WASHINGTON (AFP) - The International Monetary Fund said Wednesday that the global economy was sinking in a maelstrom of financial turmoil, and faces a painful crawl toward recovery in 2009. "The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s," the IMF said in its biannual World Economic Outlook (WEO) report. The IMF revised downward its July forecasts for global economic growth to 3.9 percent in 2008 and 3.0 percent in 2009, the slowest pace since 2002. The markdowns shaved off 0.2 percentage point and a hefty 0.9 point, respectively. "The major advanced economies are already in or close to recession, and, although a recovery is projected to take hold progressively in 2009, the pickup is likely to be unusually gradual, held back by continued financial market deleveraging," the 185-nation institution said. The WEO forecasts were released hours after the Federal Reserve and five other central banks staged coordinated cuts in interest rates to boost ecoomic growth and jump-start credit flows. The IMF said that emerging and developing economies were also slowing, and in many cases to rates well below trend. "The immediate policy challenge is to stabilize financial conditions, while nursing economies through a period of slow activity and keeping inflation under control," the IMF said. In the IMF Global Financial Stability Report, released Tuesday, economists said data showed that downturns preceded by banking turmoil usually are deeper and more enduring than those that follow stress in other areas of the economy. The IMF warned its October WEO growth projections for 2009 came "against an exceptionally uncertain background ... and the outlook is subject to considerable downside risks." The United States, the epicenter of a financial crisis that erupted in August 2007 after the collapse of the subprime mortgage market, appeared to be sinking into a recession, it said. Buffeted by the worst housing slump in decades and the credit crunch, the US was now poised to expand 1.6 percent this year and a bare 0.1 percent in 2009. That was an increase of 0.3 points and a decrease of 0.7 points, respectively from the prior forecast just three months ago, in which the IMF had hiked its April WEO forecasts, citing improving economic conditions. The IMF said advanced economies were marked to grow 1.5 percent this year and 0.5 percent in 2009. In Japan, growth in the second-largest economy this year was forecast at 0.7 percent, down 0.8 point, and would slow to 0.5 percent in 2009, down a full point. Gross domestic product (GDP) growth in the 15-nation eurozone was seen at 1.3 percent this year and 0.2 percent in the next, down 0.4 and 1.0 points. Two eurozone economies were set to contract: Italy, both this year and next, and Spain, in 2009. Britain, whose economy depends heavily on financial services, was marked for for a 0.1 percent contraction in 2009, after growth of 1.0 percent in 2008. China will continue to lead growth in major emerging economies, the engines of global growth in recent years, at a pace of 9.7 percent in 2008, unchanged from the prior update, and 9.3 percent in 2009, down 0.5 point. The latest WEO growth forecasts came against a backdrop of violent financial market turmoil as the near-freezing of credit flows threatens to strangle economies worldwide. Authorities have taken drastic measures to ease credit, including pouring hundreds of billions of dollars into the global banking system, bailing out floundering financial firms and in some cases nationalizing them. But despite such steps, the deepening turmoil has triggered a crisis of confidence that experts warn will be difficult to shake. The IMF said the crisis entered a "tumultuous" new phase in September "that has badly shaken confidence in global financial institutions and markets." "Most dramatically, intensifying solvency concerns have triggered a cascading series of bankruptcies, forced mergers, and public interventions in the United States and western Europe, which has resulted in a drastic reshaping of the financial landscape." As the deleveraging slowly unwinds, financial institutions' ability to raise new capital "will remain very challenged ... implying that limits on the pace of credit creation " and on activity " will be present at least through 2009." The IMF forecast three factors would lay the groundwork for the gradual recovery in 2009: the stabilization of commodity prices, although at 20-year highs; a bottoming out of home price declines in the worst US housing slump in decades; and the resiliency of emerging economies "benefiting from strong productivity growth and improved policy frameworks."