UN: Global Economy Will Grow 1.4 Pct
The global economy will grow by only 1.4 percent this year, with the terror attacks on the United States blamed for further slowing an already shrinking world economy, the United Nations said in a revised report issued Wednesday.
Only three months ago, the U.N. forecast called for a 2.4 percent increase.
A downward revision would have been necessary at any rate, a top U.N. economist said, because the world economy was slowing more rapidly than anticipated.
But the economic slowdown has been "aggravated and exacerbated" by the economic "shock waves" after the attacks on New York and the Pentagon, said Ian Kinniburgh, the top policy analyst in the U.N. Department of Economic and Social Affairs whose team prepared the report.
In its admittedly "gloomy outlook," the United Nations said the global economy is now growing at its slowest pace in a decade, dashing hopes of recovery in the second half of the year.
Instead, the United Nations said it is now expecting "a dilatory and tepid recovery" in mid-2002 with global economic growth of just 2 percent next year.
At the same time, the volume of international trade is expected to register "virtually no growth" in 2001, the United Nations warned, but trade is forecast to increase by 4 percent to 5 percent in 2002.
Before Sept. 11, the weakness in the U.S. economy had spread, hitting hardest countries with substantial trade and production links with the United States, the report said.
The United Nations report said U.S. economic growth, after the Sept. 11 attacks, would decline in the last half of this year and stand at only 1 percent in 2001, the lowest in a decade. The report said a mild recovery is expected in 2002, with the growth rate at 2 percent.
The most seriously affected developing economies are expected to be in south and east Asia, where economic growth projections for 2001 have been lowered from 4.1 percent to 1.7 percent, according to the report.
In Africa, U.N. growth projections for this year have been revised downward from 4.3 percent to 3 percent, and in Latin American from 3.1 percent to 0.8 percent.
Among developed countries, the report said Canada is expected to feel the greatest impact of the significantly weaker U.S. economy, but Japan's performance is expected to be the weakest, with its economic growth now forecast to decline 0.5 percent this year.
For the European Union, the United Nations revised its forecast of 2.7 percent economic growth in 2001 down to 1.8 percent, and predicted growth of just 1.75 percent next year.
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