WASHINGTON — The world economy is expected to contract in 2009 for the first time in 60 years and governments should do more to counter the downturn, the International Monetary Fund said Thursday.
The global economy will shrink between 0.5 percent and 1 percent this year, the IMF said, while the U.S. economy will contract 2.6 percent. The figures represent a sharp downward revision from the IMF’s January estimates, when it expected the global economy would grow 0.5 percent this year and the U.S. economy would shrink 1.6 percent.
The IMF made the projections in a paper it presented last week to a meeting of the Group of 20 finance ministers in London. The IMF released the paper Thursday.
In the paper, the IMF called on G20 governments to take steps to relieve their financial systems of distressed assets and free up credit.
