Expressing a sentiment identifying the current economic downturn as the world’s first year of contraction since the 1930s, the United Nations says the world economy faces its worst downturn since the Great Depression. The UN's World Economic Situation and Prospects 2009 report gives three forecasts for growth next year - a baseline forecast of 1% growth, a pessimistic scenario of a 0.4% contraction and an optimistic scenario of 1.6% growth. This compares with growth of 2.5% in 2008 and 3.8% in 2007. It expects world economic output to shrink by as much as 0.4% in 2009, due to a slump among developed countries - particularly the US and in Europe.

The report added there had been complacency about the impact of the financial crisis on poorer countries.

The UN expects developed economies to shrink by up to 1.5%, while developing nations should expand by at least 2.7%.

Rob Vos, chief economist at the UN Secretariat and co-author of the report, told BBC News that the gloomy forecast was a distinct possibility unless financial markets calmed down and bank lending quickly returned to normal levels. "Day by day, we are getting closer to the pessimistic scenario," he said.