The Federal Reserve would spark "panic and turmoil" in emerging markets if it decides to raise interest rates next week, the chief economist for the World Bank warns.

The U.S. central bank should hold off on a hike until the global economy is more stable, Kaushik Basu told the Financial Times.

"I don't think the Fed lift-off itself is going to create a major crisis but it will cause some immediate turbulence," he was quoted as saying.

"The world economy is looking so troubled that if the U.S. goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly," he said.

The central bank has kept short-term interest rates at record lows near zero since December 2008. Fed officials have said they will likely start boosting interest rates this year.

An increase in rates at the Fed’s meeting next week would risk creating “panic and turmoil” in emerging markets, and would lead to “fear capital” leaving those nations along with swings in their currencies, Basu told the Financial Times.

The World Bank warning comes just days after the head of the International Monetary Fund, Christine Lagarde, cautioned the Fed that it shouldn't rush its decision to raise interest rates and should move only when it is sure the decision is unlikely to be reversed later.

Many emerging market economies are concerned that a Fed rate rise would trigger large outflows of capital from emerging economies into dollar-denominated assets, creating market turmoil that would hurt growth, Reuters reported.

Finance ministers and central bankers of the world's 20 biggest economies discussed the issue thoroughly at a recent meeting in Ankara, Lagarde told a news conference after the talks.

"It should really do it for good, if I may say," Lagarde said. "In other words, not give it a try and have to come back."

"So, what we have said is, the IMF thinks that it is better to make sure that the data are absolutely confirmed, that there is no uncertainty, neither on the front of price stability, nor on the front of employment and unemployment, before it actually makes that move," she said.

"And that would call for being in the curve, rather than necessarily ahead of the curve or indeed behind the curve."

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