Australia's economic growth prospects have been downgraded by the International Monetary Fund (IMF) due to the nation's vulnerability to slower Chinese demand for commodity exports.

The IMF has also cut its world growth forecasts and warned any failure by the United States to raise its debt ceiling could "seriously damage" the global economy.

In its World Economic Outlook released on Tuesday, the IMF forecast Australian growth of 2.5 per cent in calendar 2013, down from the three per cent prediction made in April.

The outlook was slightly better than the Reserve Bank of Australia's latest forecast of 2.25 per cent growth in 2013, but worse than trend growth of 3.25 per cent.

For 2014, the IMF sees Australian growth at 2.8 per cent, rather than 3.3 per cent.

The IMF also cuts to its China growth expectations, citing rising convictions that Australia's number one trading partner will grow more slowly over the medium term than in recent years.

China is forecast to grow by 7.6 per cent this year and 7.3 per cent next year, having averaged 10 per cent over the past decade.

"Policymakers have refrained from further stimulating growth, which is consistent with the objectives of safeguarding financial stability and moving the economy to a more balanced and sustainable growth path," the IMF said.

"In the short term, as demand shifts away from materials-intensive growth, some commodity exporters could be vulnerable."

More broadly, the IMF says global growth is in "low gear" and risks persist.

IMF economic counsellor Olivier Blanchard says, while advanced economies are gradually strengthening, emerging economies have slowed.

US growth had also been hobbled by excessive fiscal consolidation despite still strong US private demand.

"Politics is creating uncertainty ... and conflicts around increasing the debt ceiling could lead to another bout of destabilising uncertainty and lower growth," Mr Blanchard said in the report.

The damage to the US economy from a short shutdown of the US government would be limited, but a longer one could be quite harmful.

"Even more importantly, a failure to promptly raise the debt ceiling, leading to a US selective default, could seriously damage the global economy," it says.

Elsewhere, the IMF said Japan was enjoying a vigorous rebound and, while the euro area was "crawling" out of recession, activity was likely to remain tepid.