IMF: World economy 'to shrink 1.3%'

IMF says world to face deepest recession since 1945 but may grow 1.9 per cent next year.

    The IMF said international trade volume was expected to plunge by 11 per cent this year [AFP]

    Three months ago, the IMF had projected a global growth rate of 0.5 per cent, although last month it warned of a deep recession.

    The Washington-based body said it revised its forecasts downward because financial markets, hit by the fallout from the subprime mortgage crisis and the collapse of investment banks, would take longer to recover than was previously thought.

    Global slowdown

    Your Views

    "The reality is that hundreds of businesses are getting shut down on a daily basis, sending tens of thousands out of employment"

    Anver Kamiss, Colombo, Sri Lanka

    Send us your views

    The US remained at the centre of the global economic and financial crisis, the IMF said

    The US economy, the largest in the world, was set to contract by 2.8 per cent in 2009, while Japan's, the second-largest, would shrink 6.2 per cent.

    The IMF forecast contractions of 4.2 per cent in the European Union, 4.1 per cent in Britain and six per cent in Russia, and cut growth forecasts for China and India, to 6.5 per cent and 4.5 per cent respectively.

    The crisis has also hit international trade, the IMF said, with volume expected to plunge by 11 per cent this year before rising by just 0.6 per cent in 2010.

    The IMF said on Tuesday that banks and other financial institutions around the world face losses of up to $4.1 trillion.

    It also said banks would very likely need to raise $875bn in fresh capital.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    The War in October: What Happened in 1973?

    The War in October: What Happened in 1973?

    Al Jazeera examines three weeks of war from which both Arabs and Israelis claimed to emerge victorious.