The warning from the International Monetary Fund came at its annual meeting with the World Bank in Bali, after it cut its outlook for global GDP growth this week by 0.2 percentage points to 3.7 percent for 2018 and 2019.
And the Fund further cautioned that "everyone is going to suffer" from a trade-and-currency clash between the United States and China, the world's two biggest economies.
"Risks are increasingly skewed to the downside amid heightened trade tensions and ongoing geopolitical concerns, with tighter financial conditions particularly affecting many emerging market and developing countries," the IMF said in a communique.
It added that historically high public debt was also among the red flags that "could further undermine confidence and growth prospects".
"With the window of opportunity narrowing, we will act promptly to advance policies and reforms to protect the expansion, mitigate risks, rebuild policy space, enhance resilience, and raise medium-term growth prospects for the benefit of all," the statement said.
US Treasury Secretary Steven Mnuchin this week said he had told the head of China's central bank about his concerns over the weakness of its currency.
However, he declined to comment on whether Washington would declare Beijing a "currency manipulator" in a Treasury report due out next week.
That designation would be a first for China and would trigger a process that could lead to punitive steps after a series of talks.
The IMF appeared to take aim at the two powerhouse economies which are also locked in an increasingly bitter tit-for-tat tariff battle.
"We will refrain from competitive devaluations and will not target our exchange rates for competitive purposes," the communique said.
"We acknowledge that free, fair, and mutually beneficial goods and services trade and investment are key engines for growth and job creation."
Tensions have soared in recent months with US President Donald Trump's administration rolling out billions of dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington views as unacceptable trade practices by the Asian giant.
Meanwhile, markets have been roiled by a plunge in some emerging market currencies -- including in Turkey and Argentina -- as domestic financial crises and higher US interest rates lured return-hungry investors to the dollar.
The IMF statement also said it would push to improve the World Trade Organization and boost confidence in the global trading system.
It added that it would continue to help countries deal with the social and economic costs of "pandemics, cyber risks, climate change and natural disasters, energy scarcity, conflicts, migration, and refugee and other humanitarian crises".
Published : October 13, 2018
By : Agence France-Presse Nusa Dua, Indonesia