19 Jan 2015
Geopolitical tensions such as fighting in Ukraine and deflation are just two of the major risks to global growth in 2015 and beyond, UN economists warned Monday.
In a new report on the state of the world’s economy and prospects for the next two years, the United Nations Conference on Trade and Development (UNCTAD) said there was only “moderate and uneven” growth of 2.6 per cent in 2014.
It anticipates global economic growth of 3.1 per cent in 2015 and 3.3 per cent in 2016.
Austerity measures introduced too soon in developed countries after the global economic crisis in 2008 continue to weigh on growth but are only part of the problem.
Here’s UNCTAD senior economist José Palacin:
“In 2010 many countries shifted towards fiscal austerity that was premature we said and harmful; this remains the case, but as fiscal austerity itself has receded to some extent, the problem is not that serious, what is missing is fiscal stimulus now.”
The UN report added that there’s a risk of “Japan-style deflation” in the euro zone although the trend of a weakening euro against the dollar was a good thing for EU countries.
The US economy, meanwhile, is expected to see a 2.8 rise in its GDP this year and a 3.1 per cent increase in 2016.
Elsewhere, large developing economies in Latin American and the Commonwealth of Independent States (CIS) saw a sharp deceleration in growth in 2014, UNCTAD said.
In contrast, East Asia — including China — saw only a mild slowdown, while India drove growth in South Asia last year.
Daniel Johnson, United Nations.
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