Global economy expected to shrink

The world economy is likely to shrink this year for the first time in six decades.

US President Barack Obama pledged to boost financial support for the IMF at the G 20 summit US President Barack Obama pledged to boost financial support for the IMF at the G-20 summit

The International Monetary Fund projected the 1.3% drop in a dour forecast.

That could leave at least 10 million more people around the world jobless, some private economists said.

"By any measure, this downturn represents by far the deepest global recession since the Great Depression," the IMF said in its latest World Economic Outlook. "All corners of the globe are being affected."

The new forecast of a decline in global economic activity for 2009 is much weaker than the 0.5% growth the IMF had estimated in January.

The report comes in advance of meetings between the US and other major economic powers, and sessions of the IMF and World Bank.

The talks will seek to flesh out the commitments made at a G-20 leaders summit in London last month, when President Barack Obama and the others pledged to boost financial support for the IMF and other international lending institutions by $1.1 trillion.

The IMF's outlook for the US is bleaker than for the world as a whole: It predicts the US economy will shrink 2.8% this year. That would mark the biggest such decline since 1946.

Among the major industrialised nations studied, Japan is expected to suffer the sharpest contraction this year: 6.2 percent. Russia's economy would shrink 6%, Germany 5.6% and Britain 4.1%. Mexico's economic activity would contract 3.7% and Canada's 2.5 percent.

Global powerhouse China, meanwhile, is expected to see its growth slow to 6.5% this year. India's growth is likely to slow to 4.5%.

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