Warning that the world Economy is now ‘teetering on the brink of a severe global downturn’, the United Nations said it expects growth in 2008 to be sharply lower at 1.8 per cent - nearly half of the 3.4 per cent growth estimated only three months ago.

A new report released on Thursday predicts that slowdown will be in all regions, with South and East Asia facing a major downturn where the growth would decline to about 8.5 per cent in 2008 from 11 per cent in 2007.

India, it says, too would face a slowdown. UN said world economic growth next year would, however, be better at 2.1 per cent. The global Economy expanded by 3.8 per cent in 2007.

To boost the global Economy, the report calls for an internationally coordinated economic stimulus package to support US efforts, centred on the expansion of domestic demand in countries with savings surpluses especially in Europe, the Arabian Gulf and East Asia.

Releasing the new report, the economists said the global Economy has been adversely impact and still threatened by deepening credit crisis in affluent countries triggered by the continuing housing slump, the declining value of the United States dollar, persisting global imbalances and soaring oil and commodity prices.

The unfolding global food crisis, the report warns, is not only a grave humanitarian issue but also a threat to political and social stability in some developing countries and may reverse some of the progress made towards the MDGs, a list of targets set by world leaders to sharply reduce or eliminate several social and economic ills.