The International Monetary Fund said global economic activity has slowed and business confidence has declined further, following the September 11 terrorist attacks. IMF has again revised its global growth forecast downward.
The International Monetary Fund said the world economy is expected to grow only 2.4 % this year and the same in 2002.
That is a full 1% lower for 2002 than was forecast one month ago.
The revised forecast is a big decline from the 4% growth of recent years and the worst global performance in 10 years.
But International Monetary Fund Managing Director Horst Koehler said the world economy will not fall into recession. "We expect that the outcome of the slowdown will be less severe than the recessions in 1991 and in the early 80's. And as long as we stay above these downturns we feel it is not the worst case scenario," he said.
Mr. Koehler called the global economic situation difficult, but manageable.
The former German finance official said developed countries must assure that their economic policies promote growth.
Mr. Koehler said the aggressive easing of U.S. monetary policy will have a positive impact. Japan, he said, should inject more money into its economy to pull the country out of recession.
The IMF chief welcomes the World Trade Organization pledge of further trade liberalization, but said rich countries must end their agriculture subsidies. "I do not think that it is anymore acceptable that the rich countries, with their huge billions of subsidies, are distorting markets to the disadvantage of the poorest," he said.
Finance ministers from rich and developing countries will meet Saturday in Ottawa, Canada to assess global economic conditions in the aftermath of the terrorist bombings.