Talk Radio News Service: News, Politics, Media

The world economy is slowly recovering from the global financial crisis but growth will remain fragile, says the UN Department of Economic and Social Affairs (DESA) in its new report on the economic prospects for 2010-2011. The report predicts a 2.9% growth in the US for 2010, and a drop back to 2.5% in 2011. “The good news is that the crisis in the world economy has abated and we see a continued recovery," says Rob Vos, Director of Development Policy Analysis of DESA. "but at the same time it is weak and uneven."

While the market for primary commodities has bounced back strongly, favoring “Developed” Asia (Japan, Korea, etc), other regions such as Latin America, Africa and Western Asia have seen no such growth.

With credit supplies and private consumption remaining low, Vos says that the current rebound in the world economy is heavily dependent on the fiscal and monetary stimulus plans. As most of these measures will be phased out by 2011, private sector growth in the coming year will have an important impact on the predicted rates.

Although stimulus packages played a key part helping the global economy bounce back, Vos believes that these measures, along with an overall decrease in tax revenues, are in part responsible for the current public debt crisis and widening budget deficits that are likely to be obstacles to substantial economic growth in the coming years. Vos also highlighted high unemployment rates and exchange rate volatility as continuing “crises" in part responsible the world financial markets mediocre growth prospects.