(CNN Business) The International Monetary Fund is warning that the world economy is slowing — and that it will get worse if countries keep squabbling over trade.

The agency's updated World Economic Outlook lowered estimates for growth in 2019 by 0.2 percentage points to 3.5%, its second downward revision, this time on account of weakness in Germany and Turkey.

But the new report, released as bankers and other global leaders gathered for an annual economic conference in Davos, Switzerland , made clear that the biggest known risks to growth are the unresolved trade war between the United States and China, and the possibility of Britain exiting the European Union without a deal.

"After two years of solid expansion, the world economy is growing more slowly than expected, and risks are rising," IMF Managing Director Christine Lagarde said at a press conference in Davos.

That does not mean a global recession is around the corner, Lagarde added. But the "risk of a sharper decline in global growth has certainly increased," she said.

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