Download - 2012wesp slides en
![Page 1: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/1.jpg)
Faltering global Faltering global economic economic
growthgrowth
Rob VosRob VosUnited NationsUnited Nations
Mexico CityMexico City18 January, 201218 January, 2012
www.un.org/esa/policy
![Page 2: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/2.jpg)
2
Main messages1. The world economy is at a critical juncture
– Risk of double-dip in major developed economies – Growth in emerging economies is moderating
2. Downside risks and uncertainties– Contagion of sovereign debt crisis, combined with f ragility in
banking sector– Persistent high unemployment– Political tensions leading to policy paralysis
3. Policy challenges– No premature fiscal austerity, rather more short-te rm stimulus
is needed– … that is internationally coordinated – … and focused on job creation and investments toward s
medium term reforms– Bolder actions to deal with financial fragilities– More stable development financing aligned with refo rms of
financial system
![Page 3: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/3.jpg)
3
Global recovery is slowing
4.1 4.0
1.4
-2.3
4.0
2.82.6
3.2
-3
-2
-1
0
1
2
3
4
5
2006 2007 2008 2009 2010 2011 2012 2013
UN Baseline
![Page 4: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/4.jpg)
44
Protracted slow growth in major developed economies
-3.5
-4.3-3.6
3.0
4.0
1.92.2
1.7
-0.5
1.51.52.0
0.5
2.0 2.01.6
3.1
-6.3
2.92.6
-7
-5
-3
-1
2
4
6
USA Japan EU15 New EU
2009 2010 2011 2012 2013
![Page 5: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/5.jpg)
55
Growth is also moderating in developing countries
2.52.2
5.1
5.7
-1.0
-2.1
7.5
4.5
9.2
7.16.6
6.06.0
2.7
7.2
6.5 6.6
4.3
5.65.0
6.9 6.7
3.73.3
5.1
6.9 6.9
4.3 4.2
5.9
-3
-1
1
3
5
7
9
Developingcountries
Africa East Asia South Asia Western Asia Latin America
2009 2010 2011 2012 2013
![Page 6: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/6.jpg)
66
Despite a rebound, the recovery in transition economies remains fragile
0.5
4.5
1.7
4.3
-3.7
-6.9
2.3
4.03.2
4.2
-8
-6
-4
-2
0
2
4
6
South-eastern Europe CIS (and Georgia)
2009 2010 2011 2012 2013
![Page 7: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/7.jpg)
77
Growth is also moderating in developing countries
2.52.2
5.1
5.7
-1.0
-2.1
7.5
4.5
9.2
7.16.6
6.06.0
2.7
7.2
6.5 6.6
4.3
5.65.0
6.9 6.7
3.73.3
5.1
6.9 6.9
4.3 4.2
5.9
-3
-1
1
3
5
7
9
Developingcountries
Africa East Asia South Asia Western Asia Latin America
2009 2010 2011 2012 2013
![Page 8: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/8.jpg)
Recovery in Latin Americafollows a decelerating trend
-4
-2
0
2
4
6
8
10
LatinAmericaand C.
Argentina Brazil Mexico Venezuela
2012 b/
WESP Projection – solid colorsCEPAL Projection - shaded
2010 2011 a/
![Page 9: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/9.jpg)
Growth pattern acrosscountries in the region is uneven
![Page 10: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/10.jpg)
10
Less favourable external environment…
• World trade moderating notably • A dip in the rising trend of
commodity prices, and highly volatile
• Some capital inflows to emerging markets reversing and contagious rise in borrowing costs
![Page 11: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/11.jpg)
11
• Persistent high unemployment compounded by early withdrawal fiscal stimulus has increased risk of double-dip recession in developed economies
• Sovereign debt distress spreading to more countries, combined with fragile banks, turbulence in financial markets
• Global imbalances lingering but not urgent problem in itself for short run, but exchange rate volatility is!!
