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World economic growth set to accelerate, weak dollar a risk: UN
Geneva, June 25: World economic growth is set to accelerate to three per cent in 2004, but a global recovery is fraught with risk and hampered by the depreciation of the dollar, the United Nations said today.
Geneva, June 25: World economic growth is set to accelerate to three per cent in 2004, but a global recovery is fraught with risk and hampered by the depreciation of the dollar, the United Nations said today.
The UN forecast in its annual world economic and social survey that overall growth in the world economy should exceed about two per cent in 2003, against just below two per cent last year.
The world economy still depends on the United States as a motor of growth, and the fall in the value of the dollar will dampen the stimulating effect of a us recovery expected in the second half of this year, the survey said.
"A widespread recovery is necessary because, while they may launch a recovery, the present positive forces in developed countries, particularly the United States, are unlikely to be sufficient on their own to sustain a recovery throughout 2004," it said.
The dollar's depreciation could also have a negative impact on financial markets in the US by reducing foreign capital and triggering a further decline in the value in the US currency.
"If such a vicious circle was formed, financial markets worldwide would be in jeopardy and would be adversely affected, to the detriment of economic growth," the survey warned.
The pace of a global recovery will also be restrained by private sector efforts to cut costs and by government attempts to stifle budget deficits that dampen investment, it added.
Bureau Report
The world economy still depends on the United States as a motor of growth, and the fall in the value of the dollar will dampen the stimulating effect of a us recovery expected in the second half of this year, the survey said.
"A widespread recovery is necessary because, while they may launch a recovery, the present positive forces in developed countries, particularly the United States, are unlikely to be sufficient on their own to sustain a recovery throughout 2004," it said.
The dollar's depreciation could also have a negative impact on financial markets in the US by reducing foreign capital and triggering a further decline in the value in the US currency.
"If such a vicious circle was formed, financial markets worldwide would be in jeopardy and would be adversely affected, to the detriment of economic growth," the survey warned.
The pace of a global recovery will also be restrained by private sector efforts to cut costs and by government attempts to stifle budget deficits that dampen investment, it added.
Bureau Report