Latest IMF World Economic Outlook Update

(January 28, 2009)

(Summary)

            World growth is projected to fall to � percent in 2009, its lowest rate since World War II.  A sustained economic recovery will not be possible until the financial sector's functionality is restored and credit markets are unclogged.

 Financial market conditions have remained extremely difficult for a longer period than envisaged in the November 2008 WEO Update. Global output and trade plummeted in the final months of 2008. Against this uncertain backdrop, output in the advanced economies is now expected to contract by 2 percent in 2009. Growth in emerging and developing economies is expected to slow sharply from 6� percent in 2008 to 3� percent in 2009. The slump in global demand has led to a collapse in commodity prices. Sluggish real activity and lower commodity prices have dampened inflation pressures. Downside risks continue to dominate, as the scale and scope of the current financial crisis have taken the global economy into uncharted waters. In current circumstances, the timely implementation of fiscal stimulus across a broad range of advanced and emerging economies must provide a key support to world growth.

Source:           http://www.imf.org/external/pubs/ft/weo/2009/update/01/