Economic downturn in many countries will worsen, IMF report says

In its latest world economic outlook report, the International Monetary Fund (IMF) says that if the financial crisis continues, the economic downturn in many countries will worsen.  The report comes before IMF-World Bank meeting in the US this week.

The signs of a marked slowdown in growth are quite obvious in the global economy and there is a dire need to develop a decisive policy to restore financial confidence.

According to the report, the turmoil that is confined to the financial sector now is likely to spread. It estimates that the financial losses from the credit crisis will be around $1.4 trillion while in an earlier estimate the amount of financial losses was around $1 trillion.IMF economists believe that such downturns are expected after a quick expansion in borrowing and rising house prices.

The annual IMF-World Bank meeting in the US has taken on special significance because of the worldwide credit crisis. The meeting will bring together economic experts and finance ministers from all around the world.

The worldwide high commodity prices, the growing financial crisis and the housing slump are the factors that hit the global economy.

The report urges the governments to co-ordinate their actions.

“To restore confidence in the global financial system and get rid of the current financial crisis we need internationally coherent and decisive policy measures,” the report says.