24 January 2019
WESP Suggests Economic Growth Has Peaked, Uneven Progress Continuing
Photo by Peter Berko
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The UN Secretary-General said WESP 2019 “raises concerns over the sustainability of global economic growth in the face of rising financial, social and environmental challenges”.

WESP 2019 identifies rising inequalities, conflict and climate change as key challenges to achieving the SDGs.

21 January 2019: The UN’s World Economic Situation and Prospects (WESP) report predicts the global economy will grow by 3% in 2019 and 2020, but suggests there are “signs that growth has peaked.” The 2019 report also highlights uneven progress among countries, with anticipated declines in Central, Southern and West Africa, Western Asia and Latin America and the Caribbean, and rural areas being left behind urban areas. The UN Department of Economic and Social Affairs (DESA) produces the report annually.

WESP 2019 finds that over half of the world’s economies experienced accelerated growth in 2017 and 2018. Developed economies grew at 2.2% in both 2017 and 2018 and experienced declining unemployment rates. Among the EU, Poland’s economy grew by 5% in 2018, the most of any EU country, with France, Germany and the UK experiencing growth rates under 2%. East Asia grew at 5.8% in 2018, and South Asia grew at 5.6% in 2018. Commodity-exporting countries, particularly fuel-rich emerging nations, continued a “gradual recovery.”

UN Secretary-General António Guterres cautioned that the “largely favorable” global economic indicators “do not tell the whole story.” He said the WESP 2019 “raises concerns over the sustainability of global economic growth in the face of rising financial, social and environmental challenges.”

To eradicate poverty by 2030, the report observes “dramatic shifts” will be needed in countries where poverty rates remain high, including steep reductions in income inequality and accelerations in economic growth. For example, the report finds Africa will need to experience “double-digit growth” along with “steep reductions in unequal pay levels.” The report calls for improving the quality of education and broadening access to education to address high levels of inequality and support progress on the SDGs. The report further recommend expanding social protection and prioritizing rural infrastructure development through public investment in agriculture, energy and transport, to support poverty alleviation, narrow the rural-urban divide and achieve the SDGs.

Also on the SDGs, the report observes that countries’ pace of progress “has not been rapid enough to keep up with the ambitions of the Agenda.” WESP 2019 identifies rising inequalities, conflict and climate change as key challenges. Many of the SDGs that will be reviewed at the July 2019 session of the UN High-level Political Forum on Sustainable Development (HLPF) are “strongly linked to the current macroeconomic conditions,” including SDG 8 (decent work and economic growth), SDG 10 (reduced inequalities), SDG 13 (climate action) and SDG 17 (partnerships for the Goals). WESP 2019 highlights international trade as a way forward, explaining that it provides crucial means of implementation (MOI) for the 2030 Agenda, and argues that trade integration can serve as a driver for progress.

On climate change, the authors find that climate risks are intensifying, and express concern that the transition to environmentally sustainable production and consumption “is not happening fast enough,” allowing carbon emissions to rise and causing accelerated climate change. WESP 2019 calls for integrating the negative climate risks associated from emissions through carbon pricing, energy efficiency regulations and reduction of fossil fuel subsidies. The report further recommends that governments promote policies to stimulate energy-saving technologies and economic diversification.

The report further underscores the importance of international cooperation to minimize and avoid risks, such as those from climate change, and to support achievement of the 2030 Agenda. UN Chief Economist Elliott Harris said previously viewed “long-term challenges, such as climate change, have become immediate short-term risks” and emphasized that the report identifies strengthening global cooperation as key to advancing sustainable development.

The 2019 WESP report also addresses US-China trade relations, the implications of Brexit and financial instabilities related to debt servicing. [Publication: World Economic Situation and Prospects 2019] [UN News Story] [DESA Press Release] [Launch Event] [UNECE Press Release]

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