UNITED NATIONS PROJECTS STEADY ECONOMIC GROWTH IN 1997

14 January 1997

Press Release
DEV/2131

UNITED NATIONS PROJECTS STEADY ECONOMIC GROWTH IN 1997

19970114 NEW YORK, 13 January (DESIPA) -- According to United Nations estimates, the world economy is expected to grow by a sustainable 3 per cent in 1997. Growth in the developed countries will continue to be about 2.25 per cent in 1997, and there will be a modest acceleration in growth among the developing countries from 5.7 per cent in 1996 to 6 per cent this year. Those projections are contained in a United Nations publication, prepared by the Department for Economic and Social Information and Policy Analysis (DESIPA) on the State of the World Economy 1997, which was made available yesterday and will be considered by the 1997 organizational session of the Economic and Social Council, to be held at Headquarters from 3 to 7 February. The report is an update to the World Economic and Social Survey, which is published annually and released each June as a document of the high- level segment of the Council's substantive session. Other developments projected for the global economy in 1997 include the following: -- Growth is unusually widespread: The United Nations expects that 116 of the 137 countries that it monitors will increase output per head in 1997; those that will not achieve that are mostly the world's poorest countries, as well as a limited number of economies in transition. -- African gross domestic product (GDP) is forecast to grow by 4 per cent for the second straight year: That would mark the first time since 1979- 1980 that per capita output rose in Africa for two years in a row; but with the boom in commodity prices having ended in 1996 and a continued shortfall in development assistance, many of the lower-income countries face intensified risks of marginalization. -- GDP of the "economies in transition" is projected to grow slightly: That would happen for the first time since the 1989-1990 upheavals in the countries classified as having "economies in transition"; but in the Russian Federation the return to economic growth predicted by DESIPA and by many others for 1996 is not likely to occur until the closing months of 1997. -- The "soft landing" should continue in China: Policy-makers are expected to be able to maintain 1997 GDP growth at 10 per cent, as they did in 1996, and keep a lid on inflation, which fell from 17 per cent in 1995 to 9 per cent last year. In addition, while the volume of world trade growth slipped below 6 per cent in 1996, international financial flows were on track for a 25 per cent increase. Investor confidence has apparently overcome the tremors experienced in 1995; in Latin America, net capital inflows held steady at $50 billion in 1996, as increasing private investment flows in effect substituted for the exceptional multilateral rescue packages of 1995. For copies of the State of the World Economy 1997, contact the Department of Public Information (DPI) at Headquarters, tel. (212) 963-5851.

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