Global financial overseer IMF warned Tuesday that the European Union and the United States face recession if the sovereign debt crisis is not resolved even as it predicted lower economic growth for the two countries.

The warning was contained in the IMF's latest World Economic Outlook released ahead of the IMF and Group of 20 nations annual fall meeting in Washington, D.C. this week.

IMF chief economist Olivier Blanchard called on finance ministers and central bankers to come up with strong policies and cooperative action plan to revive the economy and reduce risks, according to The Wall Street Journal.

The IMF report was reinforced Tuesday by the downgrading of Italy's credit rating by Standard & Poor's that prompted the European Central Bank to buy the country's government bonds to prevent yields from increasing. Greece is also knocking on the troika lenders' doors for the release of an $8 billion tranche of bailout money to fund government operation.

Meanwhile, the IMF revised its U.S. growth forecast for 2012 to 1.8 percent from 2.7 percent made in June. For the Eurozone, 2012 growth projection was cut to 1.1 percent from 1.7 percent.

The IMF also downgraded growth forecast for Britain next year to 1.6 percent from 2.3 percent.

This year's growth forecast for the EU, US and UK were also slashed by IMF.