The International Monetary Fund says the slowest pace of global growth since the crisis is partly due to trade standoffs, but warned that deeply rooted structural and geopolitical problems are also to blame.

The IMF’s projections for 2019 global GDP growth of 3% are a notch down from its most recent projection of 3.2% in July, and warned in its updated report that a continued tariff war between the U.S. and China would contract global growth by 0.8% through 2020.

The gloomy outlook comes as the U.S. and China work through a “phase one” trade deal that would delay U.S. tariff increases in exchange for a Chinese promise to increase agricultural purchases and abide by certain intellectual property-protection measures.

But IMF Managing Director Kristalina Georgieva says the phase one deal, as currently structured, would only restore about 0.2% of the currently-baked-in global GDP loss.

“That, of course, is good news but not good enough. What we need is to reach not just a truce but to have trade peace,” Georgieva told reporters at the IMF Annual Meeting Oct. 17. “We need to go back, no — we need to go forward, to a system that is enhanced and is enforced.”

The IMF also cautions that trade is only a short-term problem facing the global economy, noting that the entire world appears to be stuck in a “synchronized slowdown” owing itself to structural problems like low productivity and aging demographics — particularly in advanced economies.

Although the IMF projects global growth to rebound to 3.4% in 2020, the report notes that the improvement will likely be driven by emerging markets and not the major advanced economies. The IMF expects GDP growth to slow further in the U.S., China, and Japan in 2020.

Economists from the IMF are now urging countries to enact structural reform to fix these problems — before it’s too late.

Enacting fiscal policy

The IMF is urging governments to use fiscal policies to address specific problems in their economies. For example, the report encouraged Germany and the Netherlands to invest in social and infrastructure capital.

Gita Gopinath, the IMF’s chief economist, told Yahoo Finance that with central banks all over the world lowering borrowing rates, countries with budget surpluses should seize the opportunity to pass stimulative measures.

“For some countries that have the fiscal space, they need to undertake public investment spending and are able to borrow at negative rates, this seems like the perfect time to do it,” Gopinath said.

The IMF worries that monetary policy has its hands tied with rates so close to zero (and negative in Europe and Japan).