By Jonathan Davies

The International Monetary Fund (IMF) is expected to downgrade its growth forecast for the global economy as financial markets continue to deal with slowing growth in China.

Christine Lagarde, the head of the IMF, has warned that economies are facing a 'triple threat' - slowing growth in China, low commodity prices and the coming prospect of an interest rates rise in the US.

Ms Lagarde said growth is likely to be lower than the IMF's July forecast of 3.3% in 2015 and 3.5% in 2016.

Speaking in Jakarta, the IMF managing director said: "Asia as a region is still expected to lead global growth. But even here, the pace is turning out slower than expected–with the risk that it may slow even further given the recent spike in global risk aversion and financial market volatility."

"As the Chinese economy is adjusting to a new growth model, growth is slowing–but not sharply, and not unexpectedly. The transition to a more market-based economy and the unwinding of risks built up in recent years is complex and could well be somewhat bumpy," she said.

"That said, the authorities have the policy tools and financial buffers to manage this transition. Other emerging economies, including Indonesia, need to be vigilant to handle potential spillovers from China’s slowdown and tightening of global financial conditions."

Earlier today, a contraction in China's manufacturing sector sparked another slump in share prices in European markets.