IMF Sees “Major Downturn” In 2009

It has been another tough day for the markets, and according to the International Monetary Fund the global economic slowdown will extend into 2009.

Of course, that is something we’ve known all along. Even still their outlook paints a gloomy picture of what’s to come.

From Bloomberg by Christopher Swann entitled: IMF Predicts Global Economy Heads for ‘Major Downturn’ in 2009

Global growth is headed for a “major downturn” next year, as U.S. gross domestic product grinds close to a halt, the International Monetary Fund said in a staff report prepared for a Group of Seven meeting this week.

The U.S. will expand 0.1 percent next year, after growth of 1.6 percent this year, the IMF said in the report prepared for the Oct. 10 meeting of finance ministers and central bankers from the G-7 industrial nations. In its World Economic Outlook in April, the IMF said the U.S. would grow 0.5 percent this year and 0.6 percent next. A revised WEO will be released tomorrow

Of advanced economies, the IMF made its steepest reduction in the growth prediction for U.K., which the fund predicted will contract by 0.1 percent next year, the report said. Six months ago, the IMF forecast U.K. growth 1.6 percent in 2009.

“The global economy is entering a major downturn,” the fund said in the report, dated Oct. 4. “Many advanced economies are now close to recession, while emerging economies are also slowing rapidly.”

Global growth will slow to 3 percent in 2009, compared with a forecast in April of 3.7 percent. This year the global economy is expected to grow by 3.9 percent.

A recession in the U.S. is “looming,” growth in western Europe is “weakening markedly,” activity in Japan is “cooling rapidly” and emerging countries “have not decoupled from this downturn” the report said.

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