A three per cent upturn in the global economy has paved the way to readjust policy towards longer-term issues, such as addressing climate change, tackling existing inequalities and removing institutional obstacles to development, according to a new United Nations report on global economic prospects.
Launched in New York on Monday, among other things, the World Economic Situation and Prospects (WESP ) 2018 offers policy imperatives that include tackling inequality and delinking economic growth from environmental degradation.
“The World Economic Situation and Prospects 2018 demonstrates that current macroeconomic conditions offer policy-makers greater scope to address some of the deep-rooted issues that continue to hamper progress towards the Sustainable Development Goals,” stated UN Secretary-General António Guterres in the Foreword.
According to the report, 2017 global economic growth had reached three percent – its highest since 2011 – as crisis-related fragilities and the adverse effects of other recent shocks have subsided.
The improvement is widespread. Roughly two-thirds of the world’s countries have experienced stronger growth in 2017 than in the previous year, and movement is expected to remain steady at three percent in 2018 and 2019.
Noting that the recent pickup in global growth stems predominantly from firmer growth in several developed economies, the report states that East and South Asia remain the world most dynamic regions.
Despite the improved short-term outlook, the global economy continues to face longer-term challenges, including trade policy changes and rising geopolitical tensions.
The report highlighted that the improved macroeconomic situation has opened a door for reorienting policies, including to increase economic diversification; reduce inequality; support long-term investment; and tackle institutional deficiencies. It noted that addressing these challenges can generate stronger investment and productivity, higher job creation and more sustainable medium-term economic growth.
However, the recent economic improvements have been unevenly distributed across countries and regions.
Through 2019, negligible per capita income growth is expected in several parts of Africa, Western Asia and Latin America and the Caribbean – underscoring the urgent need to foster an environment that will both accelerate medium-term growth prospects and tackle poverty through policies that address income and opportunity inequalities.
The report also found that – hindered by institutional deficiencies, inadequate basic infrastructure and greater exposure levels to natural disasters, along with challenges to security and political instability – very few least developed countries (LDCs ) are expected to reach the Sustainable Development Goal target for GDP growth of “at least 7 percent” (SDG 8.1) in the near term.