UPDATE 1-IMF: lower China growth, unprecedented slowdown

(Adds background, quotes)

MADRID, Dec 15 (Reuters) - The IMF could cut its forecast for Chinese 2009 economic growth to around 5 percent in its next revision as the global economy suffers an unprecedented slowdown, IMF Managing Director Dominique Strauss-Kahn said on Monday.

In its last forecast released in November, the International Monetary Fund had predicted that China's growth would fall to 8.5 percent in 2009 from 9.7 percent this year. November's forecast for 2009 was 0.8 percentage points lower than the IMF's previous forecast.

"We started with China at 11 pct growth, then 8, then 7 then China will probably grow at 5 or 6 percent. The possibility of a global recession is real, we realize something must be done," " said Strauss-Kahn during a conference in the Spanish capital.

"We are facing an unprecedented decline in output and we have evidence of substantial uncertainty limiting the effectiveness of some fiscal policy measures," he said.

"We anticipate that the gross effect will last some time. We need large and diversified stimulus support that will last longer than one or two quarters."

"An adequate level will be around 2 percent of (world) GDP -- $1.2 trillion -- and this may make a sizeable difference and reduce the risk of a damaging global recession," he said.

"The good news, with some exceptions, maybe a lot of exceptions, we can see the beginning of the recovery end of 2009, beginning of 2010, but there are a lot of downside risks," he added. (Reporting by Andrew Hay; Editing by Jason Webb and Christian Lowe)