The International Monetary Fund (IMF) has said the global economy has weakened further and warned it was “highly vulnerable to adverse shocks”.
It said the weakening had come “amid increasing financial turbulence and falling asset prices”.
The IMF’s report comes before the meeting of G20 finance ministers and central bank governors in Shanghai later this week.
It said China’s slowdown was adding to global economic growth concerns.
China’s economy, the second-biggest in the world, is growing at the slowest rate in 25 years.
“Growth in advanced economies is modest already under the baseline, as low demand in some countries and a broad-based weakening of potential growth continue to hold back the recovery,” the Washington-based IMF said.
“Adding to these headwinds are concerns about the global impact of China’s transition to more balanced growth, along with signs of distress in other large emerging markets, including from falling commodity prices.”
The IMF also noted any future prospects for global growth “could be derailed by market turbulence, the oil price crash and geopolitical conflicts”.
The agency has called on the G20 group to plan new mechanisms to protect the most vulnerable countries.
Earlier this year, the IMF downgraded its forecast for global economic growth. It now expects economic activity to increase 3.4% this year followed by 3.6% in 2017.