The World Economic Situation and Prospects 2018 finds widespread improvement in the global economy in 2017.
The report highlights the importance of addressing the impact of growth on environmental degradation and building resilience against climate change.
The report recommends policy reorientation focus on four areas: increasing economic diversification; reducing inequality; tackling institutional deficiencies; and strengthening financial architecture.
12 December 2017: The World Economic Situation and Prospects (WESP) 2018 finds that global economic growth has increased by three percent, and suggests that policymakers take the opportunity to readjust policies towards long-term issues that have hindered progress towards the SDGs, including by removing obstacles to development and tackling climate change and inequalities.
WESP 2018 finds widespread improvement in the global economy in 2017, with two-thirds of countries experiencing stronger growth in 2017 than in 2016. According to the report, East and South Asia remain the world’s most dynamic regions, and improvements in Argentina, Brazil, Nigeria and the Russian Federation account for approximately one-third of global growth. WESP predicts that global economic growth will remain steady at three percent in 2018 and 2019.
Still, the report cautions that economic improvements have been unevenly distributed across regions and countries. Parts of Africa, Western Asia and Latin America and the Caribbean are expected to experience “negligible” per capita income growth through 2019. WESP warns that failure to address long-term structural issues in these countries will hinder progress on sustainable development, poverty eradication and job creation, and could “leave a quarter of the population of Africa in extreme poverty by 2030.”
The report finds that very few of the least developed countries (LDCs) are expected to achieve SDG target 8.1 (gross domestic product (GDP) growth of at least 7%). The report explains that institutional deficiencies, inadequate basic infrastructure, increased exposure levels of natural disasters, political instability and security challenges have had a negative impact on LDCs’ progress. The authors recommend a focus on conflict prevention and removing barriers to progress, in addition to financial resource mobilization to meet LDCs’ investment needs. The report further recommends creating a new financial framework for sustainable finance that is aligned with the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda (AAAA) on financing for development (FfD), with the broader aim of shifting from short-term profit to long-term value creation.
The report recommends a policy reorientation focus on four areas: increasing economic diversification; reducing inequality; tackling institutional deficiencies; and strengthening financial architecture. According to the authors, addressing these challenges can contribute to strengthened investment and productivity, more sustainable medium-term economic growth and higher job creation.
Emissions from international shipping and aviation are growing fast, but do not fall under the purview of the Paris Agreement.
On climate change, preliminary WESP estimates suggest that in 2017, global energy-related carbon dioxide (CO2) emissions increased, after remaining constant for three years. UN Under-Secretary-General for Economic and Social Affairs Liu Zhenmin cautioned that these estimates underscore that the upturn in global growth “may come at an environmental cost.” Liu called for stronger efforts to delink economic growth and environmental degradation. For example, the report observes that emissions from international shipping and aviation have grown faster than emissions from road transport in the past 25 years, and these two sectors do not fall under the purview of the Paris Agreement on climate change.
On renewable energy, the report finds that renewables provide approximately 11% of global power generation. China remains the largest global investor in renewables. Other trends highlighted in the report include: improved investment conditions alongside rising debt levels; and a “rebound” in world trade amidst concern about protectionist tendencies and potential escalation in trader barriers and disputes.
The report is a joint product of the UN Department of Economic and Social Affairs (DESA), the UN Conference on Trade and Development (UNCTAD) and the five UN regional commissions: Economic Commission for Africa (ECA), Economic Commission for Europe (ECE), Economic Commission for Latin America and the Caribbean (ECLAC), Economic and Social Commission for Asia and the Pacific (ESCAP) and Economic and Social Commission for Western Asia (ESCWA). DESA hosted a live launch and a Facebook live interview with the report’s lead author on the occasion of the launch. [UN Press Release] [UN DESA Press Release] [ESCAP Press Release] [WESP Webpage] [WESP 2018 Executive Summary]