Advanced economies to shrink for the first time since WWII

Gloomy forecasts from the IMF today: Developed economies will shrink by 0.3 percent next year, the first collective contraction since 1945.

More analysis from the WSJ's economics blog:

The U.S. forecast was cut to 1.4% growth this year and a 0.7% contraction in 2009, down from last month’s estimates for growth rates of 1.6% in 2008 and 0.1% in 2009.

The euro area is expected to grow 1.2% this year and contract 0.5% next, compared with the previous forecast for growth of 1.3% in 2008 and 0.2% in 2009.

Japan’s estimate was trimmed to 0.5% growth this year and a 0.2% contraction next, compared with the previous estimate for growth of 0.7% in 2008 and 0.5% in 2009.

Forecasts for emerging and developing economies were adjusted even more sharply, with the 2008 growth estimate falling to 6.6% from 6.9% and the 2009 forecast dropping to 5.1% from 6.1%.