[United Nations, Department of Economic and Social Affairs] The world economy continues to grow at a moderate and uneven pace, encumbered by both the legacies of the global financial crisis and a number of new challenges. The global growth is projected to strengthen in 2015-2016, to a pace of 3.1 per cent and 3.4 per cent, respectively, up from the estimated rate of 2.6 per cent in 2014. This forecast is, however, subject to significant uncertainties and risks.
Six years through the aftermath of the global financial crisis, the majority of both developed and developing countries are seeing their GDP growth on a markedly lower path than they were prior to the crisis. While developed economies have indeed in 2014 all registered positive growth for the first time since 2011, growth in the euro area remains fragile and the
momentum in Japan is also tapering off. Among developing countries and economies in transition, it is worrisome to see a sharp deceleration in a number of large emerging economies, particularly in Latin America and the Commonwealth of Independent States. A number of these economies continue to face various country-specific challenges, including
structural imbalances, infrastructural bottlenecks, increased financial risks, incoherent macroeconomic management as well as geopolitical and political tensions.
Insufficient jobs remain a key policy concern worldwide, as the unemployment rates, particularly for youth, are still elevated in a large number of both developed and developing countries. The global inflation outlook remains benign, although a dozen of developing countries and economies in transition are challenged by high inflation while some European economies may face the risk of deflation.
International trade flows continue to expand at a lacklustre rate, while progress in the WTO multilateral trade negotiations remains sluggish, preventing any new impetus to boost the global dynamism in trade and output. At the same time, the international prices of primary commodities are on a downward trend. International capital flows to emerging economies are also moderating.
Major uncertainties and risks threatening the world economic outlook include the risks associated with the QE exit and the normalization of interest rates by the United States Federal Reserve, along with the divergence in monetary policies among the major developed countries; remaining fragility in both the financial sector and the real economy in the euro
area; vulnerability in emerging economies to both the external shocks and domestic structural bottlenecks; a possible escalation in geopolitical tensions; and the risk of a failure in containing Ebola.
Macroeconomic policies worldwide are challenged to place the global economy on a more robust and balanced growth trajectory. In developed countries, the almost exclusive reliance on monetary policy is unlikely to achieve the multi-dimensional goals of robust growth, full employment, price stability and financial stability. In many developing countries, the policy space, as well as policy instruments, may not be sufficient to tackle the external vulnerabilities and domestic structural challenges. Therefore, coordination is needed within both developed and developing countries among different policies and structural reform measures.
At the international level, policy coordination and cooperation are also imperative in many areas, including aligning macroeconomic policies worldwide towards the focus on supporting growth and jobs; mitigating adverse international policy spill-overs; furthering financial regulatory reforms; forging progress towards the completion in the WTO Doha Round; enhancing cross-border tax cooperation; providing sufficient resources to the LDCs; and ensuring a smooth transition in global development cooperation from the Millennium Development Goals to the Sustainable Development Goals as the post-2015 development policy framework.
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