World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 


Trade slump & unemployment hold back world economy


Trade slump and unemployment hold back world economy - UN annual survey

  • Click here to listen to this UN report…
  • Political uncertainties that sidetracked a once-promising economic recovery are easing, but the persisting slowdown in trade and investment and rising unemployment continue to hold back world growth as well as hopes for significant progress on poverty reduction, according to the United Nations' annual economic survey released today.

    A complicating factor in the recovery is the long-anticipated decline in the value of the dollar, largely in reaction to the ballooning external deficit of the United States and a robust recovery would need to be built on a broader base than just the US economy, the survey says.

    Overall, the world economy is expected to grow by only 2¼ per cent in 2003, according to the UN World Economic and Social Survey forecast, following 2 per cent growth over the course of 2002. Trade also is expected to pick up incrementally to 4 per cent growth in 2003 compared with 2 per cent last year. Foreign investment remains hesitant.

    With globally weak effective demand, the overcapacity created by excessive investment in the 1990s, especially in the information, communications and technology sector, has been reduced more slowly than expected, and political shocks of the past year have resulted in a large degree of slack in other sectors, most notably in the travel industry, the report says.

    "Overcapacity will continue to have a dampening effect on the business investment that is necessary to sustain recovery," it adds, but even so "most of the negative consequences of the earlier geopolitical uncertainties are expected to dissipate by the third quarter of 2003."

    Among elements of a return to strong growth that are in place, according to the Survey, which will be presented to international policy makers at the 30 June start of the UN Economic and Social Council in Geneva, is a low-inflation world environment which has allowed policy makers to launch stimulative macroeconomic and fiscal policies.

    Other factors include the need to replenish reduced inventories brought on by protracted weakness since 2000, thus bolstering demand and the fact that many developing countries are benefiting from improved, albeit still historically low, commodity prices, and those able to borrow in international capital markets are able to take advantage of low interest rates.

    Introducing the survey, Ian Kinniburgh, Director of the Development Policy Analysis Division, UN Department of Economic and Social Affairs, told a news conference the delay in recovery had imposed costs on the world economy, particularly in developing countries in terms of the long term and achieving the Millennium Development Goals of halving poverty by 2015.

    In developing countries, growth in 2003 had been one half per cent less than anticipated, Mr. Kinniburgh said. It would take a while for them to get back to former growth rates. But the most populous countries, India and China, had achieved high rates of growth, which was important, as those two countries also had the largest number of the world’s poorest people.

    He added that 2004 would show the road to recovery but major risks to that recovery were of a geopolitical nature, as terrorist attacks were feared. Factors such as the SARS epidemic also could have global economic consequences. The past few years had been an inauspicious beginning of the millennium, as growth in developing countries had been offset by population growth, he said. There was a need for international cooperation and long-term stimulus measures.


    © Scoop Media

     
     
     
     
     
    World Headlines

     

    At The UN: Paris Climate Agreement Moves Closer To Entry Into Force

    The Paris Agreement on climate change moved closer toward entering into force in 2016 as 31 more countries joined the agreement today at a special event hosted by United Nations Secretary-General Ban Ki-moon. More>>

    ALSO:

    ALSO:

    Gordon Campbell: On The End Game In Spain (And Other World News)

    The coverage of international news seems almost entirely dependent on a random selection of whatever some overseas news agency happens to be carrying overnight... Here are a few interesting international stories that have largely flown beneath the radar this past week. More>>

    Amnesty/Human Rights Watch: Appalling Abuse, Neglect Of Refugees On Nauru

    Refugees and asylum seekers on Nauru, most of whom have been held there for three years, routinely face neglect by health workers and other service providers who have been hired by the Australian government, as well as frequent unpunished assaults by local Nauruans. More>>

    ALSO:

    Other Australian Detention

    Gordon Campbell: On The Censorship Havoc In South Africa’s State Broadcaster

    Demands have included an order to staff that there should be no further negative news about the country’s President Jacob Zuma, and SABC camera operators responsible for choosing camera angles that have allegedly made the President ‘look shorter’ were to be retrained... More>>

    ALSO:

    Gordon Campbell: On A Bad Week For Malcolm Turnbull, And The Queen

    Malcolm Turnbull’s immediate goal – mere survival – is still within his grasp... In every other respect though, this election has been a total disaster for the Liberals. More>>

    ALSO:

    Gordon Campbell: On Bidding Bye Bye To Boris

    Boris Johnson’s exit from the contest for Conservative Party leadership supports the conspiracy theory that he never really expected the “Leave” option to win the referendum – and he has no intention now of picking up the poisoned chalice that managing the outcome will entail... More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
    World
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news