"There is a reasonable probability ... of the U.S. economy starting to recover at the end of 2009 or the start of 2010," the IMF Managing Director Dominique Strauss-Kahn said in a newspaper interview on Thursday.

The global economy could fall into prolonged crisis, spreading social unrest unless governments expand and implement promised stimulus packages, the IMF Managing Director Dominique Strauss-Kahn said on Monday.

A Taiwanese jetliner departed Monday for China to open a new era of direct air and shipping services with the mainland, formally ending a nearly six-decade ban on regular links between the rivals.

The US Government must create strategies to eventually dilute its involvement with private enterprise, Chairman of the Securities Exchange Commission Christopher Cox said in the Wall Street Journal.

In a report assessing economic prospects, World Bank has predicted that the world's annual economic growth will slow to 0.9%, from 2.5% this year.

Chinese and European leaders plotted their next steps as investors looked to governments to lead major economies out of recession because central banks could start running out of room to cut interest rates further.

The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy. The last two recessions (1990-1991 and 2001) lasted eight months each, and only two of the 10 previous post-Depression downturns lasted as long as a full year, according to the NBER. The current recession is one of the longest downturns since the Great Depression of the 1930's.

"There is no denying that fundamental weakness in demand is turning from bad to worse," Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said in a report today. The outlook for manufacturers in the coming months "will not be a pretty picture."

The United States government should not worry about deficits over the next two years while spending money to jumpstart the ailing economy, President-elect Barack Obama said in a television interview that aired on Sunday. "The consensus is this, that we have to do whatever it takes to get this economy moving again, that we have to -- we're going to have to spend money now to stimulate the economy."

The Paris-based body has forecast a fall in US economic activity of 0.9% in 2009, with the Euro area contracting by 0.5% and Japan by 0.1%. Economic growth in the 30 countries of the OECD is forecast to fall by 0.3%, before growing by 1.5% in 2010.

Recession has hit much of Europe, data showed on Friday, confirming a widespread economic downturn that world leaders hope to tackle at a weekend summit in Washington. British Prime Minister Gordon Brown called for more coordinated measures to spur economic growth, a policy area where there may be more consensus.

"The downturn trend in our economy is more obvious, especially since September. We hope a rapid downturn in growth will not occur," said Mu Hong, a deputy chairman of the nation's main planning agency. Beijing is moving quickly to launch the package and will distribute most of a planned 100 billion yuan ($15 billion) in additional government spending within the next two weeks. The plan calls for higher spending on infrastructure and social programs in an effort to spur domestic consumer spending and reduce reliance on exports.

Chinese leaders are alarmed at a sharp drop in economic growth, which fell to 9 percent in the most recent quarter. That is the highest for any major economy, but below last year's 11.9 percent and dangerously slow for a government that needs robust growth to satisfy a public that has come to expect steadily rising incomes. "The global financial crisis has had a considerable impact on China's export growth, which will continue to show weakness with recession in the US and Europe," ...

The world economy will expand 4.1% this year, faster than the 3.7% pace projected in April, the fund said in a report released in Washington. The IMF raised growth forecasts for six of the Group of Seven industrial nations, with only Canada's economy downgraded. The outlooks for China, Brazil, Russia and India were also lifted.

While the rest of the world is gearing up to fight inflation, the US Federal Reserve seems sidelined by the puny American economy. The Federal Reserve kept its key federal funds rate at 2.0% after having lowered it at each of its last seven meetings, stretching back to September, when the rate was 5.25%. But easy money brings inflation, and with the rate so close to zero, the central bank has little scope to cut any further, regardless of slow economic growth.

..."We see further upward pressure on headline inflation that could be too much for the central bank's comfort," said Tony Phoo, an economist at Standard Chartered Bank in Taipei. "We now expect the CBC to hike 12.5 basis points to 3.625 percent in June and another 12.5 basis-point rise in September."

The U.S. economy "remained generally weak" in May as higher prices for food and energy were pinching consumers' pocketbooks, the Federal Reserve said Wednesday in its Beige Book report on the economy. The economy in seven of 12 regions was described as weak or soft, while five regional Fed banks - Atlanta, Cleveland, Philadelphia, St. Louis and San Francisco -- reported the economy was stable in their area.