IMF cuts forecast for third time in four months
The global recession and plunging commodity prices has led the International Monetary Fund (IMF) to drastically cut back its world growth forecasts for the third time in just four months.
Global growth is expected to fall to 0.5 per cent in 2009. Advanced economies will shrink by 2 per cent in 2009, while emerging economies will slow in the coming year, growing by only 3.25 per cent.
Financial markets will remain strained through 2009 until the financial sector is restructured and the uncertainty about losses is resolved.
The IMF has called for governments around the world to support economic growth, saying the implementation of fiscal stimulus must provide a key support for economic growth.
“Given that the current projections are predicated on strong and coordinated policy actions, any delays will likely worsen growth prospects. Countries that have policy room should make a firm commitment to do more if the situation deteriorates further,” said the IMF.
The Federal Treasurer, Wayne Swan, said it was inevitable that Australian jobs and growth would be affected.
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