A UN report, unveiled on Thursday, has painted a gloomy picture of the performance of the global economy next year, saying improvement will be “slight'”.
It said that the global economy growth was projected to be a meagre 3.1 percent, followed by 3.5 percent in 2012, noting that the rates were “insufficient to spur the recovery of the jobs that were lost during the economic crisis”.
“The lack of employment continues to put a damper on economic recovery,” the report, entitled: “The World Economic Situation and Prospects 2011 (WESP)”, stated.
The report was prepared by the UN Department of Economic and Social Affairs (DESA), the UN Conference on Trade and Development (UNCTAD) and the five UN economic commissions.
It also disclosed that, “between 2007 and the end of 2009, at least 30 million jobs were lost worldwide as a result of the global financial crisis”.
It also said that, “efforts by governments to embark on fiscal austerity can only further suppress the prospects for a faster recovery of employment”.
“We are not out of the woods yet and still major risks are looming,” Rob Vos, the Director of the Development Policy and Analysis Division of DESA, who led the team of UN economists who prepared the report, said.
“The road to recovery is expected to be long and bumpy still. The speed of the recovery as we have seen starting in the middle of 2009 has started to decelerate in the middle of this year particularly owing to weaknesses in the major developed economies.
“But, we also expect that to drag down the growth in developing countries,” Vos told a news conference at UN headquarters to unveil the report.
He also said that, “serious risks to the global economy include waning cooperative spirit among major economies, has weakened the effectiveness of responses to the crisis”.
He noted that, “uncoordinated monetary responses have become a source of turbulence and uncertainty in financial markets”.
Meanwhile, the report showed that developing countries continued to drive the global recovery, but their output growth is also expected to shrink to 6 per cent during 2011-2012, down from 7 per cent in 2010.
It said: “This is so because of the slowdown in the advanced countries and the phasing out of stimulus measures”.
According to the report: “Developing countries in Asia, led by China and India, continue to show the strongest growth performance, but will moderate to around 7 per cent in 2011 and 2012”.
“Growth in Latin America is projected to remain relatively strong at around 4 per cent, though less robust than the
GDP growth of 5.6 per cent estimated for 2010.
“Brazil, the engine of regional growth, continues with strong domestic demand to boost export growth of neighbouring countries. The sub-region also benefits from strengthened economic ties with the emerging economies in Asia,” it noted.
The report further said that, “recovery has been solid in most of Africa, where the rebound is expected to
continue at about 5 per cent per year in 2011 and 2012”.
“But, this is well below potential, and conditions vary across the region.
“The economies in East Africa are showing strong growth, but several of the poorest countries, especially those in the Sahel region, have suffered from droughts and conditions of insecurity, which is causing hunger and hampering the recovery of their economies,” it