Prime Minister Scott Morrison declared his budget surplus plan will not be "spooked" by international events, as the International Monetary Fund slashed Australia's economic growth forecast to just 1.7 per cent and advised world governments to unleash a spending stimulus.

The IMF's World Economic Outlook warned of a synchronised global slowdown to the weakest pace since the 2008-09 global financial crisis, as the world economy is pummelled by the US-China trade war that is inflicting a "sharp deterioration" in global manufacturing and trade.