IMF Sees An Even Deeper Recession

The International Monetary Fund (IMF) is poised to reduce its global economic outlook for the fourth time since October.

Speaking in Lisbon Tuesday, Teresa Ter-Minassian, an adviser to IMF Managing Director Dominique Strauss-Kahn, said the Fund now expects the world's gross domestic product to contract by 0.6 percent this year, compared with a January forecast for growth of 0.5 percent.

The eurozone economy was forecast to contract by 3.2 percent in 2009, she said. The US would shrink by 2.6 percent and Japan 5 percent, making it the worst-hit big economy. The IMF in Washington said the figures cited by Ter-Minassian were 'unofficial' and 'out of date'.

Until now, the IMF has only said it will cut its global 2009 growth forecast to 'below zero' after worse-than-expected fourth quarter data. Strauss-Kahn told Reuters last week that advanced economies were moving too slowly in ridding banks of problems assets, which could jeopardize a global recovery in 2010. "The scenario will be worse, but the managing director has already said this" Ter-Minassian said.