GENEVA — World output is forecast to slow down and see growth of just 2.6 percent in 2012, down from last year’s 2.8 percent gain, due to anemic activity in the U.S. and Europe and moderation of growth in dynamic emerging economies, a U.N. report published Tuesday predicts.
Growth in the volume of world trade is also projected to slow this year to 4.4 percent, from 6.6 percent in 2011, due to weaker expansion, especially in rich nations, the report said, with developing nations’ exports expanding by 6.4, down from 7 percent in 2011, and rich developed nations’ by 3.3 percent, down from 6.1 percent last year.
Despite the weakened outlook, major textiles and apparel exporting nations — such as China, India, Pakistan, Bangladesh, Vietnam and Turkey — are forecast to register stronger-than-average growth and trade performances as compared with that of rich nations.
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The study, “World Economic Situation and Prospects 2012,” compiled by seven U.N. economic agencies, concludes, “The world economy is teetering on the brink of another major downturn.”
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“Failure by policy makers, especially in Europe and the U.S., to address the jobs crisis and prevent sovereign debt distress and financial sector fragility from escalating would send the global economy into another recession,” it warns.
The risk of a “double-dip” recession in major developed economies “is substantially high,” Alfredo Calcagno, head of macroeconomics and development policies, at the U.N. Conference on Trade and Development, told reporters.
In such a downside scenario, the U.S. economy would contract by 0.9 percent, and the Euro area by 2 percent.
Under the baseline outlook, U.N. economists estimate growth in the U.S. will increase this year by 1.5 percent, and the Euro area to average only a 0.4 percent increase.
But the report estimates output in China, despite the recent moderation, to increase by 8.7 percent in the coming year, down from 9.3 percent estimated for 2011. (China’s national bureau of statistics said Tuesday China’s fourth-quarter GDP slowed to 8.9 percent.)
Similarly, the U.N. forecasts India to grow by 7.7 percent, Pakistan by 4.1 percent, Turkey by 3.2 percent, Bangladesh by 6.8 percent and Vietnam by 6 percent.
The U.N. report also indicates that high consumer price inflation will remain a problem for many of the emerging economies in Asia.