In Europe, the crisis has stalled growth, and interest-rate cuts and decisive government action to restore confidence to prevent a lasting slowdown are needed, the report said.
The fund said growth in the euro zone was set to slow to 1.3 per cent in 2008, easing to a scant 0.2 per cent in 2009.
Asian powers China and India will also experience slower growth due to weaker exports, but should continue to be supported by solid private consumption, it said.
Growth in China is likely to come in at 9.7 per cent this year and 9.3 per cent in 2009 -- compared to 11.9 per cent in 2007, the IMF said. India will grow 7.9 per cent this year and slow to 6.9 per cent in 2009, it said.
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