The rating agency Moody's said on Thursday that the downside risks to the global economy increased as the slowdown in the Chinese economy, lower commodity prices and tighter financing conditions in some countries weigh on the global economy. The G20 economies are expected to expand 2.6% in 2016 and 2.9% in 2017.

The Chinese economy is expected to grow 6.3% in 2016 and 6.1% in 2017. "China's slowdown will be concentrated in heavy industry sectors that are significant importers," Marie Diron, a Moody's Senior Vice President, said.

The U.S. GDP growth is expected to be 2.3% in 2016 and 2.5% in 2017. Moody's noted that the Fed will continue to raise its interest rate gradually, with the Fed's interest rate at around 1.75% by the end of 2017.

Japan's economy is expected to expand below 1% in 2016 and 2017. The agency noted that the Bank of Japan's (BoJ) 2% inflation target will remain elusive.