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Tuesday, February 18, 2020
UNITED NATIONS, Dec 10 2015 (IPS) - The year 2015 has been a challenging year for the growth of the global economy, currently suffering from economic recession, marked by high volatility in financial markets, large capital outflows, lower commodity prices and macroeconomic instability .
Nevertheless, the situation does not look particularly grim, says the annual report –World Economic Situation and Prospect 2016 report (WESP 2016)— released on December 10 by the UN’s Department of Economic and Social Affairs (UN/DESA).
The report has been published in collaboration with the U.N. Conference on Trade and Development (UNCTAD) and the five U.N. regional commissions, plus the World Tourism Organisation (WTO).
According to the report, world commodity prices have fallen by 20.6 percent since July 2014, while global inflation has reached its lowest peak since 2009, and oil prices have dropped by almost 60 percent.
However, future global economy will gear up by 2.9 percent in 2016, and 3.2 percent by 2017, supported by less restrictive fiscal and monetary measures worldwide.Presenting the WESP 2016 report Thursday, Lenni Montiel, Assistant Secretary-General for Economic Development at UN/DESA, said: “Stronger policies and coordinated actions are necessary to ensure an inclusive and sustainable economic growth in order to achieve the 17 Sustainable Development Goals (SDGs) and the U.N. Agenda 2030”.
At the current rate of 2.4 percent, growth in developing and transition countries (those shifting from a central government to a market economy) has slowed down to its weakest pace since the global financial crisis of 2008/2009, notes the report.
Economic growth in China, as well as in Brazil and the Russian Federation will recover slowly in the coming years. Developed countries, instead, will regain momentum in 2016, scoring a growth by over 2 percent (2.2 in 2016 and 2.3 in 2017) for the first time since 2010.
Hamid Rashid, Chief of the Global Economic Monitoring Unit at UN/DESA, said: “[…] Accommodative monetary policies will raise overall investments and economic growth, while guaranteeing adjustments in the commodity sector and prices, and reducing volatility in the financial markets”.
Along with monetary policies, which did most of the heavy-lifting to support growth since the global crisis in 2009, now it is time for active fiscal policies and well-designed labour market strategies to boost economic productivity and re-generate employment, added the report.
Montiel said a direct consequence of a slower global growth – linked in turn to a lower wage growth – is an increasing unemployment rate, which is still very high in many developing and transition economies.
“Job insecurity is often becoming more entrenched amid a shift from salaried work to self-employment,” the U.N. Assistant Secretary-General added.
The current world economic stagnation is also worrying because it may halt the process of poverty reduction towards sustainable development in less developed countries, said Rashid.
Therefore, countries should adopt “policies that can be aligned in a way to promote employment and further investments to reduce inequality and poverty,” he said.
Finally, the UN/DESA report highlights a positive aspect between global economic growth and the global energy carbon emissions.
In 2014, for the first time in the past two decades, the rate of carbon emissions did not experience any growth, which is an achievement—even as it continues as a key issue in the ongoing Paris negotiations on the U.N. Climate Change Convention, (COP21) slated to conclude Friday or over the weekend.
These highlights are also in accordance with the recently published World Energy Outlook 2015 report, on the benefits of renewable energy for environmental sustainability, released by the International Energy Agency.
“Perhaps world countries are accepting the idea that there can be economic growth without necessarily increasing carbon emissions […] It is important for world leaders to realise that the future of our earth is guaranteed,” added Montiel.
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