The risk of the global economy falling into a recession is rising as fundamentals remain poor, analysts at Citigroup said in a note Wednesday.
"We are currently in a highly precarious environment for global growth and asset markets after two to three years of relative calm," Citigroup said.
Fundamentals remain poor, including concerns about a structural and cyclical slowdown in China and its "unsustainable" currency regime, excessive leverage and rising regional risks, such as the risk the U.K. may exit the European Union, it said.
To be sure, Citigroup is defining a global recession as growth below 2 percent, differing significantly from the usual requirement of gross domestic product (GDP) falling for two consecutive quarters.
Citigroup is particularly concerned about U.S. economic growth. "Should the U.S. economy falter, it would be difficult to identify any major economy that could be the growth engine for the world in the near-term," it said, noting that China's growth is slowing.
U.S. growth doesn't need to slow much for the global economic outlook to darken, Citigroup said.
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