… and major downside risks and uncertainties
![Page 12: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/12.jpg)
12
4.1 4.0
1.4
0.5
2.2
-2.3
4.0
2.82.6
3.2
-3
-2
-1
0
1
2
3
4
5
2006 2007 2008 2009 2010 2011 2012 2013
Downside scenario
Risks for (near) double-dip global recession
![Page 13: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/13.jpg)
13
The downside scenario
GDP growth (%) Downside scenarioDeviation
from baseline scenario
2011 2012 2013 2012 2013World 2.8 0.5 2.2 -2.1 -1.0Developed economies 1.3 -0.9 1.1 -2.1 -1.0United States 1.7 -0.8 1.1 -2.3 -0.9Japan -0.5 0.5 1.2 -1.5 -0.8European Union 1.6 -1.6 1.0 -2.3 -0.6Economies in transition 4.1 -2.0 3.3 -5.9 -0.9Developing economies 6.0 3.8 4.5 -1.7 -1.4Africa 2.7 3.3 3.7 -1.7 -1.5East and South Asia 7.1 5.6 5.7 -1.2 -1.2Western Asia 6.6 1.1 2.5 -2.7 -1.8Latin Am. and Carribean 4.3 0.8 2.4 -2.5 -1.8LDCs 4.9 5.4 4.0 -0.6 -1.8
![Page 14: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/14.jpg)
Uncertainties and risks in Latin America1. Greatest risk: possible recession in Europe
and the United States with strong spillover to China
2. Continuing volatility with sharper falls of commodity prices
3. Volatility of capital flows and exchange rates4. High exposure of commercial banks in the
region (especially Spanish-owned) to sovereign debt problems in Europe
5. Reduced fiscal space limiting responsiveness to renewed global downturn
![Page 15: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/15.jpg)
15
1. No premature fiscal austerity, rather more short-term stimulus is needed
2. … that is internationally coordinated3. … and focused on job creation and
investments towards medium term reforms for sustainable development
4. Bolder actions to deal with financial fragilities
5. More stable development financingaligned with reforms of financial system
Policy challenges
![Page 16: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/16.jpg)
16
4.1 4.0
1.4
0.5
2.2
3.9 4.0
-2.3
4.0
2.82.6
3.2
-3
-2
-1
0
1
2
3
4
5
2006 2007 2008 2009 2010 2011 2012 2013
Policy coordination
More coordinated stimulus, not less, is needed to move out of jobs crisis
![Page 17: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/17.jpg)
Faltering global Faltering global economic economic
growthgrowth
United Nations,United Nations,17 January, 201217 January, 2012
www.un.org/esa/policy
![Page 18: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/18.jpg)
18
Hyperlinked slides
![Page 19: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/19.jpg)
19
Moderating growth of world trade
![Page 20: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/20.jpg)
20
Food and oil prices volatile…….but on the rise again
FIGURE I.7 OF WESP
![Page 21: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/21.jpg)
21
Volatile portfolio flows to emerging markets
Equity Funds, net flows to EMEs ( weekly flows in USD billions)
-8
-6
-4
-2
0
2
4
6
8
09/01
/1010
/13/20
1011
/24/20
1001
/05/11
2/16/2
011
3/30/2
011
05/11
/116/2
2/201
108
/03/11
Europe, ME, Africa
Latin America
Asia
Global
![Page 22: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/22.jpg)
22
Rising borrowing costs also for emerging market economies
GRAPH I.6 OF WESP
![Page 23: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/23.jpg)
23
Slow post-recession employment recovery
![Page 24: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/24.jpg)
24
Still spreading sovereign debt distress in Europe
GRAPH I.13B OF WESP
![Page 25: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/25.jpg)
25
Strong volatility among major currencies(NER against dollar)
Figure I.10 of WESP
![Page 26: 2012wesp slides en](https://reader034.vdocuments.mx/reader034/viewer/2022051512/544404c3b1af9fbc0e8b4731/html5/thumbnails/26.jpg)
26
Reversal of strong appreciations in EMEs
Figure I.11 of WESP