The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) on 19 January 2016 released World Economic Situation and Prospects (WESP) 2015 report. The report highlights that the world economy stumbled in 2015 and only a modest improvement is projected for 2016/17.
Highlights of the Report
- Global growth is estimated at a mere 2.4 percent in 2015, marking a downward revision by 0.4 percentage points from the UN forecasts presented in 2015.
- The world economy is projected to grow by 2.9 percent in 2016 and 3.2 per cent in 2017, supported by generally less restrictive fiscal and still accommodative monetary policy stances worldwide.
- The large capital outflows and increased financial market volatility, growth in developing and transition economies has slowed to its weakest pace since the 2008 global financial crisis.
- Given the much anticipated slowdown in China and in other large emerging economies notably the Russian Federation and Brazil, the pivot of global growth is partially shifting again towards developed economies in 2016.
- In 2016 and 2017, South Asia region is expected to be the world’s fastest-growing region despite challenging global conditions.
- GDP growth in the least developed countries is expected to rebound from 4.5 percent in 2015 to 5.6 percent growth in 2016, but will fall short of the Sustainable Development Goal target of at least 7 percent GDP growth per annum in the near term.
- It indicates that the challenges for policymakers around the globe are likely to intensify in the short run in view of the weaknesses in the world economy.
- It also shares some positive recent trends in environmental sustainability. Global energy related carbon emissions experienced no growth in 2014 for the first time in 20 years.
- The broad slowdown in economic growth in many developing economies and generally weak wage growth will restrain progress in poverty reduction in the near term.
- The terms-of-trade of commodity exporters have deteriorated significantly, limiting their ability to demand goods and services from the rest of the world.
Five major headwinds for global economy
The WESP 2016 report identifies five major headwinds for the global economy. These are:
- Persistent macroeconomic uncertainties
- Low commodity prices and diminished trade flows
- Rising volatility in exchange rates and capital flows
- Stagnant investment and productivity growth
- Continued disconnect between finance and real sector activities
India in WESP 2016
India will be the fastest growing big economy in the world in 2016. The report has projected India’s growth rate at 7.3 percent in the year 2016 and 7.5 percent in 2017, which is slightly up from an earlier estimated 7.2 percent rate in 2015.
About United Nations World Economic Situation and Prospects (WESP) report
WESP report is published annually at the beginning of the year jointly by the UN Department of Economic and Social Affairs (UN/DESA), the UN Conference on Trade and Development (UNCTAD), the five UN regional commissions and the World Tourism Organization (UNWTO).
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