China yesterday reported that 2018 had seen its slowest economic growth in almost three decades, and in a sign of the struggle Beijing faces, growth in the last three months of the year clocked in at 6.4 per cent, matching a low seen during the global financial crisis 10 years ago.
The IMF said the forecasts for both this year and next were previously pared partly due to the negative impacts of the US-China trade war.
Escalating the trade war is on hold for now after Chinese President Xi Jinping and US President Donald Trump agreed to a three-month ceasefire, with top negotiators set to meet in Washington at the end of this month as a March deadline for a deal looms large.
Other key contributors to the downturn include the introduction of a new fuel emissions standard in Germany, a deeper-than-expected economic contraction in Turkey and concerns over a growing sovereign debt crisis in Italy.
Gita Gopinath, the new IMF chief economist, said that "the global expansion is weakening and at a rate that is somewhat faster than expected".
"The downward revisions are modest, however we believe the risks to more significant downward corrections are rising," Prof Gopinath said.
Treasurer Josh Frydenberg will today give a speech at the Sydney Institute declaring that the Australian economy remains strong and has "the flexibility and resilience to respond to challenges" from the slowing global economy.
"As the Prime Minister has warned, there are storm clouds hanging over the global economy. Persistent trade tensions, high global debt levels and a contraction in growth in several key economies has changed the global outlook," he will say.
"The strength of Australia's economy provides the resilience and flexibility to respond to challenges as they arise."
Yesterday Trade Minister Simon Birmingham told British businesspeople in London he wants the new arrangements in place as soon as possible after Brexit.
"Our message remains the same as since the referendum result was announced — the second Britain is ready, Australia stands ready to launch formal negotiations for an Australia-UK free trade agreement," he told the Australia-UK Chamber of Commerce breakfast in London.
"We should show the world how quickly yet effectively it can be negotiated, seeking to conclude and sign as rapidly as we can after March 29, and entry into force occurring as soon as possible thereafter."
Birmingham sees Brexit as an opportunity for the two nations to reinvigorate their relationship.
The new trade deal should be ambitious, comprehensive, modern and an example of open, liberalised markets, he told the business group.
"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 UK — they study, work and build lives here, just as the same applies in reverse," he said.
