UN report reveals world may see slight uptick in economic activity, hinging on reducing trade disputes, uncertainty
A UN report expected a modest rebound in global economic growth for 2020, assuming that numerous risks lurking on the horizon will not materialize.
The world economy is foreseen to grow by 2.5% this year if trade tensions, geopolitical frictions and financial turmoil do not escalate and catastrophic climate shocks remain at bay, the UN expected in its annual report — titled World Economic Situation and Prospects 2020 — released late Thursday.
It underlined that policy uncertainties will continue to weigh on investment plans.
Even as global trade tensions ease along some fronts, the potential for relapse is high, as important issues underlying these disputes have yet to be tackled in depth, it warned.
In a downside scenario, global growth would slow to 1.8% in 2020, the report said, adding that a prolonged weakness in global economic activity may cause significant setbacks for sustainable development.
Pointing to risks that could inflict severe and long-lasting damage on development prospects, UN Secretary-General António Guterres said: “They also threaten to encourage a further rise in inward-looking policies, at a point when global cooperation is paramount.”
The UN report underscored that other mediums of well-being paint an even bleaker picture in several parts of the world — namely climate crisis, inequalities, food insecurity and undernourishment.
Elliott Harris, UN chief economist and assistant secretary-general for economic development, called on policymakers to aim to enhance well-being in all parts of society rather than promoting GDP growth.
“This requires prioritizing investment in sustainable development projects to promote education, renewable energy and resilient infrastructure,” he argued.
The report also underlined the requirement for a more balanced policy mix to stimulate economic growth while moving towards greater social inclusion, gender equality and environmentally sustainable production.
Pointing to growing discontent over a lack of inclusive growth, Harris said: “Much greater attention needs to be paid to the distributional and environmental implications of policy measures.”
Growth in Turkey to gain momentum in 2020
The UN report expected the U.S. to slow in growth from 2.2% in 2019 to 1.7% in 2020 due to persistent policy uncertainty, weak business confidence and waning fiscal stimulus.
Economic growth in the EU is expected to post a modest rise, reaching 1.6% this year, up from 1.4% in 2019, thanks to private consumption.
China’s GDP growth is projected to moderate gradually from 6.1% last year to 6.0% in 2020 and 5.9% in 2021, supported by more accommodative monetary and fiscal policies, it said.
“Growth in other large emerging countries, including Brazil, India, Mexico, the Russia and Turkey, is expected to gain some momentum in 2020,” the report added.