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Roundup: modest economic recovery expected by 2017 amid fledgling global outlook

Xinhua, January 22, 2016 Adjust font size:

A latest United Nations (UN) report this week indicated that global growth is set to reach 2.9 percent and 3.2 percent in 2016 and 2017 respectively, up from 2.4 percent last year.

According to the World Economic Situation and Prospects 2016 report, global economic prospects remain hampered by protracted macroeconomic uncertainties, low commodity prices with declining trade flows, exchange rate volatility, stagnant investment, and diminishing productivity growth.

A continued disconnect between finance and real sector activities have further compounded the situation, the report found.

"The report highlights a lack of strong recovery in 2015, and a relatively slow improvement in 2016 and 2017. It also highlights a more balanced contribution to growth between developing countries and developed economies," said UN Conference on Trade and Development (UNCTAD) head of macroeconomic and development branch, Alfredo Calcagno.

Findings show that developed countries, in particular the United States, are set to contribute the most to global growth in coming years, with growth in these economies to surpass 2.0 percent this year for the first time since 2010.

The report also highlighted Europe's importance for world trade growth, with gross domestic product (GDP) growth in the EU-15 to rise from 1.8 percent in 2015 to 2.1 percent in 2017.

In developing and transition economies, which were the driving force behind global economic growth before 2008, growth is projected to reach 4.8 percent in 2017, up from an estimated 3.8 percent in 2015, the lowest since the financial crisis struck the global market.

Though falling short of the UN's Sustainable Development Goal of reaching at least 7.0 percent GDP growth per annum, growth in the least developed countries are expected to rebound from 4.5 percent in 2015 to 5.6 percent this year.

Amid this evolving economic landscape, East and South Asia will remain the world's fastest growing regions, despite the relative slowdown of China's economy.

"What we are witnessing in China is something more sustainable and desirable," Calcagno reassured, reminding that "it is a growth which is important enough to stimulate the global economy, and thanks to China the demand in commodities is not going down."

China's economy is thought to have grown by 6.8 percent in 2015, down from 7.3 percent in 2014, with predictions forecasting that GDP growth will ease further to 6.4 percent this year.

"There is no example of a country growing more than 10 percent for decades, it is normal that China will grow at a slower rate and differently," Calcagno concluded.

The World Economic Situation and Prospects 2016 is a joint product of the UN Department of Economic and Social Affairs (UNDESA), UNCTAD, and the five UN regional commissions. Endit