Global recession in 2009, forecasts IMFNovember 6th, 2008 - 10:33 pm ICT by IANS
Washington, Nov 6 (DPA) The International Monetary Fund (IMF) released its global economic forecast Thursday in the face of a growing credit crisis and predicted a recession in the US and the world in 2009.In an update of its World Economic Outlook from October, the IMF said global growth would slow to 2.2 percent in 2009, down from the 3-percent forecast made last month. Growth of under 3 percent is considered a global recession.
The US, the world’s largest economy, will contract by 0.7 percent and the euro area by 0.5 percent in 2009. Advanced economies as a whole will contract 0.3 percent, compared to 1.4-percent growth this year, it said.
All figures represent a downward revision of more than 0.7 percent from the IMF’s October forecast.
Developing and emerging economies by contrast will continue to lead growth in the world, increasing 5.1 percent in 2009. But that is still down from a forecast of 6.1 percent made in October. Growth in the developing world was forecast at 6.6 percent this year.
A global financial crisis has severely impacted the availability of credit around the world, curbing spending in wealthy nations and restricting poorer nations’ access to foreign investment.
“There has been a sharp worsening of credit conditions to emerging countries,” said chief IMF economist Olivier Blanchard.
The IMF expects sharp slowdowns in Eastern Europe as well as Russia and its neighbours. China’s economy will continue to grow at 8.5 percent in 2009, down from 9.7 percent this year and 11.9 percent in 2007.