Europe and the United States could slip back into recession next year unless they quickly tackle economic problems that could infect the rest of the world, Bloomberg reported.

The International Monetary Fund (IMF) said today that financial volatility had increased dramatically as investors worried about an escalating debt crisis in the euro zone and a weakening U.S. recovery.

Those two regions present the biggest risks to the global economic outlook, the IMF said, warning that political gridlock could block remedial action. The fund also called for a more ambitious plan to lower Japan’s public debt.

“Policy indecision has exacerbated uncertainty and added to financial strains, feeding back into the real economy,” the IMF said in its latest World Economic Outlook report.

The IMF reduced its forecast for global growth to 4 percent for this year and next, cutting projections for almost every region of the world. Three months ago, it had projected an expansion of 4.3 percent for 2011 and 4.5 percent for 2012.

It cautioned that hasty budget cuts in the United States could further weaken growth, and it said the U.S. Federal Reserve should stand ready to ease monetary policy further. The Fed meets today and tomorrow.

The IMF cut its forecasts for U.S. growth to 1.5 percent for 2011 and 1.8 percent for 2012, down from June projections of 2.5 percent and 2.7 percent, respectively.