IMF slashes 2009 global GDP growth forecast to 0.5%

LONDON — The International Monetary Fund has cut its prediction for GDP growth for 2009 for the second time in three months. The cut was larger than expected and moves the estimate for growth from 2.2 percent to 0.5 percent, according to online reports.

The downward revision implies that the emerging economies of the world are going to see close low growth and may even dip into recession while the recession in the advanced economies will be more pronounced than previously thought.

In October the IMF was predicting growth of 3.0 percent with a recessionary trend in the west offset by continued growth in emerging countries such as Brazil, India and China. The IMF is now predicting that world growth in 2010 will pick up to 3 percent, according to reports.

The IMF revised its forecast for the U.S. economy to a contraction of 1.6 percent in 2009. This was down from a 0.7 percent fall although the U.S. economy is expected to grow 1.6 percent in 2010. The Eurozone forecast has been cut to 2 percent contraction with 2010 growth now expected to be 0.2 percent.

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