Growth in world gross product (WGP) is expected to slow to 1.0 percent in 2009. This would be a sharp deceleration from the rate of 2.5 percent estimated for 2008 and well below the more robust pace in previous years, according to a report by the United Nations Conference on Trade and Development (UNCTAD). While most developed economies are expected to be in a deep recession, a vast majority of developing countries will experience a sharp reversal in the robust growth registered in the period 2002-07, indicating a significant setback in the progress made in poverty reduction for many developing countries over the past few years. Prospects for the Least Developing Countries (LDC), which did so well on average over the past years, will also deteriorate rapidly. Income per capita for the world as a whole is expected to decline in 2009. The report analyses in detail the evolution of the global financial crisis during 2008 and the more fundamental factors that led to its build-up. It further assesses the impact on global economic activity, especially in developing countries. The synchronized slowdown in both rich and poor countries is further evidence that the recently widely held belief that growth in developing countries would have been decoupled from that in the USA and Europe was dangerously misleading. The report also reviews the policy actions so far taken worldwide in response to the global financial crisis. It recommends more forceful fiscal policy stimuli to be taken in an internationally concerted manner in order to prevent the world economy from falling into a much deeper and more prolonged recession. The report further details a number of more fundamental reforms to the international financial system that are needed to reduce risks of a recurrence of such a devastating crisis in the future.