The International Monetary Fund has issued a stark warning that the global economy is heading towards “economic derailment” unless central banks and governments make unpopular decisions to stabilise the economy.

IMF Deputy managing director, Davis Lipton, said action is needed to promote growth and dispel the notion that central banks are running out of ammunition. It now seems certain the fund will downgrade their economy growth forecast for the fourth consecutive year.

Lipton is calling on governments to borrow and invest more rather than just relying on central banks to promote growth through quantitative easing and negative interest rates.

Earlier in the week the central bank of central banks the Bank of International Settlements (BIS) warned markets are losing confidence in central banks to maintain stability in the financial sector.

According to the BIS, international bank to bank lending is contracting and growth is slowing. The BIS is forecasting interest rates are likely to go lower as central bankers attempt to encourage borrowing, spending and investment.

Since the start of the year, Alan Greenspan, Meryn King, RBS, UBS, BIS and now the IMF have all warned the global is on the brink of another economic crash.