Downside risks and vulnerabilities have risen, G20 nations said in its latest assessment of the world's economy. But they stressed the magnitude of recent market volatility has not reflected the underlying fundamentals of the global economy.

"Downside risks and vulnerabilities have risen, against the backdrop of volatile capital flows, a large drop of commodity prices, escalated geopolitical tensions, the shock of a potential UK exit from the European Union and a large and increasing number of refugees in some regions," said the communiqué released at the end of the two-day meeting.

"While recognizing these challenges, we nevertheless judge that the magnitude of recent market volatility has not reflected the underlying fundamentals of the global economy," it said.

Top leaders pledged to use all policy tools – monetary, fiscal and structural – individually and collectively to achieve "strong, sustainable and balanced growth".

Monetary policies will continue to support economic activity and ensure price stability, consistent with central banks' mandates, but G20 also warned that monetary policy alone cannot lead to balanced growth. Fiscal policy will be used flexibly to strengthen growth, job creation and confidence, while enhancing resilience, and ensuring debt as a share of GDP is on a sustainable path.

The G20 nations have also committed to further enhancing the structural reform agenda, including by developing a set of priorities and guiding principles as a reference for G20 reform efforts. They will also create an indicator system to further improve the assessment and monitoring of the progress of structural reforms.