The International Monetary Fund (IMF) has become even gloomier about the prospects for the world’s economies.
It is predicting that developed economies as a whole will shrink by 0.3% next year, having predicted growth of 0.5% less than a month ago.
It would be the first time there has been an overall contraction in developed economies since World War II.
Worst hit will be the UK, shrinking 1.3%, followed by Germany at 0.8% and the US and Spain contracting by 0.7%.
Emerging economies have also been downgraded, with the forecast of Chinese growth down from 9.3% to 8.5%, India down from 6.9% to 6.3% and Russia down from 5.5% to 3.5% growth.
The IMF is still expecting the overall global economy to grow in 2009, but it has cut its growth forecast to 2.2% from the previous estimate of 3%
“Prospects for global growth have deteriorated over the past month, as financial sector deleveraging has continued and producer and consumer confidence have fallen,” the IMF said in its report.
Not looking good for the world in the coming year. It will be interesting to see where the Obama team wioll take the US and eventually the world.