WASHINGTON (AFP) - A recent spike in financial market volatility poses a major downside risk to the global economy and may curb the recovery from recession, the International Monetary Fund said Wednesday. Financial market volatility has risen dramatically in recent weeks, funding costs have increased, and risky assets have been sold off across all regions, the IMF said in a report presented to Group of 20 finance chiefs in early June. The developments reflect increased investor concern about Europes public finances, mounting policy uncertainty and revised market expectations about the strength of economic recovery and future growth prospects. Unless promptly addressed by credible policy action, financial market stresses could have material effects on growth, the IMF warned in the report prepared for a June 4-5 meeting of G20 finance ministers and central bank governors in Busan, South Korea. The IMF plans to update its World Economic Outlook growth forecasts on July 8.