Global expansion is set to slow to 3.
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7 percent in 2008 amid an unfolding crisis that began in the United States, the International Monetary Fund said in its semiannual World Economic Outlook (WEO) report.
The growth estimate is a half point lower than the January WEO update, it noted.
The US economy, the world's biggest, is likely in a "mild recession" and will stagnate through much of 2009 as housing prices slide further and credit conditions remain difficult.
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For the world economy, there is a 25 percent chance of dropping below three percent growth in 2008 and 2009, which according to the IMF would be the equivalent of a global recession.
"Moreover, growth is projected to remain broadly unchanged in 2009," with growth in the advanced economies likely to fall "well below potential," the 185-nation institution said.
The United States, the epicenter of the turmoil, is poised to grow a paltry 0.5 percent in 2008, the IMF said, despite a multibillion-dollar government stimulus