The US will avoid slipping into recession this year, the International Monetary Fund has predicted.
The aid package being formulated by Congress, coupled with the Federal Reserve's 0.75 per cent interest rate cut, will provide a boost to the economy and prompt a healthier outlook towards the second half of 2008 according to the IMF's forecasts.
Nonetheless, the economic expansion for the US will slow this year to 1.5 per cent from last year's figure of 2.2 per cent, Simon Johnson, economic counsellor at the IMF, said.
A downturn for the US is expected amid a wider slowing of economic growth worldwide, with global expansion this year pegged at 4.1 per cent - down from the previous prediction of 4.9 per cent.
Mr Johnson said: "The five-year long global expansion has begun to moderate in response to the spreading effects of financial disruptions."
In July, the organisation had predicted that 2008 would see the world economy would expand by 5.2 per cent this year.
