UNITED NATIONS — The United Nations predicted a modest recovery in the global economy in 2017-18 but warned Tuesday that its projection is an indication of economic stabilization rather than a signal of robust revival.
In its annual economic report, the U.N. said the world economy expanded by just 2.2 percent in 2016, the slowest rate of growth since the depth of the recent recession in 2009.
It forecast growth of 2.7 percent this year and 2.9 percent in 2018, a slight downward revision from its mid-year forecast in May.
“Underpinning the sluggish global economy are the feeble pace of global investment, dwindling world trade growth, flagging productivity growth and heavy levels of debt,” the U.N. report said.
As one example, the report noted that world trade volume expanded by just 1.2 percent in 2016, “the third-lowest rate in the past 30 years.”
The report also cited uncertainties over what changes U.S. President-elect Donald Trump may make on important policies dealing with international trade, immigration and climate change – and what impact Britain’s decision to leave the European Union will have for the free movement of goods and workers in Europe.
“All of these uncertainties have the potential to undermine any projected recovery in business investment, impede international trade growth and even derail the already weak global growth,” the U.N. warned.
In releasing the report, Assistant Secretary-General for Economic Development Lenni Monteil urged countries to redouble 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.”
U.N. senior economist Dawn Holland, who oversaw the report, said “the global economy remains stressed and trapped in a prolonged episode of slow growth.”
She said the world is unlikely to return to “strong and balanced growth … without concerted policy efforts to stimulate a revival of investment and productivity.”
Holland said a key U.N. concern is that the rate of growth in the forecasts isn’t sufficient to make rapid progress toward achieving the 17 U.N. goals for 2030 adopted by world leaders, including eradicating poverty and creating decent jobs for all.
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