Jan 2017 Financial News

UN forecasts modest recovery

Jan 18, 2017

UNITED NATIONS—The United Nations predicted a modest recovery in the global economy in 2017-18 on Tuesday but warned that its projection is an indication of economic stabilisation rather than a signal of robust revival.

In its annual economic report, the UN said the world economy expanded by just 2.2 per cent in 2016, the slowest rate of growth since the depth of the recent recession in 2009.

It forecast growth of 2.7 per cent this year and 2.9 per cent in 2018, a slight downward revision from its mid-year revisions in May.

“Underpinning the sluggish global economy are the feeble pace of global investment, dwindling world trade growth, flagging productivity growth and heavy levels of debt,” the UN report said. Those factors have been exacerbated by low commodity prices.

As one example, the report noted that world trade volume expanded by just 1.2 per cent in 2016, “the third-lowest rate in the past 30 years.”

The report also cited uncertainties over what changes US President-elect Donald Trump may make on important policies dealing with international trade, immigration and climate change—and what impact Britain’s decision to leave the European Union will have for the free movement of goods and workers in Europe.

“All of these uncertainties have the potential to undermine any projected recovery in business investment, impede international trade growth and even derail the already weak global growth,” the UN warned.

Launching the report, Assistant Secretary-General for Economic Development Lenni Monteil urged countries to redouble efforts “to bring the global economy back on a stronger and more inclusive growth path, and create an international economic environment that is conducive to sustainable development.”

According to the report, developing countries continue to be the main drivers of global growth, expected to account for 60 per cent of the world’s GDP growth from 2016-2018. East Asia and South Asia remain the world’s most dynamic regions, it said.

Source:
Trinidad Guardian, A16
Wednesday January 18, 2017