WORLD ECONOMIC SITUATION AND PROSPECTS (WESP) MID-YEAR UPDATE
- IHRC NEWSROOM
- May 24, 2019
- 4 min read
May 2019
Global growth outlook has weakened, amid unresolved trade tensions and elevated international policy uncertainty, according to the World Economic Situation and Prospects as of mid-2019. Across both developed and developing countries, growth projections for 2019 have been downgraded. Following an expansion of 3.0 per cent in 2018, world gross product growth is now projected to moderate to 2.7 per cent in 2019 and 2.9 per cent in 2020, reflecting a downward revision from the forecasts released in January. The report identifies several downside risks that could trigger a sharper or more prolonged growth slowdown in the world economy, potentially inflicting significant damage on development progress. These risks include a further escalation in trade disputes, a sudden deterioration in financial conditions, and the accelerating effects of climate change. Tackling the current growth slowdown and placing the world economy on a robust path in support of the 2030 Agenda for Sustainable Development require more comprehensive and well-targeted policy responses, including a combination of monetary, fiscal and development-oriented measures.
The increase in frequency and intensity of natural disasters highlight the rising threats from climate change, particularly for the most vulnerable economies. The report calls for a stronger and more coordinated multilateral approach to global climate policy, which includes the use of carbon pricing mechanisms. A price on carbon compels economic decisionmakers to internalize some of the environmental costs of their consumption and production.
2018
17 May 2018
Short-term prospects for the world economy have continued to improve, according to the World Economic Situation and Prospects as of mid-2018. World gross product is expected to expand by 3.2 per cent in both 2018 and 2019, marking an upward revision from forecasts released in December 2017. The recent improvement reflects a further uptick in the growth outlook for developed economies in 2018, on the strength of accelerating wage growth, broadly favourable investment conditions, and the short-term impact of a fiscal stimulus package in the United States. Higher levels of energy and metal prices are also supporting a gradual recovery in many commodity-exporting countries. However, the improvement in economic growth has been accompanied by an increase in downside risks, including a rise in the probability of trade conflicts between major economies; increased uncertainty regarding the pace of monetary policy adjustment in developed economies; high and increasing levels of debt; and greater geopolitical tensions.Read more
2017
16 May 2017
The mid-year update of the World Economic Situation and Prospects 2017 confirms the projections made in the World Economic Situation and Prospects 2017 in January 2017 of a modest recovery in global growth for 2017-2018. Helped by a moderate recovery in trade and investment, world gross product is expected to expand by 2.7% in 2017 and 2.9% in 2018. While this marks a notable acceleration compared to 2016, growth in many regions remains below the levels needed for rapid progress towards achieving the Sustainable Development Goals.
Average growth of 4.7% in 2017 and 5.3% in 2018 is forecast for Least Developed Countries (LDCs), well below the Sustainable Development Goal (SDG) target of at least 7 per cent GDP growth. Under the current growth trajectory and assuming no changes in income inequality, nearly 35% of the population in LDCs, highly-indebted poor countries and countries in fragile and conflict affected situations may remain in extreme poverty by 2030.Read more
2016
12 May 2016
Weak global growth continues to linger, posing a challenge to the implementation of the 2030 Agenda for Sustainable Development. World gross product is projected to expand by just 2.4 per cent in 2016, the same weak rate as in 2015. This reflects significant downward revisions of growth for many countries in Africa, the Commonwealth of Independent States (CIS), and Latin America and the Caribbean from the forecasts in December 2015. Persistent weakness in aggregate demand in developed economies remains a drag on global growth, while low commodity prices, mounting fiscal and current-account imbalances and policy tightening have further dampened the growth prospects of many commodity-exporting economies. The already bleak growth prospects have been compounded by severe weather-related shocks, political challenges and large capital outflows in many developing regions.
Downside risks to the global economy remain elevated against the backdrop of weak demand, low investment, low commodity prices and the financial market turbulences. Divergent global inflationary pressures have prompted procyclical monetary tightening in several developing economies, in contrast to additional monetary easing in the euro area and Japan, and delays in interest-rate rises by the United States Federal Reserve. Increased divergence in global interest rates may intensify capital flow volatility and exchange-rate pressures in developing economies. Greater policy coordination among countries can mitigate the negative spillover effects of policy misalignment and contain financial market volatility. There is also a growing need for reducing high dependency on monetary policy by exploiting available fiscal space and other policy measures to boost global growth.
World Economic Situation and Prospects as of mid-2016 Press Release: World Economic Situation and Prospects as of mid-2016
2015
19 May 2015
The mid-year update of theWorld Economic Situation and Prospects forecasts growth of world gross product to accelerate slightly from 2.6 per cent in 2014 to 2.8 per cent in 2015—a downward revision by 0.3 percentage points from the forecast presented in the World Economic Situation and Prospects 2015 in January. In 2016, global growth is forecast to improve to 3.1 per cent. The report was launched today in New York by Pingfan Hong, Director of the Development Policy and Analysis Division (DPAD), UN/DESA; and Ingo Pitterle, Economic Affairs Officer, DPAD/DESA.
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