A modest global recovery is projected for 2017-18 should be seen as more of an indication of economic stabilization than a signal of a robust and sustained revival of global demand, a new United Nations economic report has found.
According to the UN flagship World Economic Situation Prospects 2017 report (WESP), the world economy expanded by just 2.2 per cent in 2016, the slowest rate of growth since the 2009 global recession. World gross product is projected to grow by 2.7 per cent in 2017 and 2.9 per cent in 2018, a slight downward revision from the forecasts made last May.
It notes that while developing countries continue to be the main drivers of global growth, accounting for about 60 per cent of the world’s gross product growth in 2016-18, Gross Domestic Product (GDP) growth in least developed countries is anticipated to remain well below the Sustainable Development Goal 8 (SDG8) on promotion of sustained, inclusive and sustainable economic growth target of at least seven per cent (target 8.1).
“Under the current growth trajectory and assuming no decline in income inequality, nearly 35 per cent of the population in [least developed countries] may remain in extreme poverty by 2030,” read a news release today announcing the report.
Further, noting the urgency of efforts rectify the situation, Lenni Montiel, Assistant Secretary-General for Economic Development at the UN Department of Economic and Social Affairs (DESA) called for “redoubling the efforts to bring the global economy back on a stronger and more inclusive growth path and create an international economic environment that is conducive to sustainable development.”
DESA, together with UN Conference on Trade and Development (UNCTAD), the World Tourism Organisation (UNWTO) 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), authored the report.
The report noted that many economies had experienced a marked downturn in private and public investment in recent years. This combined with labour productivity growth slowed markedly in most developed economies and in many large developing and transition economies.
It also stressed the need of investing new capital as a driver of technological change and efficiency gains.
In particular, WESP concluded that investment in key areas, such as research and development, education and infrastructure, can promote social and environmental progress, while also supporting productivity growth.