The International Monetary Fund (IMF) on Wednesday sharply revised its 2009 world economic growth projections downward to 0.5 percent, the lowest rate since World War II.

"The world economy is facing a deep recession," the IMF said in its updated World Economic Outlook. "Despite wide-ranging policy actions, financial strains remain acute, pulling down the real economy."

"A sustained economic recovery will not be possible until the financial sector's functionality is restored and credit markets are unclogged," it warned.

Accordingly, the world economy is projected to increase by only 0.5 percent in 2009, down by 0.75 percentage point from projections in November, the IMF said.

Advanced economies are suffering the deepest recession since World War II. Output of those nations are expected to contract 2.0 percent in 2009, a sharp downward revision from the negative 0.3 percent estimate two months ago.

The IMF also predicted that the US economy, at the center of an intensifying global financial storm, is to contract 1.6 percent in 2009, sharply down from its estimate of 0.7 percent growth issued just two months ago.

Growth in emerging and developing economies is expected to slow sharply from 6.25 percent in 2008 to 3.75 percent in 2009, under "the drag of falling export demand and financing, lower commodity prices, and much tighter external financing constraints."

China's growth rate is expected to ease from near 9.0 percent in 2008 to around 6.7 percent in 2009.

"Stronger economic frameworks in many emerging economies have provided more room for policy support to growth than in the past, helping to cushion the impact of this unprecedented external shock," the IMF said in its update.

Although these economies will experience serious slowdowns, their growth is projected to remain at or above rates seen during previous global downturns, it added.

Developing countries in Africa and elsewhere are also better prepared this time to face policy challenges because of improved macroeconomic policy implementation, but the continent is in a weaker position than most other regions because of its poverty levels and reliance on commodity exports, the IMF said.

As for the global economy, the IMF projected it might experience a gradual recovery in 2010, with growth picking up to 3 percent.

"However, the outlook is highly uncertain, and the timing and pace of the recovery depend critically on strong policy actions," it said.

The IMF called on its members to take new policy stimuli, saying "strong and complementary policy efforts are needed to rekindle activity."

"Monetary and fiscal policies need to become even more supportive of aggregate demand and sustain this stance over the foreseeable future, while developing strategies to ensure long-term fiscal sustainability," it said.

"Moreover, international cooperation will be critical in designing and implementing these policies," it added.

(Xinhua News Agency January 29, 2009)