WASHINGTON, DC: The UK is likely to be one of the biggest casualties of the global economic downturn, with the International Monetary Fund predicting its economy will shrink by 1.3% in 2009, compared with its previous forecast of negative growth of 0.1% for the year.
According to the IMF's analysis, global economic growth will slow to 2.2% in 2009, down on the organisation's earlier estimate of around 3%.
Advanced economies are likely to post an overall improvement of 0.3% (down from 0.5%) in all, with nations with high debt levels, such as the UK, particularly at risk.
Declining commodity prices have also hit export-driven economies like Russia and countries in sub-Saharan Africa, making investors increasingly hesitant about emerging markets.
The IMF's report further forecasts: “Financial conditions are likely to remain tight for a longer period and be more impervious to policy measures than previously expected.”
On a brighter note, the IMF opines that the US, China and most European countries still have the resources to increase spending or cut taxes if necessary.
According to the IMF's analysis, global economic growth will slow to 2.2% in 2009, down on the organisation's earlier estimate of around 3%.
Advanced economies are likely to post an overall improvement of 0.3% (down from 0.5%) in all, with nations with high debt levels, such as the UK, particularly at risk.
Declining commodity prices have also hit export-driven economies like Russia and countries in sub-Saharan Africa, making investors increasingly hesitant about emerging markets.
The IMF's report further forecasts: “Financial conditions are likely to remain tight for a longer period and be more impervious to policy measures than previously expected.”
On a brighter note, the IMF opines that the US, China and most European countries still have the resources to increase spending or cut taxes if necessary.
Data sourced from Financial Times; additional content by WARC staff