell sharply this year, Iran, Venezuela, Argentina, Turkey, will not decline again. But it is unclear whether this presumption will really happen, making the forecast precarious.

The IMF chief said that her staff had calculated the impact of the already imposed or announced tariff measures by the US and China at 0.8pc by 2020. This is an equivalent of $700 billion shaved off the global economy. However, the positive sign was that the two big powers were talking to each other and in case of an agreement, the impact would start shrinking and reduce the loss by 0.2pc.

Mr Lipton argued that in a world where China is such a large player in the global economy, it is important that their reforms continue as the country will benefit a lot from them. And the US and China have a big role to play in leading the global economy at a time where everyone has much to gain from the strengthening of trade relations that could make international trade once again an engine of growth for the global economy.

Ms Georgieva said the Fund has also examined the Brexit impact on Europe. 'Exiting without a deal could cost the United Kingdom economy up to 5pc loss in GDP, and it would cost the European Union up to half a percentage point loss of GDP'. An exit with a deal still could result in a 2pc loss for the UK economy but...