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UN Sees Slower Economic Growth After Terrorist Attacks in US
The terrorist attacks on the United States will have far-reaching economic effects, further slowing a world economy already growing at its lowest rate in a decade, the United Nations said in a report released Wednesday.
The earlier hope for a global recovery in the second half of 2001 has been replaced by the expectation of a "tepid recovery in mid-2002, the report said.
The growth of world gross product is expected to be only 1.4 percent for 2001 and 2 percent next year, it said.
Though the full economic impact of the attacks remains unknown, the report analyzed the possible consequences by examining a range of factors, putting the cost of the physical destruction in the U. S. at 40 billion U.S. dollars, without counting the human losses.
The U.N. experts anticipated a worse than previously expected downturn in the U.S., with the attacks expected to cause "an absolute decline in Gross Domestic Product (GDP) in the third and fourth quarters" of 2001.
More than the initial destruction and subsequent disruption is the erosion of confidence caused by the attacks, according to the report.
"The direct economic consequences of eroding confidence will be heightened risk aversion by business investors and a withholding of household spending by consumers," it said.
The nervousness and apprehension of investors and consumers may lead to depressed demand in the short-to-medium run, and reduced expansion of supply capacity and lower potential long-term growth, the experts believed.
The September 11 attacks toppled the twin towers of the World Trade Center in New York, and damaged the Pentagon building in Washington. The four hijacked passenger planes involved in the attacks were demolished with all aboard killed. The number of people missing in the trade center stood at more than 5,000.
Since October 7 the U.S. has been on military strikes on Afghanistan's Taliban targets and Al-Qaeda organization led by Osama bin laden who has been accused by Washington of masterminding the terrorist attacks.
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