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WORLD> America
IMF cuts 2009 world growth forecast to 0.5%
(Agencies)
Updated: 2009-01-27 16:27

The International Monetary Fund (IMF) has slashed its forecasts for 2009 global growth to 0.5 percent from 2.2 percent in its last economic outlook in November, a Group of 20 (G20) finance official said on Monday.

A person walks past a shop window advertising 50% off sales in the eastern town of Dresden, January 14. The International Monetary Fund has slashed its forecasts for 2009 global growth to 0.5 percent from 2.2 percent in its last economic outlook in November, a Group of 20 finance official said on Monday. [Agencies]

The fund forecast the US economy to contract 1.6 percent this year compared to an earlier forecast of a 0.7 percent fall, said the official, who had access to the forecast. It sees US growth at 1.6 percent in 2010.

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The IMF's revised economic outlook forecasts 2010 world growth of 3 percent, said the official, speaking on condition of anonymity. The revised forecasts are to be released in the next few days.

The IMF also cut its forecast for the euro zone this year to show the economy shrinking 2 percent versus a 0.5 percent decline in November. It estimated 2010 growth at 0.2 percent.

For Japan, the IMF forecasts growth of -2.6 percent in 2009, down from -0.2 percent in November. In 2010 Japan will see growth of 0.6 percent.

The source said the IMF explained the downward revisions to 2009 forecasts by saying that the financial crisis remained acute and that the downturn was hurting the financial sector.

The Group of 20 groups the Group of Eight wealthy nations and leading developing economies.

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