NEW YORK: December 10, 2015. The UN estimates the global economy will have grown just 2.4 percent by the end of 2015, a drop of 0.4 percent from a forecast six months ago.
A new study says growth in developing and transition economies has slowed to its weakest pace since the global financial crisis of 2008-2009 amid lower commodity prices, large capital outflows and increased financial market volatility.
Identifying five factors affecting future global growth, the report cites persistent macroeconomic uncertainties; low commodity prices and diminished trade flows; rising volatility in exchange rates and capital flows; stagnant investment and productivity growth; and a continued disconnect between finance and real sector activities.
The UN says the "pivot of global growth is partially shifting again towards developed economies" - given the slowdown in China and persistently weak economic performances in Russia and Brazil. It projects the global economy will grow 2.9 percent in 2016 and 3.2 percent in 2017, with growth in developed economies surpassing 2.0 percent next year for the first time since 2010.
"Stronger and more coordinated policy efforts are needed to ensure robust, inclusive and sustainable economic growth, which will be a key determinant to achieve the 2030 Sustainable Development Goals," commented assistant secretary-general of the UN Department of Economic and Social Affairs, Lenni Montiel.
The report notes that global energy-related carbon emissions showed no growth in 2014 for the first time in 20 years, with the exception of 2009 when the global economy contracted. This suggests the possibility that the world might start to see some de-linking between economic growth and carbon emission growth, the UN adds.
A just-released related study by the World Bank has analyzed 750 cities to determine what makes them competitive and how they have grown their economies.
The report looks at global and regional trends and compared different types of cities by income, sector, region, and industrial mix. It finds that the more competitive centers are often secondary cities experiencing rapid industrialization such as Saltillo, Mexico; Meknes and Tangier, Morocco; Coimbatore, India; Gaziantep, Turkey; Bucaramanga, Colombia; Onitsha, Nigeria; and Changsha, China.
The report concludes their success is due to becoming better at what they already do: leveraging their comparative advantage to export tradable goods and services to other cities and countries.