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CORRECTED - UPDATE 1-Global economy to contract 0.6% in 2009-IMF aide

Published 03/17/2009, 11:16 AM

(Corrects spelling of Strauss-Kahn in fifth paragraph))

LISBON, March 17 (Reuters) - The International Monetary Fund expects the global economy to contract 0.6 percent this year, according to forecasts provided on Tuesday by an IMF official.

Teresa Ter-Minassian, an adviser to IMF Managing Director Dominique Strauss-Kahn, told reporters the figure was likely to be released shortly by the IMF. It compares with the IMF's last official forecast for the global economy, released in January, which pointed to global growth of 0.5 percent.

The U.S. economy is seen shrinking 2.6 percent this year, compared with a January forecast of a 1.6 percent contraction. The euro zone economy is expected to contract 3.2 percent, down from January's forecast of a 2 percent decline.

Japan's economy was seen diving 5 percent this year, sharply down from the last forecast of a 2.6 percent contraction.

Until now, all the IMF has said is that it expects global economic output to be "below zero" and Strauss-Kahn has called the current slowdown the "Great Recession".

"The scenario will be worse, but the managing director has already said this," Ter-Minassian said at a conference in Lisbon. "This is a true global crisis, impacting all parts of the world and countries at different levels of development."

The IMF's next official forecasts for the world economy will be released before the IMF and World Bank meetings in Washington on April 24 and 25.

Following are a breakdown of forecasts provided by the official:

2009 2010

Global economy -0.6 2.3

United States -2.6 0.2

Euro zone -3.2 0.1

Japan -5.0 0.0

United Kingdom -3.8 -0.2

Canada -2.0 1.2

G7 -3.2 0.2

Asia 3.6 5.8

Latin America -0.6 2.3

(For details of IMF's January forecasts please double click on [ID:nN28509162]) (Reporting by Sergio Goncalves; writing by Axel Bugge; editing by David Stamp)

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