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WASHINGTON, May 26 (Reuters) - The recession in Switzerland will deepen as the global economic downturn takes a toll on exports and financial sector inflows, the International Monetary Fund forecast on Tuesday, and it urged the Swiss to consider a further stimulus package next year.
The IMF forecast the Swiss economy will shrink 3.0 percent this year after contracting 1.6 percent in 2008, and it said Swiss consumers are likely to scale back spending as the recession hurts job prospects.
"Given Switzerland's openness and the size of its financial sector, the economy is projected to experience a significant contraction in the near-term, with sizable downside risks to the outlook," the IMF said in its annual review of the Swiss economy.
Persistent financial sector turmoil may require further policy actions, the IMF said, and called for a further stimulus package in 2010 to spur the economy.
The IMF said the recent decision to cut interest rates, including intervention in the foreign exchange market, "reflected limited options to further influence monetary conditions and counter deflation risks." (Reporting by Lesley Wroughton; Editing by Leslie Adler)