21 May 2014: The UN Department of Economic and Social Affairs (DESA) released an unedited, advance copy of its mid-year update to the ‘World Economic Situation and Social Prospects (WESP) 2014.’ Growth prospects for developing economies and economies in transition have been revised downward by 1.7% while developed economies are expected to continue to recover.

Overall, the global economy is expected to continue to strengthen over the next two years, at 2.8% in 2014 and 3.2% in 2015, according to the mid-year update. This pace of growth is higher than the 2.2% growth experienced in 2013 but still lower than the growth path prior to the 2008 global financial crisis.

“More than five years after the financial crisis, the world continues to struggle with getting the global economic engine back to running at full capacity,” said Pingfan Hong, DESA. “Compared to pre-crisis trends, we have not sufficiently boosted output, trade and employment to their potential levels.” Employment grew by 1.4% in 2013, which is still lower than the rate of 1.7% in the pre-crisis years, according to the International Labour Organization (ILO).

The mid-year update identifies uncertainties for the global economy, including risks associated with geopolitical tensions, domestic and external vulnerabilities of emerging economies, unsustainable public finances in many developed countries and remaining fragilities in the Euro area.

Challenging economic and political situations in several developing economies and economies in transition, including the situation in the Ukraine, have contributed to the revised estimates. Although developing countries will continue to contribute a large proportion of global growth, their growth trajectory is two percentage points lower than pre-crisis levels.

The report recommends: sufficient development financing resources to the least developed countries (LDCs); strengthening international policy coordination to support robust recovery of jobs and output; and cooperation on international financial reforms. “Policymakers need to implement more supportive macroeconomic policies and active labour market policies” to address structural unemployment and other challenges, said Matthias Kempf, the UN’s team leader for the report.

WESP also updated its policy recommendations, the economic outlooks for all world regions of the world, and information on exchange rates, global commodity prices and inflation.

DESA produces the report in cooperation with the UN Conference for Trade and Development (UNCTAD) and the five UN regional commissions. [DESA Press Release] [Publication: World Economic Situation and Prospects 2014: Update as of Mid-2014] [IISD RS Story on WESP 2014]