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World Economy Expected to Grow, but Potential Threats Exist: UN
Global economic growth is expected to moderate from 4 percent in 2000 to 3.5 percent in 2001, United Nations agencies said Thursday.
The outlook for developed countries is an easing of the high growth rate in 2000, with prospects "less sanguine" in the United States, expansion in Europe slowing and expectations for Japan continuing to be modest.
The forecast report was released in New York by the U.N. Department of Economic and Social Affairs and the U.N. Conference on Trade and Development, which see the average growth rate of developed countries to slow down from 3.5 percent in 2000 to 3 percent in 2001.
According to the report, developing countries will "play an important role in underpinning global growth" in 2001, as they did in the early 1990s, barring unforeseen shocks.
The average growth rate for developing countries is expected to stand almost steady at 5.5 percent in 2001, compared with 5.6 percent in 2000.
Growth in East Asia may decline in 2001 as the high rate achieved by a number of countries in the group returns to more sustainable levels, while in other developing regions, growth could be similar or better than the improved level in 2000, U.N. economists believed.
Economies in transition are expected to remain strong and to contribute to the resilience of the world economy, the report said.
The U.N. agencies warned that there are a number of potential threats to the favorable outlook, including fragile current- account imbalances, higher oil prices, instabilities in financial and foreign exchange markets and excessively tight monetary policies.
"Any of these could lead to a more abrupt decline in economic activity, particularly in the main countries," the report said.
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