The current global economic downturn is deepening as the twice-yearly World Economic Outlook of the International Monetary Fund indicates. While it predicts that the world economy will grow by 0.5 percent in 2009, down from the 2.2 percent forecast earlier, the outlook for developed countries is bleaker. Their economies as a whole will shrink by 2 percent, worse than the 0.3 percent shrinkage forecast earlier and the first negative growth of the post-World War II years.
The IMF says growth in the United States and Japan will be minus 1.6 percent and minus 2.6 percent, respectively, compared with previous estimates of minus 0.7 percent and minus 2 percent. The euro-zone economy will contract by 2.0 percent, compared with the 0.5 percent contraction estimated earlier.
The Bank of Japan predicts that Japan's economic growth in fiscal 2008 and 2009 will be minus 1.8 percent and minus 2.0 percent, respectively — worse than the postwar low of minus 1.5 percent in fiscal 1998. BOJ Gov. Masaaki Shirakawa said it's as though the world economy was falling off a cliff.