Mubasher: The International Monetary Fund (IMF) on Monday lowered its world economic growth projections for this year and next, due to weakness in Europe and some emerging markets.

In its second downgrade in three months, the IMF also cited a slowdown in China’s economy and the possibility of a no-deal Brexit as downside risks to its outlook.

The lender projected the global economy to grow at 3.5% this year and 3.6% next year, down 0.2 and 0.1 percentage point respectively from last October’s forecasts.

“An escalation of trade tensions beyond those already incorporated in the forecast remains a key source of risk to the outlook,” the IMF said in an update to its World Economic Outlook report.

“Higher trade policy uncertainty and concerns over escalation and retaliation would lower business investment, disrupt supply chains and slow productivity growth,” the lender said, noting that “the resulting depressed outlook for corporate profitability could dent financial market sentiment and further dampen growth.”

Growth in the Eurozone is set to ease from 1.8% last year to 1.6% this year, 0.3 percentage point lower than expected three months ago, the IMF said.

“Emerging market and developing economies have been tested by difficult external conditions over the past few months amid trade tensions, rising US interest rates, dollar appreciation, capital outflows, and volatile oil prices,” the IMF added.