Economists at the Swiss bank UBS have added a further gloomy forecast by announcing that a global recession, led by the United States, is now unavoidable.
Switzerland may dodge the worst of the downturn but UBS still expects gross domestic product (GDP) growth to shrink to 0.2 per cent in 2009 from 1.9 per cent this year.
The forecast states "recession can no longer be avoided" in the US despite efforts by the government to stimulate the financial sector with an emergency cash injection. GDP growth is predicted to hit minus figures in the US and the Eurozone.
Japan's economy will stagnate next year while growth in the Asian giants, such as China, will slow down significantly, the prognosis states.
Germany and Switzerland are expected to fare better, having "avoided excesses in the real estate market and in private consumption". But the Swiss economy will still suffer because of its reliance on the export sector and finance industry, UBS predicts.
The KOF Swiss economic institute has already predicted a mini recession in Switzerland, but Credit Suisse painted a less bleak picture by forecasting one per cent growth in 2009.