The International Monetary Fund released its April World Economic Outlook report today, and economists and policy makers around the globe are squirming over its findings.  The latest IMF projections show the global economy in its worst recession since World War II.  

The global economy is in a severe recession inflicted by a massive financial crisis and an acute loss of confidence. Wide-ranging and often unorthodox policy responses have made some progress in stabilizing financial markets but have not yet restored confidence nor arrested negative feedback between weakening activity and intense financial strains. While the rate of contraction is expected to moderate from the second quarter onward, global activity is projected to decline by 1.3 percent in 2009 as a whole before rising modestly during the course of 2010 (see right). This turnaround depends on financial authorities acting decisively to restore financial stability and fiscal and monetary policies in the world’s major economies providing sustained strong support for aggregate demand.

The U.S. economy is projected to contract at a rate of 3.8% (-3.8% growth), while Britain is expected to see contraction of 4.1%.  Japan is heading for growth of -6.2%.  The Euro Area as a whole is projected to see -4.2% growth--Germany leading the way at -5.6%; -3.0% for France and Spain, and -4.4% for Italy.  China and India are projected to see economic growth of 6.5% and 4.5%, respectively. The report does project global economic growth for 2010, but at a relatively slow rate of 1.9%.  

You can read the first chapter of the report here, or a summary from the IMF press office here.  And watch Olivier Blanchard (at left), director of IMF's Research Department, introduce the report by clicking here.