UN: Weak eurozone, Ukraine weighing on global growth

GMT 22:13 2014 Wednesday ,10 December

Arab Today, arab today UN: Weak eurozone, Ukraine weighing on global growth

Construction workers at the site of the European Central Bank
London - AFP

The global economy will improve over the next two years but eurozone weakness combined with the Ebola crisis and the Ukraine conflict are weighing on growth, a UN report said Wednesday.
The World Economic Situation and Prospects 2015 report put global economic growth at 3.1 percent in 2015 and 3.3 percent in 2016, up from 2.6 percent in 2014.
"Many risks and uncertainties could dash efforts to get the global economy on track and moving forward," said Pingfan Hong, director at the UN economic and social affairs department.
The report said western Europe was headed for "only a slight improvement in growth", held back by ongoing sluggishness in the eurozone where some members teetered on the brink of recession this year.
East Asia will remain the fastest-growing region, expanding 6.1 percent in 2015 and 6.0 percent in 2016.
Africa looks set to continue to steam ahead, posting growth at 4.6 percent in 2015 and 4.9 percent in 2016. But the region remains vulnerable to a worsening of the Ebola epidemic, the report said.
The crisis in Ukraine, where pro-Russian fighters are battling government forces, is having "major regional macroeconomic repercussions", mostly due to the impact of sanctions targeting Russia, the report said.
The US economy is expected to improve over the next two years, expanding by 2.8 and 3.1 percent, after maintaining an annual growth rate above 2 percent in 2014.
The UN report said the US Federal Reserve's plans to normalize interest rates "holds significant risks and uncertainties for the global economic outlook, depending on the timing and strategy of the monetary tightening, as well as the response by financial markets."
Japan is headed for a slowdown, mainly attributed to a drop in private consumption due to higher taxes.
Economic growth in Latin America and the Caribbean is projected to moderately improve, according to the UN report.
It also cites volatile oil prices as having significant impact on oil exporting and importing countries.

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