| |
UN Forecasts Slower Global Growth 05/16 06:20
The United Nations on Thursday forecast slower global economic growth this
year and next, pointing to the impact of the surge in U.S. tariffs and
increasing trade tensions.
UNITED NATIONS (AP) -- The United Nations on Thursday forecast slower global
economic growth this year and next, pointing to the impact of the surge in U.S.
tariffs and increasing trade tensions.
U.N. economists also cited the volatile geopolitical landscape and threats
of rising production costs, supply chain disruptions and financial turbulence.
"These days, there's so much uncertainty in the air," said Shantanu
Mukherjee, director of the Economic Analysis and Policy Division at the U.N.
Department of Economic and Social Affairs.
"It's been a nervous time for the global economy," he told reporters while
launching the midyear forecast. "In January this year, we were expecting two
years of stable -- if subpar -- growth, and since then, prospects have
diminished, accompanied by significant volatility across various dimensions."
The U.N. is now forecasting global economic growth of 2.4% this year and
2.5% next year -- a drop of 0.4 percentage point each year from its projections
in January. Last year, the global economy grew 2.9%.
Mukherjee said the slowing is affecting most countries and regions, but
among the most severely hit are the poorest and least developed countries,
whose growth prospects have fallen from 4.6% to 4.1% just since January.
"That translates into a loss of billions in economic output for the most
disadvantaged of countries," which are home to over half the global population
living in extreme poverty, he said.
The world's developed and developing countries also are projected to suffer,
according to the U.N. report.
Economic growth in the United States is now projected to drop significantly,
from 2.8% last year to 1.6% this year, it said, noting that higher tariffs and
policy uncertainty are expected to weigh on private investment and consumption.
China's growth is expected to slow to 4.6% this year from 5% in 2024 as a
result of subdued consumer sentiment, disruptions in its export-oriented
manufacturing companies, and continuing challenges in its property sector, the
report said.
The European Union's growth is forecast to remain the same this year as it
was last year -- just 1%, the report said, citing weaker net exports and higher
trade barriers. The United Kingdom's economic growth of 1.1% last year is
projected to fall to 0.9%.
Weakening trade, slowing investments and falling commodity prices are also
forecast to erode growth in other major developing economies, including Brazil,
Mexico and South Africa.
India will remain one of the world's fastest-growing large economies, but
the U.N. forecast said its growth is expected to drop from 7.1% in 2024 to 6.3%
this year.
The U.N.'s global economic growth forecast is lower than the International
Monetary Fund's.
On a more positive note, Mukherjee said the U.N. is expecting that bilateral
negotiations will lead to lower tariffs, although he said they won't return to
the levels before U.S. President Donald Trump's February announcement.
Nonetheless, Mukherjee said, resolving uncertainties would help individuals
and businesses move forward with economic decisions and that would have a
positive impact on the global economy.
|
|
