The International Monetary Fund has said the world economy is likely to shrink for the first time in 60 years this year by as much as 1%.
The IMF report was prepared for the Group of 20 meeting of finance chiefs last week in Britain and published today.
The IMF slashed forecasts from two months ago to show the world economy contracting between an annual rate of 0.5% and 1%.
The revised projections relative to the World Economic Outlook update published on January 28 'reflect unrelenting financial turmoil, negative incoming data, sinking confidence, and the limited effect to date of policy responses with respect to the restoration of financial system health,' the IMF staff report said.
The report also said the world economy was expected to gradually stage a 'modest recovery' in 2010, with growth between 1.5% and 2,5%, though there were risks to this forecast.
The IMF said advanced economies were expected to suffer 'deep recessions' in 2009, with the US economy shrinking by 2.6% and Japan by 5.8%. The euro zone was expected to contract by 3.2%.
