Fitch ratings agency on Monday revised down its growth forecasts for all major advanced economies, and said it expected growth in emerging economies to slow as well due to financial market volatility which has dented confidence and caused a drop in private consumption and business investment.
"Fitch does not project a 'double-dip' in its baseline global economic projections. However, the likelihood of a recession has increased, as intensified financial market volatility could further amplify risk aversion behavior and lead to tighter credit conditions," Maria Malas-Mroueh, director of Fitch's Sovereign team said in a note.
"In the euro area, forecasts now incorporate near-zero quarterly growth until Q112 (the first quarter of 2012), partially reflecting the impact of the ongoing sovereign debt crisis as sentiment across Europe has weakened and uncertainty has increased markedly since June," added Malas-Mroueh.
Fitch revised down world growth based on market exchange rates to 2.6 percent in 2011 compared with 3.1 percent previously.
It forecasts 2.7 percent in 2012 compared with 3.4 percent previously, and 3.1 percent in 2013 from 3.4 percent previously.
Global financial markets have seen violent swings in recent weeks as investors grew increasingly worried that policy makers will not be able to find a lasting solution to the euro zone debt crisis.