WASHINGTON, April 8, 2008 (AFP) – The global economic outlook is increasingly grim with the United States mired in a recession from a housing meltdown whose effects are still spreading, the IMF said Wednesday.
Global expansion is set to slow to 3.7 percent in 2008 amid an unfolding crisis that began in the United States, the International Monetary Fund said in its semiannual World Economic Outlook (WEO) report.
The growth estimate is a half point lower than the January WEO update, it noted.
The US economy, the world’s biggest, is likely in a “mild recession” and will stagnate through much of 2009 as housing prices slide further and credit conditions remain difficult.
For the world economy, there is a 25 percent chance of dropping below three percent growth in 2008 and 2009, which according to the IMF would be the equivalent of a global recession.
“Moreover, growth is projected to remain broadly unchanged in 2009,” with growth in the advanced economies likely to fall “well below potential,” the 185-nation institution said.
The United States, the epicenter of the turmoil, is poised to grow a paltry 0.5 percent in 2008, the IMF said, despite a multibillion-dollar government stimulus