Australian Treasury officials say the latest "sobering" global economic forecasts show there is a need for countries to act early and use bold measures to boost growth. Figures released by the International Monetary Fund show it expects world growth to grind to a virtual, halt this year. Australia is planning another multi-billion dollar stimulus package to help revive its faltering economy.
The International Monetary Fund, which oversees the world economy, has said that global growth is likely to rise by just a .05 percent this year - the lowest since the end of World War II - down from a November prediction of 2.2 percent.
In Australia, a decade-and-a-half of unprecedented economic prosperity is grinding to a halt, amid Asia's fading appetite for its mining resources.
Analysts believe Australia is on the brink of recession and with unemployment at a two-year high, the government is considering another massive injection of public funds to revive an ailing economy.
Late last year, Canberra gave away $5.5 billion (US) to pensioners and families, in an attempt to stimulate demand for goods and services.
With the International Monetary Fund predicting more gloom ahead, Australian Treasurer Wayne Swan says the domestic economy will need more government help...
"There is a very strong case for overwhelming force to be used in terms of direct stimulus to nations around the world," he said.
Australia's decline follows similar problems among its regional partners.
Demand for goods made in Asia has slumped, amid the deepening global crisis. China's exports in December fell by almost three percent, the biggest decline in a decade. Singapore's export trade also posted its worst performance for seven years.
Government officials in India say its exporters have recently cut a million jobs, as key markets in the U.S. and Europe suffer significant slowdowns.
The head of the Asia Development Bank, Haruhiko Kuroda, has warned that 2009 will be a bad year for Asia, with Japan's economy sliding further into reverse, while growth in China slowing to between seven and eight percent.
New Zealand's central bank has cut interest rates by 1.5 percentage points, in an attempt to stop the recession-hit economy from sliding deeper into negative growth.