Citing reasons of China’s slowdown, persistently low oil prices and chronic weakness in advanced economies, the International Monetary Fund cut its global growth forecast for the fourth time in the past year on Tuesday.

The global economy would grow at 3.2 percent in 2016 compared to its previous forecast of 3.4 percent in January forecast the IMF. Along with the World Bank, the spring meetings of the Fund will be held in Washington this week.

In its latest World Economic Outlook, the Fund said that weaker growth could leave the global economy more vulnerable to shocks such as currency depreciations or worsening geopolitical conflicts and warned of widespread stagnation risk.

Coordinated actions to boost demand with structural economic reforms, fiscal stimulus where possible and accommodative monetary policy was necessary according to the Fund which also called on global policymakers attending the IMF and World Bank meetings to take such measures for the global economy.

“Lower growth means less room for error. Persistent slow growth has scarring effects that…reduce potential output and with it, demand and investment,” IMF chief economist Maurice Obstfeld said in a statement.

Brazil’s economy would now shrink by 3.8 percent this year versus the previous forecast of a 3.5 percent contraction as it struggles through its deepest recession in decades, said the IMF which earlier cut the growth rate of Japan by half and predicted a growth of 0.5 percent in 2016 for the country.

The Fund also cut its growth rate prediction for the US for 2016 to 2.4 percent from 2.6 percent. The United States is believed to be one of the relative bright spots in the global economy. While low oil prices would keep energy investment weak, the IMF said that it anticipated an increased drag on U.S. exports from a stronger dollar.

Drawing confidence in part from the previously announced policy stimulus the Fund raised China’s growth forecast slightly to 6.5 percent this year, and 6.2 percent in 2017. However the IMF was still of the opinion that as China transitions from a manufacturing economy to a consumer-driven economy, its growth rate would continue to weaken.

“A sharper slowdown in China than currently projected could have strong international spillovers through trade, commodity prices, and confidence, and lead to a more generalized slowdown in the global economy, especially if it further curtailed expectations of future income,” the IMF said in the World Economic Outlook.

The new forecasts follow previous growth markdowns in July, October and January.

Obstfeld said that future output potential could be eroded due to a weakening of the global growth form what the Fund predicts quite easily and which could reinforce a deflationary spiral of weak growth. He said this phenomenon is known in some economic circles as “secular stagnation.”

A nationalistic, protectionist policies, particularly in the euro area could be encouraged by the reinforcement of a sense of economic inequality by a persistently lower growth rate which could also reduce potential, he also noted.

(Adapted from reuters.com)

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