A recession is looming, and that means investors will encounter more uncertainty about what could happen, top economist, Mohamed El-Erian has said. 

Markets are keeping a close eye on an imminent economic downturn after a basket of warnings from Wall Street analysts. At the same time, the International Monetary Fund has said it expects a recession to hit one-third of the world this year.

"In this new year, recession, actual and feared, has joined inflation in the driver seat of the global economy and is likely to displace it," El-Erian said in a Financial Times opinion column Monday.

That would typically cause more market turbulence — something BlackRock strategists have also forecast, as they warned central bankers are unlikely to come in for rescue like they used too.

"It's an evolution that makes the global economy and investment portfolios subject to a wider range of potential outcomes — something that a growing number of bond investors seem to realize more than many equity counterparts," El-Erian said.

Analysts and investors are convinced that central-bank tightening will send the US into recession, and Bank of America, among other big Wall Street banks, has warned a downturn could help drag stocks 20% lower. 

El-Erian, who has previously criticized the Fed for being sluggish, said in his op-ed that the rate hikes came too late to tame inflation pressures from spreading to wages and the service sector.

"As such, inflation is likely to remain stubborn at around 4 per cent, be less sensitive to interest rate policies and expose the economy to a higher risk of accidents induced by additional policy mistakes undermining growth," he said. 

The economist warned against being too complacent about the forces behind the coming economic downturn.

"The uncertainties facing each of these three economic areas suggest that analysts should be more cautious in assuring us that recessionary pressures will just be 'short and shallow,'" El-Erian said. 

"They should keep an open mind, if only to avoid repeating the mistake of prematurely dismissing inflation as transitory," he added.