The global growth projections in 2020 and 2021 have been further lowered, as a sharp slowdown in India is creating a drag worldwide, although the U.S. –China trade one deal has just eased some of the uncertainty facing the world, the International Monetary Fund (IMF) said Monday.

The IMF projects global growth to increase from 2.9 percent in 2019 to 3.3 percent in 2020, and 3.4 percent in 2021, cutting down 0.1 percent and 0.2 percent from the previous report released in October 2019.

China's growth revised up but uncertainty remains

The IMF revised China's growth upward by 0.2 percent to 6 percent for 2020, over the easing trade tension between China and the U.S.

The U.S.–China phase one deal, if durable, is expected to reduce the cumulative negative impact of trade tensions on global GDP by the end of 2020 — from 0.8 percent to 0.5 percent, according to the IMF report.

However, while the risks to the global economy have lessened, the Washington-based global lending institution cautioned that outcomes "depend to an important extent on avoiding further escalation" between Washington and Beijing. 

The relationship between China and the United States, the world's dominant economic powers, is still troubled by "unresolved disputes," which continue to be a factor. 

"Policy missteps at this stage would further enfeeble an already weak global economy." 

The U.S. and China signed the phase one U.S.-China trade deal last week that ends the escalation for now, but leaves in place tariffs on two thirds of the goods imported from the Asian economic power. 

A contributor to the world economy 

Geng Shuang, a spokesperson for China's Ministry of Foreign Affairs, said on Tuesday that the country has taken note of the latest IMF report.

However, China's economy is still featured by generally smooth and steady growth momentum. Official data shows the world's second largest economy's GDP went up by 6.1 percent year-on-year in 2019, racking up one of the fastest rates of economic growth among major economies, with per capita GDP exceeding the 10,000 U.S. dollars mark, Geng pointed out. 

He said the IMF's upward revision of China's economic projections reveals the international community's faith in its economic performance and prospect. 

China's GDP is projected to account for over 16 percent of the world's total, while its contribution to world economic growth will settle at 30 percent.  

Despite mounting risks and challenges at home and abroad, the fundamentals of China's long-term sound development do not and will not change, and the economy still boasts endogenous impetus, great resilience, as well as potential and room for further growth, expounded Geng. 

"China will in the New Year press ahead with the main task of supply-side structural reforms and put into practice all sorts of policies and measures to ensure its economy maintain medium-to-high growth momentum to move towards a medium- to high-end level."

"As a global powerhouse fueling economic development, China will not only take care of its own affairs, but also continue to make a positive contribution to sustain world economic growth," noted the spokesperson.  

(With input from AFP)