July 23 (UPI) -- The International Monetary Fund said Tuesday the global economic growth forecast has become 'increasingly sluggish,' amid conflicts over trade and technology.
The IMF released the July update to the World Economic Outlook, forecasting global growth, trade and inflation for this year and next, from Santiago, Chile, Tuesday. The report comes after previous projections earlier this year of a downgraded economic outlook and slowing global economy for 2019.
In remarks before the report was unveiled, Gita Gopinath, the IMF's chief economist, said the IMF is urging countries to resolve trade and technology conflicts to boost "increasingly sluggish," growth.
The updated projection for growth this year is 3.2 percent, down from 3.3 percent growth in the April projection, and 3.5 percent forecast in January.
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For 2020, growth is expected to pick up to 3.5 percent, but that is still below an earlier projection of 3.6 percent.
"Global growth remains sluggish," Gopinath said. "Going forward there are significant risks to the outlook. Some of the main ones are an escalation in trade tensions or in technology tensions. A change in financial risk sentiment. It is therefore very important for countries to cooperatively work together to resolve their disagreements, especially on the trade and technology front. Because that would be important to support growth going forward."
International trade growth is at its lowest point since 2012, the report found. Though a rebound is forecast in 2020, it's unknown if current trade and technology conflicts will be resolved or escalated.
The United States agreed to halt around $350 billion in Chinese imports in exchange for China agreeing to increase its purchase of U.S. agricultural products after the G20 summit in Japan in June, but that hasn't impacted tariffs already imposed. The forecast reflects the May increase of U.S. tariffs on $200 billion of Chinese exports from 10 percent to 25 percent, and retaliation by China.
Still, market sentiment has been lifted by the prospect of the two sides continuing to make progress.
The IMF has also named a no-deal Brexit as a risk to global economic growth.
"The principal risk factor to the global economy is that adverse developments -- including further U.S.-China tariffs, U.S. auto tariffs, or a no-deal Brexit -- sap confidence, weaken investment, dislocate global supply chains, and severely slow global growth below the baseline," the IMF said.
