The International Monetary Fund added to Gordon Brown's woes last night when it warned Britain will be at the bottom of the league table of major developed countries this year, in the weakest year for the global economy since the second world war.

After seeing activity collapse in every continent over the past three months, the Washington-based fund said it expected the UK economy to contract by 2.8% this year – its worst single-year performance since the Great Depression of the 1930s.

The IMF said Britain would be especially hard-hit by a slump in the west that would see a 2.5% contraction in ­Germany, a 2.6% drop in output in Japan and a 1.6% retrenchment in the US.

Developed nations would suffer a recession as severe as those of the mid-1970s and early 1980s, and for the first time in the post-war era collectively suffer a year of falling output.

A separate report yesterday from the International Labour Organisation said a worsening economy could see 50 million more people out of work worldwide as a result of the financial and economic crisis that began in 2007.

Brown was forced to admit for the first time yesterday that the UK is in "a deep recession", sounding a very different note from his claims in the autumn that Britain was better prepared than other countries to resist the downturn.

The forecasts from the two organisations came as business leaders gathered in sombre mood for the annual meeting of the World Economic Forum in Davos.

News International chief Rupert ­Murdoch told delegates the crisis was getting worse: "It's going to take drastic action to turn it around, if it can be turned around quickly. I believe it will take some time. We've been living in the western world way above our means. We've been on a great binge and it's come to an end; and we have to live though the correction."

Howard Davies, director of the London School of Economics, said: "People in the UK and the US are going to get poorer. They will have to spend less than their income for a while."

No 10 resisted claims that the IMF report showed Britain was going to fare worse than all other large economies, pointing out that Japan and Italy were predicted to do worse than Britain over the full 2008 to 2010 forecasting period.

The IMF highlighted the rising risk of deflation and said there were signs of a "pernicious feedback loop" between the crisis-stricken financial markets and the real economy, as it cut its global growth forecast from the 2.2% forecast two months ago to 0.5%.

Although growth in the rest of the world is also expected to slow sharply, the fund said expansion in China and India would spare the global economy as a whole from shrinking this year.

For the UK, the IMF said it was revising down its growth forecast from -1.3% to -2.8%, and had also become gloomier about the prospects of recovery in 2010.

With the government obliged to call a general election by the spring of 2010, ministers have been hoping that the economy will bounce back from the middle of this year to record growth of around 1.75% next year. The IMF said it expected the UK to register virtually no growth at all in 2010, with GDP expanding by 0.2%.

Alistair Darling will present updated Treasury forecasts for the economy in his spring budget, but the chancellor is already reconciled to revising down his prospects for the UK.

George Osborne, the shadow chancellor, said: "Gordon Brown cannot answer the simplest question of all: if Britain is well prepared, as he claims, why are we facing the worst recession in the world?"