BLEAK OUTLOOK
The International Monetary Fund (IMF)'s latest projections put global economic growth, which stood at 5 percent last year, at 3.7percent in 2008 and an even weaker 2.2 percent next year.
In the United States, the epicenter of the financial meltdown, the economy is projected to moderate from last year's 2 percent to just 0.1 percent in 2009, the worst showing since 1991.
The U.S. economy "is likely to contract in the current quarter and into early 2009," the IMF said in its semi-annual World Economic Outlook report last month, indicating that the United States is already in recession -- defined by contraction for two straight quarters.
The U.S. economy is likely to worsen as financial institutions strengthen their lending rules, leading to liquidity problems. Financial stress has emerged in U.S. industries ranging from housing and cars to wholesale.
The IMF also forecast a "significant slowdown" in economic growth across Europe. Germany, the largest economy in Europe, is expected to contract by 0.8 percent next year.
Meanwhile, growth in Japan will cool to 0.7 percent this year from 2.1 percent in 2007.
"The major advanced economies are already in or close to recession," said the IMF.
Growth in emerging and developing economies is also expected to slow significantly to about 5.1 percent in 2009, according to the IMF.
"With a recession now looking increasingly likely, the key questions are, how deep will the downturn be, when will a recovery get under way and how strong will it be," the IMF noted.
World Bank Chief Economist Lin Yifu told Xinhua that despite various "unprecedented" stimulus plans of the United States and European nations, recession in those countries seems "inevitable."
Meanwhile, the financial crisis has raised grave concern over such issues as food security, trade protectionism and poverty, especially in the emerging and poor economies.
Recession in rich countries is likely to lead to a cut in foreign investment and economic aid to emerging economies, which are already facing declining export, usually a propeller for their economic growth, analysts say.
As both UN Secretary-General Ban Ki-moon and World Bank chief Robert Zoellick pointed out, more actions are needed to prevent the world financial crisis from turning into a "human crisis."
INTERNATIONAL COOPERATION
As the financial turmoil deepens, the international community has been calling for intensive cooperation to tide over the crisis.
Rich nations and emerging economies alike have taken extraordinary measures to stabilize financial markets and stimulate the economy.
U.S. President-elect Barack Obama is preparing a massive, two-year economic rescue package totaling about half a trillion dollars in the face of a "crisis of historic proportions."
Obama also plans to create 2.5 million new jobs, cut taxes for the poor and middle class and significantly raise investments in energy-saving and other technologies.
As early as in February, the U.S. government announced a 168-billion-dollar package of tax rebates, followed by a 700-billion-dollar bailout plan in October to take toxic mortgage assets off financial companies.
In an further effort to thaw out the credit squeeze, the U.S. Federal Reserve last month unveiled a plan worth 800 billion dollars to buy mortgage-related debts and back consumer loans.
Other major economies are also taking such bold and substantial action in order to overcome the financial meltdown.
On Oct. 13, Britain announced a rescue plan of 37 billion pounds (64 billion dollars) to keep three major banks -- Royal Bank of Scotland, HBOS and Lloyds TSB -- afloat.
The same month, Japan unveiled a 5-trillion-yen (51-billion-dollar) package of spending measures to support its economy. Germany also plans to inject up to 25 billion euros (32 billion dollars) to boost business.
Last month, China announced a 4-trillion-yuan (584-billion-U.S.dollar) economic stimulus package designed to boost domestic demand and maintain fast and steady growth amid the crisis.
Growth in China is considered a key contributor to international efforts to maintain financial stability and promote global economic growth under the current circumstances, analysts say.
Apart from the bold actions on the national level, the financial crisis has prompted unprecedented cooperation among world economies.
During a Group of 20 summit in Washington on Nov. 15, world leaders pledged rapid action to strengthen oversight of major global financial institutions and to seek a breakthrough in the Doha round of trade negotiations by year's end.
A week later in the Peruvian capital Lima, leaders of the Asia-Pacific Economic Cooperation (APEC) member economies vowed to support the Washington Declaration and not to raise new barriers to investment and trade in the next 12 months.
Meanwhile, the IMF and some regional development banks are offering timely aid to countries hit hard by the financial crisis.
The IMF has so far provided aid totaling some 40 billion dollars to such countries including Hungary, Ukraine, Iceland and Pakistan.
The rescue plans from world economies have helped boost investor confidence, stabilize financial markets and spur growth, but prospects for the global economy remain unclear as the financial storm continues to rage.
More effective monetary and fiscal policies are needed to help shore up growth and straighten out the world economy as a gloomy picture seems almost certain in the coming year, said the IMF.
