WASHINGTON, Jan 28 (Reuters) - The International Monetary Fund on Wednesday slashed its forecast for world economic growth, warning that deflation risks were rising and saying toxic assets need to be removed from the banking system.
It cut its forecast for global growth in 2009 to a slight 0.5 percent -- the weakest since World War II -- from a November estimate of 2.2 percent.
The outlook was even worse for advanced countries like the United States and the euro area, whose economies are seen contracting by 1.6 percent and 2 percent, respectively.
The IMF said emerging market economies would be the only source of growth, expanding 3.3 percent in 2009 and 5 percent next year, but those forecasts as well were below projections made less than three months ago. (Reporting by Lesley Wroughton; Editing by Andrea Ricci)