The International Monetary Fund(IMF) has downgraded its growth forecasts for Europe and Japan for this year and warned that the possible escalation of current trade tensions is the greatest risk to the global economy. 

In its World Economic Outlook report released on Monday, the IMF kept its forecasts for global economic growth unchanged at three-point-nine percent for both this year and 2019.

However, the IMF cut its growth forecasts for Europe and Japan. It predicted the economy of the 19-country eurozone will grow two-point-two percent this year, down from the two-point-four percent it forecast in April. 

The lending agency expects the Japanese economy to expand one percent this year, downgrading its one-point-two percent April projection.

IMF Chief Economist Maury Obstfeld told a news conference on Monday that the possible escalation of trade tensions is the greatest near-term risk to global growth, with the dispute likely to have adverse effects on confidence, asset prices and investment.

Despite the concerns about trade, forecasts for the U.S. and China, which are in the midst of a trade dispute, were both unchanged.

The U.S.' growth was projected at two-point-nine percent in 2018 and two-point-seven percent in 2019. China's growth was forecast at six-point-six percent this year and six-point-four percent in 2019.

South Korea was not included in the latest report. In April, the IMF projected three percent growth for South Korea for this year and two-point-nine percent for next year.