UN revises world economic growth downwards to 1.8 pc for 2008

Fri, May 16 03:01 PM

Dharam Shourie New York, May 16 (PTI) Warning that the world economy is now "teetering on the brink of a severe global downturn," the United Nations said it expects growth this year to be sharply lower at 1.8 per cent - nearly half of the 3.4 per cent growth estimated only three months ago. A new report released on Thursday predicts that slowdown will be in all regions, with South and East Asia facing a major downturn where the growth would decline to about 8.5 per cent in the current year from 11 per cent last year.

India, it says, too would face a slowdown. UN said world economic growth next year would, however, ge better at 2.1 per cent.

The global economy expanded by 3.8 per cent in 2007. In the African region, if the pessimistic scenario were to work out, economic growth would almost come to a standstill, down to 2.2 per cent in 2008 and 1.1 per cent in 2009, creating a major obstacle to the prospects of these countries achieving the Millennium Development Goals (MDGs).

Latin America, which did better than expected in 2007, but had close trade linkages with the United States economy, is expected to suffer strong negative impacts of lowered demands for its exports during 2008 and 2009, leading to lowered growth performance. A worst-case scenario would see the "world economy come to a virtual standstill" if recent financial measures in the US fail to turn the economy around, and house prices continue to fall, with a severe tightening on credit, it warns.

To boost the global economy, the report calls for an internationally coordinated economic stimulus package to support US efforts, centred on the expansion of domestic demand in countries with savings surpluses especially in Europe, the Arabian Gulf and East Asia. PTI.

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