The World Bank has slashed its growth forecasts for this year and is warning a new global recession could be imminent.
In its latest Global Economic Prospects report the bank says that an escalation in the eurozone debt crisis, a new oil shock, or a "hard landing" in one of the larger developing economies could trigger a global economic downturn.
The bank's manager of global macroeconomics, Andrew Burns, says 2012 is shaping up to be a lot worse than first anticipated.
Mr Burns told CNN that a meltdown in financial markets triggered by the sovereign debt crisis in Europe poses the greatest immediate risk, while slower growth in emerging economies is also causing concern.
"What we've seen in the second half of last year is many of the major locomotives of growth (over) the last few years - India, China - have had slower growth, and that's contributing to this overall slowdown that we're observing."
The bank's report says the slower growth is already visible in global trade and commodity prices, the BBC reports.
It is predicting growth of 5.4% for developing countries in 2012 and 1.4% for high income countries, down from its forecasts of 6.2% and 2.7% made in June.
The organisation is now predicting a 0.3% contraction for the eurozone next year.