The risk of the global economy falling into a recession is rising as fundamentals remain poor, analysts at Citigroup said in a note Wednesday.
"We are currently in a highly precarious environment for global growth and asset markets after two to three years of relative calm," Citigroup said, noting that global growth was "unusually weak" in the fourth quarter at around 2.0 percent on-year.
"The most recent deterioration in the global outlook is due to a moderate worsening in the prospects for the advanced economies, a large increase in the uncertainty about the advanced economies' outlook (notably for the U.S.) and a tightening in financial conditions everywhere," the bank said.
At the same time, fundamentals remain poor, including concerns about a structural and cyclical slowdown in China and its "unsustainable" currency regime, excessive leverage and rising regional risks, such as the risk the U.K. may exit the European Union, it said.
To be sure, Citigroup is defining a global recession as growth below 2 percent, differing significantly from the usual requirement of gross domestic product (GDP) falling for two consecutive quarters.
The bank also doesn't expect a global recession by any definition as its base case, forecasting global growth at 2.5 percent this year, based on official statistics, and around 2.2 percent, if adjusting for the possibility of Chinese data not being measured accurately.