World economy picking up but not lifting yet, UNCTAD report states


According to a new report by the United Nations Conference on Trade and Development (UNCTAD), the world economy in 2017 is picking up but not lifting off. During initial discussions about the report at the African Union Commission, participants stated that World gross output is expected to grow 2.6 percent, slightly higher than 2016, but well below the pre-financial crisis average of 3.2 percent.
The report shows that trade continues to be sluggish and capital flows to developing countries are still negative and this scenario is not sufficient to meet the current needs and expectations of the countries.
“The absence of a robust recovery in developed countries and renewed volatility of global capital flows have constrained economic growth in developing countries, albeit with considerable regional and country level variation. In general, the rapid recovery from the initial financial shock of 2008 has given way to a persistent slowdown since 2011,” the report reads.
The report argues that now is the ideal time to crowd in private investment with the help of a concerted fiscal push, a global deal, to get the growth engines revving again, and at the same time help rebalance economies and societies that, after three decades of hyper globalization, are seriously out of kilter.
“In today’s challenging and unpredictable global environment, efforts to build inclusive economies and societies will need to accelerate. Ending austerity and harnessing finance to serve society once again, rather than the other way around, are the most urgent challenges,” it states.
Furthermore, reinvigorating the multilateral trading system as a global public good with renewed momentum and relevance is also essential for achieving the Sustainable Development Goals. But as long as organized business faces little pushback across several key sectors, increased market concentration and the spread of rent-extracting behavior will continue apace, it underlines.
In return that would exacerbate inequalities that have been rising over the past three decades of hyper-globalization, and technological changes may worsen the situation if they hamper job creation, adding to a growing sense of anxiety.
“As good jobs become scarce, they are also more stringently rationed, and reinforce patterns of social discrimination, particularly along gender lines, but also affecting other disadvantaged groups. Correcting these imbalances requires systematic and concerted action at the national and international levels. Indeed, there is a pressing need for a global new deal,” it concludes.