Good news is a scarce commodity on investment markets these days.

But this week's report card from the International Monetary Fund on the global economy and its forecasts of economic growth offer some interesting insights into the scale of the impact of the turmoil of the financial crisis on real world economies as measured by gross domestic product.

One of the big concerns of recent market events is that the major shocks that the global financial system is reeling from will - to use the US analogy - transfer from Wall Street to main street.

Now given all the gloom and doom about credit and equity markets in the US it may be a surprise that the IMF is forecasting that even with the subprime mortgage collapse and its subsequent ripple effects the US economy is tipped to narrowly miss dipping into recession. The IMF is forecasting GDP growth in the US next year of 0.1%. That is hardly dynamic growth or signaling a sprint-like recovery but given the daily dramas played out on Wall St most people would probably have said the US is already in recession and the real question is how deep a recession it will be.

The caveat that some of the world's leading economic minds have put on that forecast is that the emergency measures put in place by governments in the US and Europe and our own Reserve Bank's interest cut this week succeed in restoring confidence in the financial system.

Whether the US does dip into recession is moot but the IMF forecasts underline the separation between the financial and the non-financial markets. Clearly main street - the non-financial economy - is doing its bit to cover the Wall St malaise.

The good news for the Australian economy is two-fold: For a start our economic growth is predicted to be 2.2% in 2009 - subdued compared to recent years admittedly but way better than our American cousins and most of western Europe.
So the old, developed world is expected to do it tough for the next year or two. But let's look at some of the developing countries.

China is of course the obvious first point of reference and the IMF is predicting lower growth for this emerging economic colossus but that sees economic growth pegged back to 9.3% (down from 9.7%).

There is a new axis of economies emerging on the world economic stage - the so-called BRIC countries (Brazil, Russia, India and China).

According to the IMF while these emerging economies are certainly not immune from the global financial crisis the forecast growth is robust and looks downright rosy compared to the so-called "developed" economies.

The IMF is predicting economic growth for India of 6.9%, Russia 5.5% and Brazil at 3.5%.

Now that is not going to be enough to offset the impact of the developed economies slowing dramatically. And while there has been much discussion about "decoupling" of economies like ours from the US impact the reality is that there is no such thing in these days of globalisation.

Indeed the IMF says world economic growth in total is decelerating fast and expects the recovery to be "unusually protracted" as financial markets continue to "deleverage". In plain language that means we have to get the toxic debt that was built up in the financial system out - a process that is well underway - while restoring confidence in the financial system is developing as the biggest challenge for regulators and governments around the world.

As a result the IMF has downgraded its growth forecast for world output to 3% - which is down from 5% in 2007.

The IMF is forecasting world economic growth will continue to slow for the rest of this year and the first half of next year before beginning a gradual recovery later in 2009.

Australia cannot expect to be immune from that slowdown - slower world economic growth means weaker demand for commodities - but the good news is that we are better placed than many other developed countries to weather the storm.