MPDD Seminar Series on
Launch of the Publication
"World Economic Situation and Prospects 2012"
Dr. Oliver Paddison
Economic Affairs Officer,
Macroeconomic Policy and Development Division, UNESCAP
Dr. Pawin Siriprapanukul
Faculty of Economics, Thammasat University
Dr. Isara Ordeedolchest
Senior Vice President,
KT Zmico Securities Company Limited
Thursday, 19 January 2012
Theatre, Ground Floor,
Global economic growth started to decelerate on a broad front in mid-2011 and this slow growth is expected to continue into 2012 and 2013. The United Nations estimates growth of world gross product (WGP) at 2.8 per cent in 2011, and its baseline forecast projects growth of 2.6 per cent for 2012 and 3.2 per cent for 2013, which remains below the pre-crisis pace of global growth.
The coordinated policy resolve during the early stage of the crisis which helped stabilize financial markets and jump-start a recovery is fading. Most developed country governments have indiscriminately switched from fiscal stimulus to premature austerity measures. This has further weakened global aggregate demand—already nurtured by persistent high unemployment. Additionally, the failure of policymakers, especially those in Europe and the United States, to address institutional and regulatory deficiencies to prevent sovereign debt distress and financial sector fragility from escalating adds to existing risks for the global economy and is also exacerbating volatility in international financial and commodity markets and slowing growth in developing countries. All of these weaknesses are present and reinforce each other, but a further worsening of one of them could set off a vicious circle leading to severe financial turmoil and a renewed global recession for 2012-2013.
Against this background, several policy directions which could avoid a double-dip recession are discussed, including the optimal design of fiscal policies to stimulate more direct job creation and investment in infrastructure, energy efficiency and sustainable energy supply, and food security; stronger financial safety nets; better coordination between fiscal and monetary policies; as well as the provision of sufficient support to developing countries in addressing the fallout from the crisis and the coordination of policy measures at the international level.
World Economic Situation and Prospects (WESP) is a joint product of the Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five United Nations regional commissions. It provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities during the year.