IMF Downgraded Global Economy Growth This Year

Governments need to take steps to boost growth but also tighten regulation, Lord Peter Mandelson, UK Business Secretary, told CNBC Wednesday, as the IMF forecast that the UK recession won't end until 2011, one year later than most developed economies.The International Monetary Fund expects the global economy to contract 0.6 percent this year, according to forecasts provided on Tuesday by an IMF official.It compares with the IMF's last official forecast for the global economy, released in January, which pointed to global growth of 0.5 percent.

The U.S. economy is seen shrinking 2.6 percent this year, compared with a January forecast of a 1.6 percent contraction. The euro zone economy is expected to contract 3.2 percent, down from January's forecast of a 2 percent decline. Japan's economy was seen diving 5 percent this year, sharply down from the last forecast of a 2.6 percent contraction. Until now, all the IMF has said is that it expects global economic output to be "below zero" and Strauss-Kahn has called the current slowdown the "Great Recession".

Forecasts on World Economic Growth
2009 2010
Global Economy -0.6 2.3
United States -2.6 0.2
Euro Zone -3.2 0.1
Japan -5.0 0.0
UK -3.8 -0.2
Canada -2.0 1.2
G7 -3.2 0.2
Asia 3.6 5.8
Latin America -0.6 2.3

Source: IMF