WORLD OUTPUT CRUISING AT 3 PER CENT GROWTH IN 1998 DESPITE EMERGING MARKET SLOWDOWN, UN REPORT STATES
Press Release
DEV/2179
WORLD OUTPUT CRUISING AT 3 PER CENT GROWTH IN 1998 DESPITE EMERGING MARKET SLOWDOWN, UN REPORT STATES
19971216 GENEVA, 15 December (UN Information Service) -- "Austerity is not the cure for all economic problems", says the United Nations Department of Economic and Social Affairs in its year-end review and outlook of the world economy. Yet national austerity is what the markets expect of countries that were hit by loss of investor confidence, net capital outflows, exchange-rate depreciation and failed financial institutions. In the middle of a crisis, affected countries have little choice. Nevertheless, recent events warrant rethinking systemic questions about international finance, the United Nations report states.Also according to the report, State of the World Economy at the Start of 1998:
-- Output per person in 1998 is expected to increase in 131 of the 143 countries that the United Nations monitors regularly, compared to an increase in 120 countries in 1997 and 67 in 1993.
-- African gross domestic product (GDP) rose 3 per cent in 1997, less than the 4.4 per cent in 1996, and 4 per cent growth is forecast for 1998. Even higher growth is needed to alleviate poverty and unemployment. Fourteen African countries met an informal benchmark of 3 per cent growth in output per person in 1997.
-- Growth in Latin America and the Caribbean is forecast to slow to 3.5 per cent, as policies changed to head off loss of investor confidence. Brazil is to grow only 1 per cent, but Mexico is to grow 5 per cent.
-- Economies in transition are estimated to have grown as a whole in 1997 for the first time since the collapse of central planning regimes, with the first slight growth in the Russian Federation. More than 3 per cent growth is forecast for 1998.
-- East Asian GDP growth, owing to the crisis, is expected to fall to 4 per cent -- Hong Kong (China), 4 per cent; Indonesia, 3.5 per cent; Republic of Korea, 3 per cent; Taiwan, Province of China, 5.5 per cent; Thailand, 2 per cent -- but South Asia is forecast to raise its growth to 6 per cent (India to 6.5 per cent), and China to 10 per cent.
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-- Economic weakness in Japan is seen as continuing in 1998, a casualty of domestic financial troubles and trade slowdown in Asian markets (1.25 per cent growth forecast). However, the United Nations cautions not to be oversensitive to the size of the budget deficit in the short run.
-- The growth of world trade recovered from the 1996 slowdown, with global volume growth estimated at 9.4 per cent in 1997, and 7 per cent in 1998, reflecting the surge in United States imports in 1997 that is not sustained in 1998, and slower import growth in emerging market countries.
This United Nations report is an update of the annual World Economic and Social Survey. The Survey is released each June as a document for the high-level segment of the United Nations Economic and Social Council.
The upcoming World Economic and Social Survey 1998 will be available in June 1998 for $55.00 (Sales No. E.98.II.C.1) from United Nations Publications, Two UN Plaza, Room DC2-853, New York, NY 10017, (tel: 212/253-9646 or 212/963-8302; fax: 212-963-3489; e-mail: publications@un.org). It is also available from Palais des Nations, CH-1211 Geneva 10, Switzerland (tel: 41-22-917-2614; fax: 41-22-917-0027; e-mail: unpubli@unog.ch).
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