ZURICH - THE financial crisis will most probably tip the world economy into recession, economists at Swiss bank UBS forecast on Wednesday, saying the United States faced four quarters of contracting output and that a recession in Europe was 'inevitable'.

The said: 'The distinct escalation of the global financial and credit market crisis since September has caused UBS economists to again revise their already cautious economic forecasts downwards.' The US is forecast to experience at least four quarters of contracting economic output from the middle of this year.

Meanwhile, Europe is expected to slip into recession 'almost in synch (synchronisation) with the US,' with a 'dramatic' downturn forecast for countries that have overvalued real estate markets such as Britain and Spain.

The slowdown is also spreading to Asia, with Japan facing stagnation, the economists said.

Asian giants China, India or Indonesia, however, are seen faring better as they have a smaller export ratio compared to smaller Asian economies, many of are more reliant on exports. -- AFP