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Financial crisis bringing global economy to standstill: IMF

 

By Veronica Smith

 

WASHINGTON (AFP) – The International Monetary Fund slashed its economic growth forecasts Wednesday, predicting the severe financial crisis would brake global growth to the slowest pace in six decades.

 

"World growth is projected to fall to 0.5 percent in 2009, its lowest rate since World War II," the IMF said in a sharp 1.75-point downward revision of November forecasts.

 

"The world economy is facing a deep recession" under continued financial stress, it warned.

 

The advanced economies were expected to contract by 2.0 percent, their first annual contraction in the post-war period and far more than the negative 0.3 percent the IMF estimated less than three months ago.

 

"Despite wide-ranging policy actions, financial strains remain acute, pulling down the real economy," the 185-nation institution said, warning its projections were made in a "highly uncertain outlook."

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