World economy to shrink for first time in 60 years

WASHINGTON (AFP) — The International Monetary Fund said on Thursday that the world economy, reeling from financial crisis, was on track to shrink for the first time in 60 years in 2009, by as much as 1.0 percent. In a report prepared for the Group of 20 meeting of finance chiefs last week in Britain and published Thursday, the IMF slashed forecasts from two months ago to a global contraction of between 0.5 percent and 1.0 percent. The latest IMF projections were sharply lower than those in the World Economic Outlook update published on January 28 that had put global growth at an annual rate of 0.5 percent. "Global economic activity is falling — with advanced economies registering their sharpest declines in the post-war era — notwithstanding forceful policy efforts," the IMF staff report said. The revisions "reflect unrelenting financial turmoil, negative incoming data, sinking confidence, and the limited effect to date of policy responses with respect to the restoration of financial system health." … Advanced economies were expected to suffer "deep recessions" in 2009, shrinking between 3.0 and 3.5 percent, according to the IMF report. …

World economy to shrink ‘for first time in 60 yrs’