In its lastest global forecast, the International Monetary Fund (IMF) says the United States' economy will tip into mild recession this year before showing a modest recovery in 2009. Across the world, the IMF said economic growth would slow this year to 3.7%. But the IMF warned that things could turn out worse than its forecast. Andrew Walker reports from Washington.

Officials in the United States, from the president to the Treasury Secretary to the headed of the Federal Reserve have been careful not to say that the US economy is in or head for a recession though they have acknowledged this is a difficult time. Now the IMF says there probably will be a recession in the US this year. The crisis in housing and credit markets is at the root of it. While the IMF is forecasting a recovery next year, its life to be less robust than usual after a recession as banks and other financial firms continue to repair their finances after recent losses on loans that are not being fully repaid.