Investing.com - The International Monetary Fund has warned that the world economy, which is growing at a rate of 3.1 percent, compared to 3.4 percent last year, could crash if central banks do not continue to keep interest rates low.
The IMF said uncertainty and financial market volatility have increased and medium-term growth prospects have weakened.
IMF managing director Christine Lagarde warned that when the U.S. and U.K. central banks increase interest rates, the effect on volatile financial markets will pose a challenge to stabilizing global economies.
Lagarde also urged Japan and the euro zone to maintain their quantitative easing programs to stimulate their economies.
After the IMF's warning, the G30 group of experts, which includes former central bank governors, said in a report that keeping interest rates low for a long period would lead to a financial crisis. They added it would also lead to rising debt, and encourage excessive risk-taking.