The International Monetary Fund (IMF) predicts Australia’s economy will contract 1.4 percent this year, as unemployment continues to rise. It has drastically downgraded its outlook for the Australian economy, and has predicted unemployment will rise to as much as 6.8 percent this year and 7.8 percent next year. The IMF’s latest World Economic Outlook has predicted a dire outcome, not just for Australia, but the world, with the global economy predicted to shrink by 1.3 percent. There is bad news across the board with the US economy expected to slide by almost three percent, and the Japanese economy to drop by six percent in 2009. The UK’s economy will contract by 4.1 percent, while China and India are set to grow by 6.5 percent and 4.5 percent respectively. The forecasters have warned that as the global recession deepens, recovery will be slower.