IMF now sees deeper global recession

Investors should brace for the most severe global economic downturn since the youthful days of the their grandparents. The International Monetary Fund now expects the 2009 global economy to contract 1.3 percent, the organization announced Wednesday, in its latest economic forecast, the World Economic Outlook (WEO).

Earlier this year, the IMF had forecast that the global economy would contract 0.5 percent. Further, because the global economy has a greater capacity for growth, any global growth rate below the 1.5 to 1.8 percent range is tantamount to a recession.

If the contraction turns out to be as pronounced as now forecast, it would be by far the global economy's worst performance since the end of World War II, when production in developed nations declined as nations demobilized.