Buckling under the weight of the worst financial crisis to affect the U.S. economy in the last half-century, global economic growth is forecast to slip to 2.8% in 2008 and 2.4% in 2009, according to the latest World Outlook from the Conference Board of Canada.

“A number of developed countries are close to recession, and given the current state of financial markets, weak economic growth is expected to last through 2009,” says Kip Beckman, principal research associate at the Ottawa-based think tank.

“Developing countries such as China and India have picked up the slack in the world economy, although they too are now being affected by the global slowdown,” Beckman says.

Strong exports enabled the U.S. economy to avoid a technical recession over the first two quarters of 2008, but the slump in consumer spending is pushing the United States into recession. This outlook calls for real GDP growth of 1.8% this year and 0.5% in 2009.

With GDP growth stalled in the United Kingdom, Germany, and France, the economic outlook for Europe is pessimistic.

Japan is likely to slip into recession, but most other Asia-Pacific economies are expected to avoid recessions. Even China’s economy has lost momentum lately, due to a slowdown in export growth. After growing by 12% in 2007, real GDP growth will slip into single digits in both 2008 and 2009. The view that most economies in the region could “decouple” from the U.S. economy-therefore continuing to expand at a brisk pace-has been challenged, the Conference Board says.

The turmoil in the United States is limiting Canadian economic growth to 0.8% in 2008, but the Conference Board’s current projection is that Canada will skirt a recession.

IE