WASHINGTON (MarketWatch) -- There will not be a quick exit from the global recession, despite some encouraging signs in the past few weeks, according to the International Monetary Fund's latest forecast released Wednesday.

""The synchronized nature of the global downturn tends to weigh against prospects for a speedy turnaround,"" the IMF said in its latest World Economic Outlook. Read more.
Global economic activity is now projected to decline 1.3% in 2009, by far the deepest recession since World War II. The IMF lowered its projections for every region and individual country since the previous report released in January.
""This is not the time for complacency, and the need for strong policies, on both the macro and especially on the financial fronts, is as acute as ever,"" said Olivier Blanchard, chief economist for the IMF. ""But, with such policies in place, there is light at the end of this long tunnel. World growth can turn positive by the end of this year, and unemployment can start decreasing by the end of next year.""
Economic difficulties in Europe and over-borrowing by Eastern European nations are now the most critical problems facing the global economy.
""The euro area will experience an even deeper decline in activity than the United States as the sharp contraction in export sectors increasingly curtails domestic demand against the backdrop of financial stress and housing corrections in some national markets,"" the report concluded.
""Emerging"" Europe, which includes the Baltic region and Eastern Europe, now faces a situation similar to the one that existed prior to the Asian financial crisis.
Banks have been a dominant source of lending to this region and could start to cut exposures, and rollover rates for maturing short-term credits could fall sharply.
So far, this hasn't happened, but ""the situation could shift quickly as conditions deteriorate,"" the IMF said.
Financial market stabilization will take longer than expected. Financial strains will last until next year, the report concluded.