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Grim UN Report Downgrades Economic Forecast for 2012

Jomo Kwame Sundaram from the UN's Department of Economic and Social Affairs
NEW YORK -- The United Nations Department of Economic and Social Affairs (DESA) says the world is facing a heightened risk of another global economic downturn.

In a new report, DESA predicts only 2.6 percent growth for 2012 -- down from 4 percent in 2010.

It also says the predicted figure of growth is contingent upon the containment of the European debt crisis, as well as a "halt to further moves toward stringent fiscal austerity in the developed countries."

Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development in DESA, intimated that their findings showed that the global economy was at risk of entering a second recession.

"We have a situation where we may well be at risk of a double-dip, in any case it is very likely that there will be a further slow down," he said. "We know that this has been the case in the developed world, but it is also likely to affect much of the developing world."

DESA says developing countries and economies in transition -- which are expected to grow on average by 5.4 percent in 2012 -- will drive the majority of growth. Developed economies are expected to grow by only 1.3 percent on average.

The Commonwealth of Independent States and Georgia are expected to grow by 4 percent, down from their forecasted 4.3 percent growth in 2011.

Russia is expected to grow by 3.9 percent, a slight decrease from 2011.

The United States' economy is expected to grow only 1.5 percent in 2012, while the European Union's economy is expected to grow only 0.7 percent.
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