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UN: World Economy Will Slow to 1 Percent Growth Next Year

A United Nations report says world economic growth is likely to slow to one percent next year from 2.5 percent this year as a result of the global financial crisis.

The report by U.N. experts says that under a more "pessimistic" scenario, the global economy may even contract slightly next year. The U.N. released its 2009 economic forecast Monday at a development conference in Qatar.

The U.N. study predicts developing countries will see economic growth drop to 2.7 percent next year. It says that level is "dangerously low" for developing nations struggling to reduce poverty and maintain social and political stability.

In another development, eurozone finance ministers met in Brussels today to discuss a European Commission proposal to spend $253 billion on boosting EU economies.

Germany and Poland have criticized the proposal, saying they will not go on a spending spree to please their neighbors.

A purchasing managers' index for the 15-nation eurozone issued Monday shows manufacturing activity in the region dropped to a record low last month. A similar index shows factory output in China also slumped last month.

The global financial crisis is prompting one of Germany's major banks to cut thousands of jobs. BayernLB said Monday that it will lay off 5,600 workers, or more than a quarter of its staff, by 2013.

Bayern is partly owned by the German state of Bavaria. The bank said last week that it will request $32 billion (25 billion euros) in fresh capital and loan guarantees from state and federal governments to help it cope with the financial turmoil.

The U.N. report urges nations to coordinate massive economic stimulus packages to limit the fallout from the global slowdown. It also calls for stronger regulation of financial markets and more inclusive global economic governance.

Some information for this report was provided by AFP, AP and Reuters.