The International Monetary Fund (IMF) has expressed concerns about the global economy, slashing its outlook by 0.1 percent for the year.

The IMF said it expects the world economy to grow by 3.1 percent in the current year. The report painted an especially grim picture of developed economies. It also asked China to draw appropriate policies for the impending slowdown.

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The IMF lowered its outlook for the next year as well. Its forecast for the next year stands at a growth rate of 3.4 percentage. The report cited Britain's exit from the European Union as one of the reasons for the cutting of the forecast. It also flagged the lower than expected growth rate in the United States.

According to the IMF, these developments have put additional pressure on the interest rates as monetary policy is now expected to stay flexible for a longer period.

The fund expects China's economy to grow by 6.6 percent in 2016. The country;s economy is projected to grow by 6.2 percent in the coming year. The report recognized the country's shift from an investment model to consumption-based growth. It also sounded a note of caution as it suggested that China's economy is highly leveraged.

The IMF warned that China's debt to GDP ratio is "increasing at a dangerous pace." China's debt to GDP ratio stands at 270 percent, up from 150 percent in 2008. The report stressed that the country should accept that the change in its policies may lead to an economic slowdown and prepare accordingly.

The report predicted that emerging markets would grow by 4.2 percent this year, while the growth rate for advanced economies has been pegged at 1.6 percent, down from 2.1 percent last year.

TagsIMF, Britain, EU