(MENAFN - Kuwait News Agency (KUNA)) A UN report on Tuesday said the global economy is at "great risk" of falling into a renewed recession, with the exception of oil-exporting countries.
The report - "World Economic Situation and Prospects (WESP) 2013" - issued today, said growth of the world economy has weakened considerably during 2012 and is expected to remain subdued in the coming two years.
"contrasting trends are found in Western Asia," the report said, adding that "most oil-exporting countries have experienced robust growth supported by record-high oil revenues and government spending." However, it added, "social unrest and political instability, notably in Syria, continue to elevate the risk assessment for the entire region." On average, it noted, the Gross Domestic Product (GDP) growth in the region is expected to slow down to 3.3 percent in 2012 and 2013, from 6.7 percent in 2011.
Globally, the report said, the economy is expected to grow at 2.4 percent in 2013 and 3.2 percent in 2014, a significant downgrade from the UN's forecast of half a year ago.
"This pace of growth will be far from sufficient to overcome the continued jobs crisis that many countries are still facing. With existing policies and growth trends, it may take at least another five years for Europe and the US to make up for the job losses caused by the 2008-2009 great recession," the report estimated.
It noted that while several European economies and the Euro zone as a whole are already in recession, and euro zone unemployment increased further to a record high of almost 12 percent this year, the US economy slowed significantly during 2012 and growth is expected to remain meager at 1.7 percent in 2013.
It indicated that the economic woes in Europe, Japan and the US are spilling over to developing countries through weaker demands for their exports and heightened volatility in capital flows and commodity prices.
"The prospects for the next two years continue to be challenging, fraught with major uncertainties and risks slanted towards the downside," Rob Vos, the UN's team leader for the report warned. "A worsening of the euro area crisis, the 'fiscal cliff' in the US and a hard landing in China could cause a new global recession."