Forecast Fears

The economic outlook is expected to be gloomy when the US-based IMF releases its report next week.

The ongoing credit crisis, high oil prices, weakening business confidence and a slowdown in consumer spending are all seen as contributing to the crisis.

Germany, Europe's biggest economy, isn't facing a recession, but the IMF predicts its growth rate will fall to 1.2 percent for 2008, the German news weekly Die Zeit reported Tuesday ahead of its publication on Thursday. The Financial Times Deutschland also reported similar figures in its Wednesday edition.

The IMF, an international organization with oversees the global financial system, had originally forecast 1.5 percent growth for this year.

While German economists have scaled back growth predictions numerous times since October 2007, the German government is still predicting 1.7 percent growth for 2008.

The euro zone will likely see a 2 percent growth rate in 2008, down from an expected 2.2 percent, Joaquin Almunia, the EU Commissioner for Economic and Monetary affairs said Monday night.

Recession looms for US

The US will experience at least two successive quarters of negative growth, the technical definition for a recession, according to the upcoming IMF report. Die Zeit cited unidentified sources familiar with the upcoming report which will be released at the IMF's spring meeting together with the World Bank next week.

The IMF had previously forecast a US growth rate of 1.5 percent, according to the newspaper.

The IMF expects the global economy to grow 3.7 percent this year, according to the Financial Times Deutschland.