(MENAFN- Qatar News Agency) The global economy is projected to grow in 2014, but risks and uncertainties in major world economies, including the political wrangling in the United States on the debt ceiling and budget, could derail the growth, a UN report said Wednesday.
The overall global economy is forecast to increase at a pace of 3 per cent in 2014 and 3.3 per cent in 2015, an increase of around 1 percentage point over 2.1 growth projected in 2013
The report found that the factors behind the positive forecast were moderate growth projected in the US and the end of protracted recession in the Eurozone
Efforts by China and India, the world's two large emerging economies, to backstop the deceleration and veer moderately upwards also contributed to the expected increase in global growth, dpa reported
Despite fiscal tightening and a series of political gridlocks over budgetary issues in Washington that weighed heavily on growth this year, the report found that the US labour market and housing sector continued to recover
US gross domestic product (GDP) is expected to increase 2.5 per cent in 2014
Conversely, fiscal austerity is expected to continue and the unemployment rate is expected to remain high in Western Europe, despite its emergence from recession in 2013, it said
Growth in Japan, one of world's leading economies, has seen a boost this year, but structural reforms and an anticipated increase in its consumption tax rate is likely to curb further growth, the report found
GDP both in Western Europe and Japan is forecast to grow by 1.5 per cent in 2014, while China is expected to maintain its growth at rate of about 7.5 per cent next year and beyond
Growth in both India and Russia, which weakened in 2013, was forecast to improve to above 5 per cent and 2.9 per cent in 2014, respectively
The report, compiled by several UN entities and commissions, including the UN Department of Economic and Social Affairs, warned that international capital flows to emerging economies were expected to become more volatile
"Our forecast is made in the context of many uncertainties and risks coming from possible policy missteps as well as non-economic factors that could stymie growth," Shamshad Akhtar, UN assistant secretary general for economic development, told reporters
The report also warned that the emerging economies would face more external shocks as the US Federal Reserve is expected to gradually unwind its quantitative easing programme
Other risks that could derail the growth in the next years included the fragility in the banking system, the real economy in euro area and the continued political wrangling in the US on the debt ceiling and the budget.
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