KEY POINTS:
The International Monetary Fund (IMF) has slashed its growth forecast for the world economy in 2008, virtually confirming the United States is headed for recession.
The unscheduled revision to the IMF's World Economic Outlook, which was released only last October, stresses that "the risks to the global economy remain on the downside" and reduces the growth projection for the second time in less than six months.
The IMF now expects global GDP growth to reach 4.1 per cent this year rather than its previous forecast of 4.4 per cent, both considerably down on the 4.9 per cent outturn in 2007.
For the US, the IMF cut its forecast for this year by 0.4 per cent to 1.5 per cent and lowered the Eurozone's projection by 0.5 per cent to 1.6 per cent. The IMF will produce a figure for the UK in the northern spring.
The forecast for the American economy has now fallen from 2.8 per cent to 1.5 per cent in less than six months.
Although the usual definition of a recession is two successive quarters of negative growth, the National Bureau for Economic Research in the US has made it clear that any severe downturn could qualify as a recession, if it represents "a significant decline in economic activity".
- INDEPENDENT
