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.
Data sourced from Financial Times; additional content by WARC staff