The United Nations, UN, is forecasting that the global economy will expand by more than 3 percent this year and next year, but it warns that increasing risks could trigger “a shock to investment and trade” and a sharp drop to 1.8 percent growth in 2019.
The U.N.’s mid-year report on the World Economic Situation and Prospects launched Thursday says growth in the world economy is surpassing expectations, reflecting “strong growth in developed countries and broadly favourable investment conditions.”
The new figures show the rate of expected growth for this year revised upwards by 0.2 percent from earlier predictions made in late 2017, and up 0.1 percent for 2019.
“World trade growth has also accelerated, reflecting a widespread increase in global demand,” the report said.
However, the report said, “downside risks” have increased including “a rise in the probability of trade conflicts between major economies.”
Elliott Harris, the UN Assistant Secretary-General for Economic Development, said that multilateralism, which is facing mounting criticism worldwide, “is not an option, it’s a necessity”.
In remarks apparently aimed at US President Donald Trump, the report warned that “a shift away from unambiguous support for the multilateral trading system, marked by further trade barriers and retaliatory measures, threatens the strength and sustainability of global growth, with potentially large repercussions, especially for developing economies.”
“World trade growth has also accelerated, reflecting a widespread increase in global demand,” according to the report, which also highlighted the dangers of “high inequality and the renewed rise in carbon emissions.”