The United Nations foresees a slight improvement in world economic growth over the next two years, following last year’s less than stellar performance.
According to the World Economic Situation and Prospects 2016 report — jointly published by the U.N. Conference on Trade and Development and the U.N. Economic Commission for Europe — the world economy grew by a mere 2.4 percent in 2015. U.N. economists say they expect a modest improvement over the coming two years, with global growth reaching 3.2 percent at the end of next year.
The U.N.’s joint report, which was launched in Geneva, predicts growth in developed economies will continue to gain momentum this year, surpassing 2 percent for the first time since 2010. It says developing and transition economies are expected to do even better with growth rates reaching 4.3 percent in 2016 and 4.8 percent in 2017.
China still a major player
It says East and South Asia will remain the world’s fastest-growing regions, despite the slowdown in China. A senior economist at the U.N. Conference on Trade and Development, Alfredo Calcagno, says China continues to significantly contribute to global growth, despite its economy's downturn.
Employees work along a production line at a factory of Dongfeng Nissan Passenger Vehicle Co. in Zhengzhou, Henan province, China, Nov. 12, 2015.
He tells VOA he believes the world’s reaction to the economic slowdown in China is exaggerated.
“What we are witnessing is something normal and desirable in the sense that the new rates and the new modalities for growth are more sustainable… because it is slowing down to 6.9 percent. It is not a slow growth. It is a growth important enough to provide a stimulus for the global economy,” he said.
Calcagno says China will continue to be one of the engines of the world economy for the foreseeable future.
The report says the European Union is now the driving force behind world trade growth. It expects the Gross Domestic Product in the region to grow to 2 percent this year and rise slightly in 2017. It finds southeastern Europe will continue to benefit from low oil prices, accelerating growth over the next two years to 3 percent.
U.N. economists warn that geopolitical risks could have a negative impact on business confidence and be disruptive to trade in the European region. They say unresolved tensions in Ukraine and its deteriorating economic relations with Russia, as well as the conflicts in the Middle East, which have created the migration crisis in Europe, could have a depressing influence.