The New Nation - Internet Edition

Internet, London

The global economy is facing its biggest crisis since the Great Depression of the 1930s, the International Monetary Fund (IMF) has warned.

Growth is projected to slow to 3.9% this year, far less than last year's 5%,

then expand just 3% in 2009, its worst performance since 2002. Anything figure of 3% or less has previously been labelled a recession by the IMF. "The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s," the report said. Its gloomy prediction was made before today's attempt by global central banks to calm the storm with a coordinated policy of 50 basis point interest rate cuts.

The US Federal Reserve, European Central Bank, Bank of England and counterparts in Canada, Sweden and Switzerland all sliced borrowing costs to help tackle the financial crisis. After four years of strong global growth thanks to emerging and developed economies, the IMF said the US would lead the globe into a major downturn.

America's economy, which grew by 2% last year, is seen slowing to 1.6% this year then only 0.1% in 2009, the grimmest display since the last recession 17 years ago. World stands on the brink of recession, warns IMF.