The global economy risks protracted "sub-par growth," the International Monetary Fund (IMF) warned on Thursday, as economists continue slicing their forecasts.
"With global economic prospects repeatedly marked down over the last five years, there is a concrete risk of a world economy persistently mired in sub-par growth, with unacceptably high levels of poverty and unemployment," the IMF said in a report out ahead of the G-20 leaders' summit in Turkey on Sunday.
Real gross domestic product (GDP) growth is seen averaging 3.1 percent year-on-year across the globe in 2015 and 3.6 percent next year by the IMF. This is down from the international body's July forecasts, which suggested economic expansion of 3.3 percent in 2015 and 3.8 percent in 2016. It is also marginally slower than the growth rates of 3.3 percent and 3.4 percent seen in 2013 and 2014, respectively.
"Growth remains fragile and could be derailed if transitions are not successfully navigated. In an environment of declining commodity prices, reduced capital flows to emerging markets, and higher financial market volatility, downside risks to the outlook remain elevated, particularly for emerging economies," the IMF said.
The three biggest risks to the global economy were seen as the upcoming normalization of monetary policy by the U.S. Federal Reserve, the slump in commodity prices and the slowdown in China. China's economy has steadily slowed since 2010 and is seen continuing to do so, with economic growth forecast at 6.8 percent in 2015 and 6.3 percent in 2016.
"China's rebalancing is generating large spillovers, and notwithstanding the Chinese economy's sizable buffers, could be disruptive abroad. Either a moderate slowdown or a harder landing over the medium term could produce sizable spillovers via slower global trade, a further weakening of commodity prices, and confidence effects," the IMF said.
Overall, growth is seen declining in emerging economies for a fifth year in a row in 2015, before strengthening next year. Notably, Russia's economy is seen shrinking 3.8 percent this year and 0.6 percent next, while Brazil's economy is declining by 3.0 percent this year and 1.0 percent in 2016.
Several international bodies and banks have issued anemic outlooks for global growth in recent weeks.
On Thursday, UBS forecast that Latin American economies would shrink by an average of 0.8 percent in 2015, marking the worst recession since the 2008 financial crisis and the greatest underperformance relative to the rest of the world in almost 30 years. It predicted the region's economy would continue shrinking in 2016, forecasting a contraction of 0.2 percent.
"We perceive the risks to the region to be skewed almost exclusively to the downside. We would highlight two: one, the risk that China slows more than expected, putting further downward pressure on trade with the Asian giant and on commodity prices, and potentially reducing Chinese external financing to the region; and two, the risk that Latin America faces a corporate credit event, particularly in Brazil," UBS economists led by Rafael de la Fuente said in a report.
On Monday, the Organisation for Economic Co-Operation (OECD) cut it global growth estimate to 2.9 percent this year, down from a forecast of 3.0 percent made in September and 3.1 percent made in June.
Plus, Moody's Investors Service warned this month that downside risks to the world economy had grown and that the proportion of countries awarded a "stable" credit outlook had fallen slightly from a year ago, while the share of "negative" outlooks had risen.
On Thursday, Germany's Ifo Institute said its index tracking the world economy had "clouded over," reading 89.6 points for the fourth quarter – down from 95.9 in the third quarter and below the long-term average of 96.1.
— By CNBC's Katy Barnato. Follow her on Twitter @KatyBarnato.