THE World Bank has broken a taboo, becoming the first official organisation to predict the global economy will shrink during 2009, to collapse for the first time in more than 60 years.

A previous forecast from the International Monetary Fund predicted global growth of just 0.5 per cent this year, something it described as a recession but "still positive".

Melbourne in 2009 and in 1945 - feeling the flak from Asia. Digital Image: Mick Connolly.

The new World Bank assessment, prepared for next week's meeting of finance ministers and treasurers from the world's 20 largest economies, was not specific about the extent of the collapse other than to say that global economic activity would shrink "for the first time since World War II, with growth at least 5 percentage points below potential".

Global industrial production would be down 15 per cent by the middle of this year, with world trade on track to record its largest decline in 80 years.