A significant slowdown in world economic growth appears ?inevitable?, the International Monetary Fund said yesterday, as it welcomed the US Federal Reserve?s decision to cut its main interest rate as ?appropriate and helpful?.

?A significant 2008 slowing in the global expansion already appears inevitable, and downside risks still predominate,? Masood Ahmed, Director of External Relations of The Fund, said in a Statement.

?The United States has been most affected by recent economic and financial developments. Thus, the 75-basis point reduction in the Federal funds rate was appropriate and helpful,? he said.

With global markets experiencing a meltdown amid fears of a US recession, the Federal Reserve had on Tuesday cut its key short-term interest rate by 75 basis points in a move aimed at steadying the world's biggest economy. Ahmed asked the Federal Reserve to apply targeted and timely fiscal measures to boost near-term demand.

?Financial market prices are consistent at present with expectations of significant future rate declines. In any case, there is no doubt that the Federal Reserve will respond with alacrity to new fundamental and financial developments. In addition, targeted and timely fiscal measures could provide near-term support for demand,? he added.

CONSEQUENCES

US recession could drag oil to $70

■ A major recession in the United States could drag oil prices down by at least 20 % and strong oil demand growth in China, India and the Middle East will not be able to make up the demand shortfall, a top Indian oil official said on Wednesday.?If there is a serious economic recession, prices could tumble to $70,? Indian Petroleum Secretary M.S. Srinivasan told ?Reuters? in an interview. Srinivasan, the senior-most official in India?s petroleum and natural gas ministry, said expectations in some quarters that oil demand will hold up despite a US recession because of demand growth in Asia and the Middle East were far-fetched. ?A US demand recession will have a huge impact on overall crude demand. Suppose US demand falls by 10 % ? any serious recession will impact demand by at least 10 % ?- it will be a huge impact on the overall crude surplus availability and the slack availability,? he said.Srinivasan said the United States consumed around 28 % of all the oil produced in the world ?- and a 10 % fall in demand there would equal all of India's current consumption at 3 % of global demand.