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Growth is slowing in a number of the world's big economies, and the International Monetary Fund is warning that investor sentiment could make a "sudden reversal" for the worse.
"Although still supportive of growth, global financial conditions have started to tighten," the fund said in its latest Regional Economic Outlook report for Middle East and Central Asia, released Tuesday.
The report is published annually and gives a broad overview of recent economic developments and of prospects and policy issues for the medium term.
"Global conditions are changing in terms of the risk metrics," Jihad Azour, director of the Middle East and Central Asia at the IMF, told CNBC's "Capital Connection."
"Although we're still enjoying a high level of growth, that growth is plateauing," he added.
The IMF said higher U.S. interest rates, a stronger U.S. dollar, and financial market volatility could bring pressure in some emerging-market and developing economies.
"A worsening of these developments, or faster-than-anticipated monetary policy tightening in advanced economies, increases the risk of a sudden reversal in global risk appetite," the report said.
The IMF forecasts global growth for 2018-2019 to remain steady at its 2017 level of 3.7 percent, but the growth outlook for a number of major economies has been marked down.
In the United States, while the real GDP growth outlook for 2018 is unchanged at 2.9 percent, the forecast for 2019 has been revised down to 2.5 percent due to the recently announced trade measures.
The United States has entered a serious tariff dispute with China, and it remains unclear how long that conflict will last.
The outlook for emerging and developing economies is also weaker, reflecting downward revisions for some large emerging market economies due to country-specific factors, tighter financial conditions, geopolitical tensions and higher oil prices, according to the report.
"Real GDP in the Euro area will slow to 1.9 percent in 2019, compared to 2.9 percent in 2018. Growth will also moderate in the United Kingdom, following surprises that suppressed activity in early 2018, " it said.
The IMF blamed the recent trade measures between the United States and China for projected declining growth in China, which it now sees at 6.2 percent in 2019, 6.6 percent in 2018 and 6.9 percent in 2017.
Despite a recent slide in oil prices, the IMF is more optimistic about the Middle East, but warned of numerous uncertainties in the region.
"The oil price has gone up by more than 60 percent in two years, and the levels that we're seeing today are equivalent to those of 2015," Azour said.
The IMF forecast that oil exporters in the Middle East, North Africa, Afghanistan and Pakistan — which it refers to as MENAP — will experience visible improvements in external and fiscal balances in 2018–19.
"Economic activity in MENAP oil-exporting countries is expected to strengthen this year and next. Real GDP growth is projected at 1.4 percent in 2018 and 2 percent in 2019, up from 1.2 percent in 2017," the report said.
"Growth among MENAP oil-importing countries is expected to continue at a modest pace in 2018 and to strengthen slightly over the medium term. Growth in the region is projected to reach 4.5 percent in 2018, up from 4.1 percent in 2017, before moderating to 4 percent in 2019," in added.