Washington, Dec 11: The deep rooted global economic crisis has made the International Monetary Fund (IMF) to cut its global growth forecast in January, the institution's deputy chief has said.
First Deputy Managing Director John Lipsky said on Wednesday, Dec 10 that the IMF's November prediction of 2.2-percent growth in 2009 was probably too high, as the financial sector has continued to unravel and the world economy has plunged further toward recession.
Global growth of below 3 per cent is considered a worldwide recession. The World Bank, the IMF's sister organisation, said on Monday, Dec 8 that it expected global growth to fall to 0.9 per cent next year.
'Based on recent developments, it seems likely that we will further mark down our forecasts for global growth,' Lipsky said in a video message to a Frankfurt financial forum.
Industrial nation economies, most of which are already in a recession, are forecast to shrink as a group in early 2009 for the first time since World War II.
Lipsky said the IMF still expected a 'gradual recovery to begin before the end of 2009'.