The longer the trade dispute between the US and China continues, the more likely it is that it will turn into a structural problem for the world economy, according to the head of the Central Bank of Russia Elvira Nabiullina.

Speaking to CNBC at the IMF’s annual meeting in Washington, Nabiullina said that if the trade war can be resolved “constructively and quickly,” markets may view the slowdown as cyclical, but any escalation poses a greater long-term risk to the global economy.

“In this case, monetary policy may do little to address structural weaknesses in the global economy,” she told CNBC’s Jeff Cutmore, adding that aggressive monetary policy could also ” exacerbate issues of financial risk stability, especially in emerging markets.”

The world Bank on Wednesday lowered Russia’s economic growth forecast for 2019 from 1.2% to 1%, the fourth downward revision of the country’s economic forecasts for this year.

Russia’s Central Bank cut its GDP (gross domestic product) growth forecast last month to 0.8-1.3%, and Nabiullina said that while the Russian economy is under pressure from global factors, the domestic picture is starting to look more positive.

“The growth of our main trading partners, China and the EU, is slowing, so Russian exports have also slowed, and this is one of the main external factors that caused the Russian economy to slow down in the first half of this year,” she said.

The latest round of trade talks between the US and China ended last week with a promise to begin the” first phase ” of a partial trade deal. However, Chinese Commerce Ministry spokesman Gao Feng said on Thursday that the US should lift tariffs on Chinese goods if a final agreement is reached.

He did not confirm when the first phase agreement would be signed or whether trade officials planned to meet again, although U.S. Treasury Secretary Steven Mnuchin expressed willingness to travel to Beijing for further talks.

The Russian government raised the country’s overall VAT rate from 18% to 20% at the beginning of the year in an attempt to create fiscal room to Fund national projects, but Nabiullina said unexpected delays in public spending projects were holding back fiscal policy plans that were accompanied by tightening monetary policy.

“We have tightened our monetary policy in response to Pro-inflationary factors, such as higher VAT, to avoid secondary consequences in a situation where inflation expectations are not fixed,” Nabiullina said.

The Central Bank in September cut its key interest rate by 25 basis points to 7% per annum, however, indicated that it may cut further at its next policy meeting on October 25. According to Nabiullina, government spending is “more and more in order.”

“We believe that fiscal policy will have a more stimulating position and the normalization of our monetary policy will have an additional positive impact on growth,” she said, adding that Russia’s GDP growth should return to 1.5-2% in 2020.

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