New Delhi, June 26: Geopolitical uncertainties that sidetracked a once-promising economic recovery are easing, but continuing slowdown in trade and investment and rising unemployment, continue to hold back world growth, as well as significant progress on poverty reduction. This was revealed on Wednesday, in the annual UN World Economic and Social Survey, prepared by the department of economic and social affairs. According to the survey forecast, the world economy is expected to grow by only 2.25% in ‘03, following a 2% growth in ‘02.
Trade is also expected to pick up incrementally, to attain 4% growth in ‘03, compared to 2% last year. Foreign investment remains uncertain. With globally weak effective demand, the overcapacity created by excessive investment in the 1990s, especially in the ICT sector, has reduced more slowly than expected. At the same time, the geopolitical shocks of the past year have resulted in a large degree of slackness in other sectors, most notably in the travel industry.
According to the report, “over capacity will continue to have a dampening effect on business investment, which is necessary to sustain recovery.”
Bureau Report