Problems over the course of the last three months have caused the global financial outlook to deteriorate.
That is according to the International Monetary Fund (IMF), which released its latest World Economic Outlook yesterday (16 July) and indicated there were numerous signs in the second quarter that the financial recovery is experiencing "further weakness".
"Financial market and sovereign stress in the euro area periphery have ratcheted up, close to end-2011 levels," the body added.
With this in mind, the IMF predicted that the global economy will see growth of 3.5 per cent this year followed by expansion of 3.9 per cent in 2013, as long as officials take sufficient measures to support struggling states.
"Clearly, downside risks continue to loom large, importantly reflecting risks of delayed or insufficient policy action," it added.
The IMF went on to call on US policymakers to raise the debt ceiling and develop a strong medium-term plan sooner rather than later.
By Gary Cooper