The global economy is "dangerously close to a recession," Morgan Stanley says, slashing its growth forecast for 2011 and 2012.

The financier cited recent policy errors in the U.S. and Europe and the prospect of further fiscal tightening in 2012.

Morgan Stanley cuts its global gross domestic product growth forecast to 3.9 percent from 4.2 percent for 2011, and to 3.8 percent from 4.5 percent in 2012.

"While we had been calling for a BBB recovery in DM (developed markets) all along, the path now looks even more Bumpy, Below-par and Brittle than previously thought," Morgan Stanley said in a note to clients dated Aug. 18, adding that emerging markets were not immune either.

It now sees growth in developed market economies averaging only 1.5 percent this year and next.

(Reporting by Tenzin Pema in Bangalore; Editing by Mathew Veedon)