The UN Department of Economic and Social Affairs (DESA) has launched the latest edition of ‘World Economic Situation and Prospects.' The 2014 report finds that global economic growth is improving but remains vulnerable, and recommends strengthening international policy coordination to promote stronger recovery and ensure sufficient resources for developing countries, as well as “countries that face large financing needs for sustainable development and poverty reduction."
18 December 2013: The UN Department of Economic and Social Affairs (DESA) has launched the latest edition of ‘World Economic Situation and Prospects.’ The 2014 report finds that global economic growth is improving but remains vulnerable, and recommends strengthening international policy coordination to promote stronger recovery and ensure sufficient resources for developing countries, as well as “countries that face large financing needs for sustainable development and poverty reduction.”
The global economy is anticipated to grow at 3% in 2014 and 3.3% in 2015, compared with an estimated 2.1% growth rate in 2013. Improvements in the last quarter of 2013, including the end of the Eurozone recession, strengthened US growth and slowly increasing growth in China and India, contributing to a forecast for increasing global growth. The report also predicts: more moderate inflation; continued employment challenges; flat commodity prices; moderately increasing international trade; and more volatile international capital flows.
Noting that Official Development Assistance (ODA) has declined over the past two years, the report recommends that international donors deliver on existing commitments, stressing that these resources are “greatly needed” to accelerate progress towards the Millennium Development Goals (MDGs) and build a solid foundation for sustainable development beyond 2015.
Africa’s growth is expected to expand by 4.7%, although this will depend on improvements in economic governance and management, and infrastructure and trade investments. Brazil, China and India experienced slow growth but are expected to experience steady or improved growth in 2014. The Russian Federation experienced weakened growth and is expected to recover modestly to 2.9%. Latin America and the Caribbean (LARC) are expected to improve 3.6% in 2013. Growth in Mexico and Central America is also predicted to increase.
Least Developed Countries (LDCs) overall are expected to grow by 3.2% in 2014 and 2015, which the report says will result in “only a limited impact on living standards, given the widespread levels of poverty.” Among the developed economies, Western Europe is predicted to increase 1.4%, Japan is expected to grow by 1.5% and the US is expected to increase 2.5%.
Risks and uncertainties that threaten the global economy include: unwinding of quantitative easing; vulnerability of emerging economies to external shocks; fragile banking systems and economies in the EU; US debt ceiling negotiations; and Western Asia geopolitical tensions.
Shamshad Akhtar, DESA, noted that high unemployment levels disproportionately impact youth and vulnerable populations. Youth unemployment is more than 50% in Greece and Spain, according to WESP.
DESA, the UN Conference on Trade and Development (UNCTAD) and the five UN regional commissions produce the annual WESP. The full version and detailed regional forecasts will be available on 20 January 2014. [DESA Press Release] [WESP Website] [Statement of Shamshad Akhtar] [Publication: World Economic Situation and Prospects 2014: Chapter 1: Global Economic Outlook] [Press Conference to Launch Report]