UN raises international financial forecast to five.4% progress in 2021

UNITED NATIONS (PA) – The United Nations responded to the rebound within the Chinese language and US economies on Tuesday by revising its international financial forecast upwards to five.4% progress for 2021, however it warned that the surge in COVID cases- 19 and inadequate vaccine availability in lots of international locations threaten a large-scale restoration.

By rising its projection from January of progress of 4.7%, the UN report on the state and outlook for the world financial system in mid-2021 highlighted the speedy deployment of vaccines in a couple of giant economies led by the US and China and a rise in world commerce in items and manufactured merchandise. which has already reached its pre-pandemic degree.

However the UN has warned that “that is unlikely to be sufficient to stimulate the remainder of the world’s economies” and that “the financial prospects for international locations in South Asia, sub-Saharan Africa and Latin America and the Caribbean stay fragile. and unsure ”.

Lead creator Hamid Rashid, head of the World Financial Monitoring Department of the United Nations Division of Financial and Social Affairs, instructed a press convention that “Europe’s prospects aren’t as vibrant as anticipated Due to the indicators of the second and third waves of COVID-19. infections.

“The principle problem we’re at present going through globally is that infections proceed to extend in lots of elements of the world, and we’re seeing new variants and mutations affecting giant populations in South Asia, additionally in Latin America. “, did he declare. “This poses a big problem by way of restoration and international financial progress.”

Rashid mentioned: “Immunization might be the primary downside proper now in placing the world financial system on a gentle path to restoration.” He famous, nevertheless, that “vaccine inequity is a serious problem”.

In regular instances, he mentioned, 5.4% could be thought of a really excessive financial progress charge, however this yr it barely makes up for the losses of final yr and the expansion is “very uneven and likewise very unsure ”.

He mentioned the UN expects the US financial system, which could be very robust, to develop by about 6.2% this yr, “the quickest rising US financial system since 1966,” and that it expects the Chinese language financial system to develop by round 8.2%.

However he known as India, Brazil, South Africa and plenty of different growing international locations “weak spots”.

Rashid mentioned that previously, the expansion charge of growing international locations could be above the worldwide common, however this yr the typical progress charge of many growing international locations and areas is decrease because of the pandemic.

One of many important drivers of the financial restoration has been funding, he mentioned, with some international locations like the US solely seeing a 1.7% drop in funding final yr. , whereas some developed international locations have seen their investments fall by 4% of GDP or extra.

The $ 16 trillion in stimulus measures to counter the financial affect of the coronavirus pandemic “had been important to stop a whole collapse of the worldwide financial system,” Rashid mentioned, “however it didn’t result in a rise large funding. ”

He warned that “large spikes in inventory costs all over the world” create “a threat to monetary stability all over the world, and we should be vigilant about this threat, because it may additionally derail future restoration efforts.” .

Rashid mentioned the UN’s forecast of 5.4 p.c progress this yr is way more cautious than these of different worldwide organizations, together with the Worldwide Financial Fund, which final month revised its progress upwards. projection for 2021 at 6%.

“We’re nonetheless optimistic concerning the international financial system,” mentioned Rashid, however “there are lots of uncertainties that now we have highlighted in our report, particularly the unfold of vaccination and protection that should happen within the subsequent six months to achieve this man. of the expansion charge that we’re projecting right here.

For 2022, the UN forecast that the worldwide financial system will develop by round 4.7% is larger than the IMF projection of 4.4%.

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