Geneva: The global economy is expected to grow by 4.7% this year, faster than predicted, thanks to a stronger recovery in the United States (US), where progress in distributing vaccines and a fresh fiscal stimulus of $1.9 trillion are expected to boost consumer spending, says a new UNCTAD analysis.
Nevertheless, this will still leave the global economy over $10 trillion short of where it could have been by the end of 2021 if it had stayed on the pre-pandemic trend and with persistent worries about the reality behind the rhetoric of a more resilient future.
The analysis entitled “Out of the frying pan ...Into the fire” is UNCTAD’s Trade and Development Report update released on Thursday.
The brunt of the hit to the global economy is being felt in developing countries with limited fiscal space, tightening balance of payments constraints and inadequate international support, according to UNCTAD.
"And while all regions will see a turnaround this year, potential downside health and economic risks could still produce slippages," stated the United Nations (UN) Agency in a press release on Thursday.
Looking further ahead, the report says atavistic economic dogmas, weak multilateral cooperation and a widespread reluctance to tackle the problems of inequality, indebtedness and insufficient investment – all worsening thanks to covid-19 – suggest that, without a change of course, an unbalanced recovery, vulnerability to further shocks and persistent economic insecurity will become the new normal for many.
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