Global growth down to decade low Prospects for #EconomicGrowth in 2020 hinge on reducing trade disputes and uncertainty,
Energy transition and the global economy
Report states that growth of 2.5 per cent in 2020 is possible, but a flareup of trade tensions, financial turmoil, or an escalation of geopolitical tensions could derail a recovery. In a downside scenario, global growth would slow to just 1.8 per cent this year. A prolonged weakness in global economic activity may cause significant setbacks for sustainable development, including the goals to eradicate poverty and create decent jobs for all. At the same time, pervasive inequalities and the deepening climate crisis are fueling growing discontent in many parts of the world.
The global economy has suffered a significant slowdown amid prolonged trade disputes and wide-ranging policy uncertainties. While a slight uptick in economic activity is forecast for 2020, the World Economic Situation and Prospects 2020 warns that economic risks remain strongly tilted to the downside, aggravated by deepening political polarization and increasing skepticism over the benefits of multilateralism. These risks could inflict severe and long-lasting damage on development prospects. They also threaten to encourage a further rise in inward-looking policies, at a point when global cooperation is paramount.
Compounding the economic slowdown, rising global temperatures and the increasing frequency and intensity of weather-related shocks press home the urgent need for a dramatic shift in the global energy mix. The World Economic Situation and Prospects 2020 explores the global economic implications of this energy transition. The transition to a cleaner energy mix will bring not only environmental and health benefits, but economic opportunities for many. However, without appropriate policy strategies, the costs and benefits will be unevenly distributed within and between countries.
United States, recent interest rate cuts by the US Federal Reserve may lend some support to economic activity. However, given persistent policy uncertainty, weak business confidence and waning fiscal stimulus, GDP growth in the United States is forecast to slow from 2.2 per cent in 2019 to 1.7 per cent in 2020. In the European Union, manufacturing will continue to be held back by global uncertainty, but this will be partially offset by steady growth in private consumption, allowing a modest rise in GDP growth from 1.4 per cent in 2019 to 1.6 per cent in 2020.
Despite significant headwinds, East Asia remains the world’s fastest growing region and the largest contributor to global growth, according to the Report. In China, GDP growth is projected to moderate gradually from 6.1 per cent in 2019 to 6.0 per cent in 2020 and 5.9 per cent in 2021, supported by more accommodative monetary and fiscal policies. Growth in other large emerging countries, including Brazil, India, Mexico, the Russian Federation and Turkey, is expected to gain some momentum in 2020.
United Nations Information Centre
cordially invites you to a
Media Launch of
UN World Economic Situation and Prospects 2020
at 11.00 a.m. on Friday, 17 January 2020
UN House, 55 Lodi Estate
The Report will be presented to the press by
Dr. Nagesh Kumar
Head, UN Economic and Social Commission for Asia and the Pacific,
Sub-regional Office for South and South-West Asia (UNESCAP-SSWA)
WESP is the United Nations’ flagship publication on expected trends in the global economy, produced annually by the UN Department of Economic and Social Affairs (DESA), the UN Conference on Trade and Development (UNCTAD) and the five UN regional commissions.
According to WESP 2020, economic growth in South Asia is forecast to recover to 5.1 per cent in 2020, after falling to a decade-low of 3.3 per cent in 2019, but it will remain well below the rates seen in the recent past. The region struggled in 2019 with a combination of external headwinds, notably the global economic slowdown and falling trade, and country-specific domestic challenges. As the effects of one-off shocks wane and governments respond with vigorous fiscal expansion, economic activity will rebound in most of the countries.
After experiencing a sharp economic slowdown from 6.8 per cent in 2018 to 5.7 per cent in 2019, India has committed to an ambitious fiscal expansion to complement the country’s already loose monetary policy. The combination of the fiscal stimulus and financial sector reforms, boosting investment and consumption, is expected to support a recovery in growth to 6.6 per cent, but it will take continued structural reforms to bring India’s growth back to its previous levels.
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