Washington - The International Monetary Fund (IMF) cut its forecast Tuesday for 2015 global economic growth, as the slowing economies in China and other emerging markets are felt worldwide.
The IMF predicted 2015 world growth of 3.1%, down 0.2 percentage points from the Washington-based crisis lender's July forecast.
For 2016, the IMF pared its forecast by 0.2 points to 3.6%.
Emerging market and developing economies had been the engine of global growth for years, as Europe and the United States lagged since the 2008 financial crisis.
Now, China's growth is slowing, many commodities exporters are reeling from the crashes in oil and metals prices, and investment flows into emerging and developing countries have slowed sharply.
An August correction in Chinese share prices sent global stock markets reeling.
"In an environment of declining commodity prices, reduced capital flows to emerging markets and pressure on their currencies, and increasing financial market volatility, downside risks to the outlook have risen, particularly for emerging market and developing economies," the IMF said in its World Economic Outlook.
The IMF predicts growth in advanced economies this year at 2% and 2.2% in 2016, up from 1.8% recorded last year and 1.1% in 2013.
For emerging markets and developing economies, the IMF forecasts 4% growth this year, down from 4.6% in 2014 and 5% in 2013.
"For emerging market and developing economies as a whole, our forecast is that 2015 will mark the fifth consecutive year of declining growth," IMF chief economist Maurice Obstfeld wrote in an article released with the report.
In Asia, China is forecast to grow this year by 6.8% and 6.3% in 2016, while India is pegged at 7.3% this year and 7.5% next year.
China's once-galloping growth has slowed as the government tries to implement a policy - long recommended by the IMF - of rebalancing the economy to increase domestic consumption and reduce dependence on exports.
The Chinese slowdown is "in line with forecasts," but the "cross-border repercussions" have exceeded expectations, the IMF said.
China's slower growth - which still easily tops all the major advanced economies - is a major factor in weaker commodity prices, as well as reduced exports into the world's most populous country from other economies in East Asia.
While growth in advanced economies is picking up, especially as the eurozone recovers from its long-running crisis, "deflationary pressures remain," said Obstfeld, a former economic adviser to US President Barack Obama.
Uncertainty has hampered investment in many economies, only worsening the outlook for growth into the medium-term, feeding what Obstfeld called a "vicious cycle". In some countries, political instability has deterred investment, he said.
Obstfeld, who took over the IMF's economic research last month, took note of the ongoing migration crisis in Europe, where refugees and others are streaming in from the Middle East and Africa.
"In its more extreme forms, political conflict has created a large global stock of displaced persons, both within and across borders," he wrote. "The economic and social costs are immense."
“In spite of falling commodity prices and downward growth projections -
Africa’s long-term growth remains unparalleled from a demographic,
mineral and labor standpoint," said Rohan Malik, EY’s global emerging
markets and deputy global government & public sector leader.
"Governments must continue investing in self-sustaining solutions like infrastructure, education and entrepreneurship to enable a system better able to withstand shocks. But without proper investment and management of natural resources, governments and industry risk disadvantaging future generations.”