Bank of Israel Governor Stanley Fischer painted a stark picture of the global economy saying the world faced an "approaching crisis."
"We have a partial description of the approaching crisis," Fischer said at the Herzliya Conference on Wednesday.
"These are the IMF forecasts – its recent forecasts – that they posted just one week ago. The most interesting thing is that, as for the global economy, the growth forecast is 3.3%," he said.
"When I was at the IMF ten years ago, we were talking about 3.5 for the global economy as the point between normal growth and recession," he said. "This figure [3.3%] is in recession."
Explaining the practical impact, Fischer said, "Buying power is much lower when we talk about exchange rates."
Fischer also noted global pessimism about the ongoing economic crisis faced by nations the world over, adding the US alone had not lowered its forecast for 2012.
However, the Federal Reserve last week announced it had frozen interest rates until 2014 in a bid to stabilize a flagging economic recovery in the United States.
"Another interesting thing when you look at the difference between the September 2011 figures and 2012 is that you will note all of the numbers have a minus sign except one. The one country that hasn't lowered its forecast is the US," Fischer noted.
"This is the situation - this is the forecast for 2012 all over the world - the figures have plunged," he said. "The Eurozone is at -1.6, which is a lowering of the forecast for growth."
"For world trade it’s gone down from 6% to 4% - that is a very big drop. We are very much influenced; there is one figure here that influences all of us - which is the growth rate for world trade."
In conclusion, Fischer said the world was preparing for deeper recession and the shocks of economic crisis.
"If you look at other countries you see the same thing - nearly every country over the last three months has adjusted its forecast downward."