The UN Conference on Trade and Development (Unctad) has warned that growth was slowing in all regions of the world and, as a result, a number of developing countries were carrying out continued countercyclical policies that supported domestic demand but these would not be sufficient if growth did not pick up in advanced countries.
In its report, “Trade and Development, 2012: Policies for inclusive and balanced growth”, released yesterday, Unctad predicted a tumble in developed countries to a mere 1 percent growth this year because of a combination of a renewed recession in the EU and anaemic growth of just 2 percent in the US and Japan.
It said: “The global economy weakened significantly towards the end of 2011 and further downside risks emerged in the first half of 2012. The growth rate of global output, which had already decelerated from 4.1 percent in 2010 to 2.7 percent in 2011, is expected to slow down even more in 2012, to below 2.5 percent.”
The UN agency added that, as predicted by its economists, fiscal austerity and wage compression were further weakening growth in developed countries. – Wiseman Khuzwayo